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.

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.

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.

• Inflation expected to rise again in the latter part of this year – ECB accounts
• China imposes sanctions on three US military firms on Taiwan arms sales
• New Whales Drop $100B on BTC, is It Time for New Rally?
• BOJ’s Himino: We have enough time to carefully monitor financial markets
• Weekly update on interest rate expectations
• BOJ’s Himino: We will hike rates if outlook for economy, prices in July report is achieved
• European equities in a mixed mood to start the day
• What is the distribution of forecasts for the US CPI?
• EUR/USD sits on the edge as sellers eye further downside
• What are the main events for today?
• Eurostoxx futures -0.2% in early European trading
• Germany August retail sales +1.6% vs +0.1% m/m expected
• FX option expiries for 10 October 10am New York cut
• Japan households still largely expecting prices to be higher a year from now – BOJ survey
• US inflation the main event in the day ahead

The European session was empty in terms of data releases. Everyone is waiting for the US CPI release due in an hour. In the markets, we’ve been seeing some hawkish moves into the CPI with Treasury yields and the USD adding to the prior gains.

There’s clearly some fear that we could get an upside surprise, therefore some hedging into such a key report ahead of the Fed decision in November is what you would expect.

Heading into the release, the market is pricing 43 bps of easing by year end with 20% probability of a pause in November. For 2025 the market sees an additional 90 bps of easing by year end. These expectations are a little more hawkish compared to the latest Fed’s projections.

Below you can find the range of estimates and the distribution of forecasts for the US CPI report:

• Range of estimates
• Distribution of forecasts

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

• But inflation is then expected to decline towards target over the second half of next year
• Too early to declare victory against inflation
• Core inflation and services inflation might be stickier and not decline as much as expected
• But disinflationary process remains on track
• The risk of delays in reaching the target warrants some caution against dialing back policy restriction prematurely
• Need to carefully monitor whether inflation would settle sustainably at target in a timely manner
• Full accounts

There’s nothing in there that is out of the ordinary. The thing is that since last month’s meeting, recent data has pushed markets to expect another rate cut by the ECB for next week. That is the bigger development in play currently. A 25 bps rate cut is now ~94% priced in based on the rates market.

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

The USD rallied across the
board last Friday following the hot US NFP report. The market priced out all the
aggressive rate cuts expectations and it’s now finally in line with the Fed’s
projections.

This week, the greenback
extended the gains as the market started to price in some chances of a pause in
November. The focus remains on the economic data.

Today we get the US CPI
report. We will likely need a hot report to see some more upside in the pair,
while a miss could see the pair falling on the market paring back the hawkish
expectations.

For the CHF, the Swiss CPI recently surprised once again to
the downside. As a reminder, the SNB cut rates by 25 bps at the last policy
decision and mentioned that it’s prepared to intervene in currency markets as
necessary.

Moreover, the new inflation
forecasts were revised significantly lower signalling more rate cuts to come.
The market is pricing a 14% probability for a 50 bps cut in December.

USDCHF
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCHF pulled back to retest the previous resistance now turned support around the 0.8550 level and rallied
back to test the recent highs. The buyers will want to see the price breaking
higher on a hot CPI to increase the bullish bets into the 0.8730 level next.
The sellers, on the other hand, will want to see a soft CPI and a drop back
below the 0.8550 support to increase the bearish bets into the 0.8333
level next.

USDCHF Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have an upward trendline defining the current bullish
momentum. The buyers will likely keep on leaning on it to position for a break
above the resistance at 0.8607. The sellers, on the other hand, will want to
see the price breaking lower to pile in for a drop into the 0.8550 support and
beyond.

USDCHF Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the recent price action. We can see that we have a nice
support zone around the 0.8580 level where we can find the confluence of the trendline and the previous
swing high level. All eyes are now on the US CPI report as it will likely
decide the trend for the next weeks. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US CPI report and the US Jobless Claims figures. Tomorrow,
we conclude with the US PPI and the University of Michigan Consumer Sentiment
report.

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

The USD rallied across the
board last Friday following the hot US NFP report. The market priced out all the
aggressive rate cuts expectations and it’s now finally in line with the Fed’s
projections.

This week, the greenback
extended the gains as the market started to price in some chances of a pause in
November. The focus remains on the economic data.

Today we get the US CPI
report. We will likely need a hot report to see some more downside in the pair,
while a miss could see the pair rising on the market paring back the hawkish
expectations.

On the NZD side, the RBNZ
this week cut
interest rates by 50 bps as expected. The market is pricing an 83% probability
of another back-to-back 50 bps cut in November.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that NZDUSD sold off all the way down to the key 0.6050 support
zone. This is where we can expect the buyers to step in with a defined risk below
the support to position for a rally into the 0.6217 resistance. The sellers, on
the other hand, will want to see the price breaking lower to increase the
bearish bets into the 0.5850 support 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 keep on leaning on the trendline to position
for further downside, while the buyers will want to see the price breaking
higher to pile in for a rally into new highs.

NZDUSD 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 next direction will likely be decided by the US CPI report today. The red
lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US CPI report and the US Jobless Claims figures. Tomorrow,
we conclude with the US PPI and the University of Michigan Consumer Sentiment
report.

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

The sanctions will apply to the following firms: Edge Autonomy Operations LLC, Huntington Ingalls Industries Inc, and Skydio Inc. At the same time, ten US individuals are also being sanctioned as part of the same countermeasures. The list is as per the following (h/t @ Sino_Market):

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

• US mortgage applications -5.1% vs -1.3% prior
• Morgan Stanley expecting slight deceleration in tomorrow’s CPI
• ECB’s Patsalides says room for rate cut but Middle East implications need assessment
• Interest rate expectations for upcoming policy decisions
• Israeli PM Netanyahu held extensive talks with senior officials on response to Iran
• Views on major FX from UBS
• ECB’s Kazaks: Rate cuts are necessary as the economy is weak
• China’s new yuan loans likely surged in September as stimulus ramps up
• Market mood a bit sour this morning
• Category 5 Hurricane Milton to hit Florida Gulf Coast tonight with 160 mph winds
• Lloyd’s of London warning on potential $14.5 trillion global economic loss
• ECB’s Kazimir: Not as convinced as media reports on October cut
• Europe’s STOXX 600 bolstered by defensive sectors amidst China uncertainty
• What are the main events for today?
• British envoy Lammy embarks on China mission to mend ties
• Geopolitical risk premium in oil market eases slightly, says Goldman Sachs
• The @Newsquawk Europe Market Open: China finance briefing, ECB and Fed speakers ahead
• China’s finance ministry to detail fiscal stimulus plans on Saturday
• Japanese machine tool orders decline in September
• German Imports Drop More Than Expected, Exports Rise
• ECB ‚very likely‘ to reduce interest rates next week, says Villeroy
• China’s finance ministry briefing set for October 12; fiscal policy adjustments revealed
• Dollar Holds Steady Pre-Fed Minutes; Kiwi Drops on Rate Cut
• India cenbank keeps rates steady at 6.50%, shifts to ’neutral‘ stance
• World Bank says China growth rate will drop next year, doubt over recent stimulus measures

It’s been another dull session as we continue to wait for the US CPI release tomorrow. The price action remains rangebound in most markets.

The only notable news was about the China’s finance ministry holding a news conference on Saturday to
provide details on fiscal stimulus measures aimed at reviving the
faltering economy.

We had also some ECB speakers continuing to talk about the October cut which is already fully priced in by the markets. On the geopolitical front, nothing has changed as Israel has not decided yet on the scope and the timing for the retailiation against Iran.

In the American session, there’s no economic data to be released but we will hear from lots of Fed speakers. Finally, we will conclude with the FOMC Meeting Minutes later in the day, but as it’s almost always the case, they won’t matter.

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