On the revision, Barclays cites the BOE’s more cautious tone that emphasised uncertainty and gradual policy moves.

„The main messaging from the press conference was repeated emphasis on the extent of uncertainty at the current juncture: uncertainty around the impact of the fiscal package; uncertainty on the current state of the labour market.“

Adding that the emphasis on „gradualism“ means the central bank is to keep the bank rate unchanged in December. That as the uncertainty surrounding all of the issues above are not likely to go away any time soon.

Looking to next year though, Barclays sees the BOE cutting by 25 bps in February, May, June, August, and September, taking the terminal rate to 3.50%.

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

The post-election trade in the dollar hasn’t been too straightforward over the last two days to say the least. The greenback saw gains abate yesterday but is looking to recover back some ground again in trading today. But even then, it isn’t that convincing with the dollar lagging against the yen and franc on the day.

The former owes to lower Treasury yields, with 10-year yields dipping back by another 4 bps to 4.30% currently. It’s still at a high point compared to where we were before October but on the week itself, yields are pretty much flat now. So, that is also one reason why the dollar has struggled to follow through with gains.

But as a whole today, dollar bulls are looking to test the waters again. EUR/USD is down 0.3% to 1.0770 though large option expiries are also in play, potentially boxing in price action for now. Meanwhile, GBP/USD is down 0.3% to 1.2950 and USD/CAD up 0.3% to 1.3895 currently.

The laggards are the antipodeans and that owes to softer sentiment surrounding China as well. AUD/USD is down 0.6% to 0.6635 with sellers looking to make a play again on the technical side of things:

The rebound yesterday fell just short of contesting the 100-day moving average (red line). And sellers are now driving price back lower to test the 200-day moving average (blue line) at 0.6628. Break back below that and the bias in the pair will return to being more bearish once again.

As much as Trump’s election win has reignited the dollar flames again, a lot will also depend on bond market developments.

So far, traders are not really extending the higher jump in yields since October. And that is keeping the dollar at bay from rampaging across the board. But perhaps there is a case that we might be settling into a new regime of higher US yields from here.

And if so, that will allow the dollar to flex its muscles later on once traders get settled in. That especially if Trump’s policies are going to lead to higher domestic inflation while impacting growth outlooks in other countries.

It’s still only two days into the post-election window. There’s going to be much more for traders to digest and take into consideration in the months ahead. So, I guess it’s also a good thing that markets are not getting too carried away just yet.

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

Fundamental
Overview

The US Dollar is now lower
across the board as the market erased most of the greenback’s gains following
Trump’s victory. This has been a puzzling reaction as Trump’s policies are
likely to spur growth and potentially end the Fed’s easing cycle earlier than
expected.

We can argue that the
market was already positioned for a Trump’s victory as we saw the greenback
rallying for a couple of weeks leading into the US election. So, this might
just be a “sell the fact” reaction and the market might now need more to keep
bidding the USD.

Another possible
explanation is that the market is more focused on global growth now and that’s
generally bearish for the greenback. We saw something similar in 2016 when the
USD rallied strongly once Trump got elected but after a couple of months, it went
into a 2-year long downtrend.

The Fed for now remains
neutral and on track to keep cutting rates. Yesterday, they cut by 25 bps as expected and given the overall neutral
message, the market expects another 25 bps cut in December. Strong data from
now until the December meeting though could change their plans for 2025.

We have the US CPI report
next week and that’s going to be a test. If the US Dollar sells off on hot
data, then the market might be indeed focusing on global growth rather than the
potential for an earlier pause in the Fed’s easing cycle.

AUDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that AUDUSD spiked to a new low as Trump got elected President but
eventually reversed course and rallied into a new high. We have a key level
around 0.6622. The buyers will likely step in there with a defined risk below
the level to position for a rally into new highs. The sellers, on the other
hand, will want to see the price breaking lower to pile in for a drop into the
0.64 handle.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price is reacting to the key level as we got the first rejection.
There’s not much more we can add here as the buyers will look for a bounce,
while the sellers will look for a break lower.

AUDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that at the moment we have a downward trend on this timeframe. The buyers
will want to see the price breaking above the most recent lower high around the
0.6660 level to increase the bullish bets into new highs. The red lines define
the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the University of Michigan Consumer Sentiment
report.

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

Fundamental
Overview

The US Dollar is now lower
across the board as the market erased most of the greenback’s gains following
Trump’s victory. This has been a puzzling reaction as Trump’s policies are
likely to spur growth and potentially end the Fed’s easing cycle earlier than
expected.

We can argue that the
market was already positioned for a Trump’s victory as we saw the greenback
rallying for a couple of weeks leading into the US election. So, this might
just be a “sell the fact” reaction and the market might now need more to keep
bidding the USD.

Another possible
explanation is that the market is more focused on global growth now and that’s
generally bearish for the greenback. We saw something similar in 2016 when the
USD rallied strongly once Trump got elected but after a couple of months, it went
into a 2-year long downtrend.

The Fed for now remains
neutral and on track to keep cutting rates. Yesterday, they cut by 25 bps as expected and given the overall neutral
message, the market expects another 25 bps cut in December. Strong data from
now until the December meeting though could change their plans for 2025.

We have the US CPI report
next week and that’s going to be a test. If the US Dollar sells off on hot
data, then the market might be indeed focusing on global growth rather than the
potential for an earlier pause in the Fed’s easing cycle.

USDCHF
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCHF couldn’t extend the rally above the key resistance zone around the 0.8730 level. We now
have an upward trendline
defining the bullish momentum. We can expect the buyers to lean on it to
position for a rally into new highs, while the sellers will look for a break lower
to increase the bearish bets into new lows.

USDCHF Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor support around the 0.87 handle. The buyers will likely
step in there with a defined risk below it to target new highs, while the
sellers will look for a break lower to increase the bearish bets into the major
trendline.

USDCHF Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much to add here as the buyers will look for a bounce around the 0.87
handle, while the sellers will look for a break. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the University of Michigan Consumer Sentiment
report.

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

Fundamental
Overview

The Nasdaq tested the
all-time high following Trump’s victory and the red sweep as the market started
to look forward to bullish drivers like tax cuts and deregulation.

One potential bearish
reason people are looking at is rising Treasury yields. That’s generally
bearish when the Fed is tightening though as the market looks forward to an
economic slowdown.

Right now, the Fed’s
reaction function is that a strong economy would warrant an earlier pause in
the easing cycle and not a tightening. That should still be supportive for the
stock market.

If the Fed’s reaction
function changes to a potential tightening, then that will likely see the stock
market correcting lower.

Nasdaq
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Nasdaq bounced on the trendline and extended the rally into the
all-time high following Trump’s victory. The sellers will likely step in around
these levels with a defined risk above the all-time high to position for a drop
back into the trendline. The buyers, on the other hand, will want to see the
price breaking higher to increase the bullish bets into new highs.

Nasdaq Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the incredible rally since the bounce on the trendline. The
price is now testing the all-time high with the Fed’s decision looming. The
momentum is strong but if we get a bearish reaction to the Fed’s decision in
the afternoon, the dip-buyers will likely step in around the 20700 level. The
sellers, on the other hand, will look for a break lower to target the
trendline.

Nasdaq Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the strong bullish momentum on this timeframe is fading a bit as the price
broke below the minor upward trendline. This price action might signal a
pullback into the 20700 level. The red lines define the average daily range for today.

Upcoming Catalysts

Today we have the US Jobless Claims and the FOMC Policy Decision. Tomorrow,
we conclude the week with the University of Michigan Consumer Sentiment report.

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

Fundamental
Overview

The S&P 500 soared into
a new all-time high following Trump’s victory and the red sweep as the market
started to look forward to bullish drivers like tax cuts and deregulation.

One potential bearish
reason people are looking at is rising Treasury yields. That’s generally bearish
when the Fed is tightening though as the market looks forward to an economic
slowdown.

Right now, the Fed’s
reaction function is that a strong economy would warrant an earlier pause in
the easing cycle and not a tightening. That should still be supportive for the
stock market.

If the Fed’s reaction function
changes to a potential tightening, then that will likely see the stock market
correcting lower.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the S&P 500 bounced from the key support
zone around the 5720 level and extended the rally into a new all-time high
following Trump’s victory. The only technical level of note now is the resistance
turned support around the 5918 level.

If we get a pullback, we
can expect the buyers to step in there to position for a rally into new highs,
while the sellers will look for a break lower to start targeting the 5830 level
next.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the support around the 5918 level on this timeframe where we
did get a bounce yesterday already. The momentum is strong but if we get a
bearish reaction to the Fed’s decision in the afternoon, the dip-buyers will
likely step in around that level to target new highs. The sellers, on the other
hand, will look for a break lower to target the 5830 level.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much we can add here although the price action here looks like the momentum
has slowed and we might get the pullback. The red lines define the average daily range for today

Upcoming
Catalysts

Today we have the US Jobless Claims and the FOMC Policy Decision. Tomorrow,
we conclude the week with the University of Michigan Consumer Sentiment report.

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

• Prior +0.2%; revised to +1.1%

Euro area retail sales grew by more than expected and that is on top of a sharp revision higher to the August figure. Looking at the details, food sales were down 0.4% but non-food store retail sales were up 1.1% with automotive fuel store sales up 0.2% on the month. That being said, all this is Q3 data and feeds into the overall picture here already.

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

Fundamental
Overview

The US Dollar rallied
across the board yesterday as Trump got elected President of the US. The
Republicans won also the Senate and the House giving us a red sweep and therefore
high chances of tax cuts.

This should be the most
bullish scenario for the greenback as it should lead to higher growth and less
rate cuts expectations.

In fact, given the red
sweep and the strong US data we keep on getting, the Fed might start to change
its stance, and we could see a much earlier than expected pause in 2025.

On the GBP side, we have
the BoE rate decision today where the central bank is expected to cut by 25 bps
with potentially 1 member voting for a hold and 2 members voting for a 50 bps
cut.

Looking ahead, the market
priced out the high chances of a back-to-back cut in December but if the data
were to worsen further, we might see the market pricing that back in.

GBPUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that GBPUSD bounced from the recent low around the 1.2843 level. This is
where the buyers are stepping in to position for a pullback into the 1.30
handle. The sellers, on the other hand, will want to see the price breaking lower
to increase the bearish bets into the 1.27 handle next.

GBPUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the bounce from the recent low which is now a strong support
zone. There’s not much we can add here as we could get stuck in a range between
the 1.2843 support and the 1.3044 resistance. A breakout on either side should
lead to a more sustained trend.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor counter-trendline
defining the current pullback on this timeframe. The buyers will likely keep on
leaning on the trendline to position for new highs, while the sellers will look
for a break lower to position for the break of the support zone. The red lines
define the average daily range for today.

Upcoming
Catalysts

Today we have the BoE Policy Decision, the US Jobless Claims and the FOMC
Policy Decision. Tomorrow, we conclude the week with the University of Michigan
Consumer Sentiment report.

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

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

That is the highest level in four months and carries on from the surging run since October. And this is in part fueling the dollar gains on the day with EUR/USD now down nearly 2% at 1.0715 and USD/JPY up 1.7% to 154.15 currently.

Trump’s domestic policies are largely aimed at boosting growth, spending and with regards to foreign trade, tariffs and trade conflicts are going to stir up some added drama. All of which markets are anticipating to feed into higher inflationary pressures in due time.

That is partly why there’s so much angst in bonds now but also if Trump digs into the fiscal checkbook i.e. more borrowing, it does put upward pressure on yields as well.

It’s still too early to judge the exact nature and magnitude of how Trump’s presidency will impact the above issues. But for traders, the considerations are definitely there already as evident in the bond market reaction we’re seeing.

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