• Eurozone September unemployment rate 6.5% vs 6.4% expected
• Germany September trade balance €16.5 billion vs €16.3 billion expected
• Fears high as Hezbollah leader set to speak for the first time since the war
• BOE’s Hauser says banks must guard against faster bank runs

Markets:

• EUR/USD up 28 pips to 1.0648
• WTI crude oil up 44-cents to $82.90
• US 10-year yields down 2.2 bps to 4.64%
• STOXX 600 flat
• Gold up $1 to $1987
• NZD leads, USD lags

Germany posted a robust trade surplus of €16.5 billion for September, although its exports showed a modest decline of 2.4% month-over-month. Meanwhile, France’s industrial production fell by 0.5%, and the Eurozone saw a slight uptick in unemployment, rising to 6.5% compared to the anticipated 6.4%. The data didn’t affect the euro but it crept up in the past two hours as the US dollar began to slide as a fresh bid for bonds appeared.

Cable managed to climb through yesterday’s best level to a one-week high of 1.2230, running some minor stops above yesterday’s high before paring back slightly. News out of the UK was light and the move was driven by the dollar side of the equation. On the Bank of England pricing now indicates only a 16% chance of BOE hike in December, rising to 25% later before switching to cuts in the back half of 2024.

USD/JPY slacked off to 150.20 after rising as high as 150.52 in Asia. Sellers appear to be lining up around that 150.50 level as it held several times over the past day.

The winner so far is NZD, which is up 24 pips or 0.37%. That’s despite a mediocre risk background in light of Apple’s 2.5% decline post-earnings.

This article was written by Adam Button at www.forexlive.com.

Trend
trading is a strategy that involves
identifying the direction of a market’s momentum and making trades in alignment
with that direction. It’s a popular approach among traders because it can
potentially yield significant profits over time. However, like any trading
strategy, it requires careful planning, discipline, and knowledge. Here are
some tips to help you succeed as a trend trader.

1. Understand the Basics: Before you start trend trading,
   make sure you understand the basics of the stock market and trading. This
   includes knowing how to read charts, understanding different types of
   orders (like stop-loss orders), and being familiar with various trading
   platforms.
2. Identify the Trend: The first step in trend trading is to identify the
   trend. This can be done by looking at the price action over a certain
   period. If the price is consistently moving upwards, it’s an uptrend. If
   it’s consistently moving downwards, it’s a downtrend.
3. Use Technical Analysis: Technical analysis is crucial in trend trading.
   Indicators like moving averages, relative strength index (RSI), and MACD
   can help you identify trends and potential reversal points. For instance,
   if a stock’s price crosses its moving average, it might indicate a trend
   change.
4. Set a Stop Loss: A stop loss is an order that automatically sells your
   position if the price drops to a certain level. It’s a way to limit your
   losses if the trend reverses. Always set a stop loss when you enter a
   trade.
5. Be Patient: Trend trading is not about making quick profits. It’s
   about riding the trend for as long as it lasts, which could be weeks,
   months, or even years. Be patient and let your profits run.
6. Don’t Chase the Market: If you’ve missed the start of a trend, don’t try to
   jump in late. Chasing the market can lead to poor decision-making and
   increased risk. Wait for the next opportunity instead.
7. Manage Your Risk: Never risk more than you can afford to lose. A common
   rule is to never risk more than 1-2% of your trading capital on a single
   trade. This way, even if a trade goes against you, it won’t wipe out your
   account.
8. Keep Learning: The financial markets are constantly changing, and so
   should your knowledge. Keep learning about new strategies, tools, and
   trends. Read books, take courses, and learn from experienced traders.
9. Review Your Trades: Regularly review your trades to identify what’s
   working and what’s not. This will help you refine your strategy and
   improve your trading performance over time.
10. Stay Disciplined: Stick to your trading plan and don’t let emotions
    drive your decisions. It’s easy to get carried away by fear or greed, but
    discipline is key to long-term success in trend trading.

Remember, successful trend trading takes time and practice.
Start with a demo account to test your strategy before risking real money. And
always keep in mind that while trend trading can be profitable, it also
involves significant risk.

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

Contrarian trading
is an investment style that goes against prevailing market trends by
buying assets that are performing poorly and then selling when they perform
well. Contrarian traders believe that people who say the market is going up do
so only when they are fully invested and have no more purchasing power. At this
point, the market is at a peak; when people predict a downturn, they have
already sold out, and the market can only go up.

Here are
some tips for contrarian trading:

1.
Research
and Knowledge:
Before you start contrarian trading, it’s crucial to understand the market
conditions and the factors affecting the prices. Read financial news, reports,
and follow market trends.

2.
Patience: Contrarian trading often requires a
longer time horizon for returns. It’s important to be patient and wait for your
investments to yield results.

3.
Risk
Management: Like
any other trading strategy, contrarian trading involves risks. Make sure to
diversify your portfolio to mitigate potential losses.

4.
Discipline: Stick to your investment plan even if
the market moves in the opposite direction. Don’t let emotions drive your
trading decisions.

5.
Analysis: Regularly analyze your trading
performance. Learn from your mistakes and make necessary adjustments to your
trading strategy.

Contrarian
trading is a strategy that involves going against the current market trends.
It’s about buying assets that are performing poorly and selling when they
perform well.

Here are some tips for successful
contrarian trading:

·
Understand
Market Psychology: Contrarian traders need to understand the psychology of the
market. They should be able to identify when investors are likely to act
irrationally, either due to fear or greed.

·
Do
Your Homework: Research is key in contrarian trading. You need to thoroughly
analyze the fundamentals of the underperforming assets before investing in
them.

·
Patience
is Key: Contrarian trading isn’t about quick profits. It often requires waiting
for the market to recognize an asset’s true value. Be patient and don’t rush
your trades.

·
Risk
Management: Contrarian trading can be risky. Ensure you have a solid risk
management strategy in place. This could involve setting stop losses or
diversifying your portfolio.

·
Stay
Disciplined: Stick to your investment plan even if the market moves against
you. Emotional decisions can lead to poor trading choices.

·
Regular
Review: Regularly review and adjust your trading strategies based on
performance and changing market conditions.

While
contrarian trading can be profitable, it’s not suitable for everyone. It
requires a deep understanding of market dynamics, a high tolerance for risk,
and the patience to wait for potentially long periods before seeing returns.

Remember,
contrarian trading isn’t for everyone. It requires a deep understanding of the
markets, patience, and a high tolerance for risk. But with careful planning and
execution, it can be a profitable trading strategy.

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

The US dollar has slacked off in the past hour and that’s opened the door towards a fresh one-week high in cable. GBP/USD is just a couple pips shy of yesterday’s high of 1.2225 and there could be some stops if it’s broken.

Even if it does break, I wouldn’t expect fireworks with non-farm payrolls just over an hour away.

As it stands, cable is on track for a third straight day of gains and fourth in the past five. In the bigger picture though, it’s consolidating near six-month lows. The next leg is going to depend on what the US dollar does. Positioning is crowded in dollar longs so if US data begins to weaken or the Fed takes a more-explicit neutral stance, then there could be some shifts.

In addition, equities are now in the seasonally-strongest portion of the year. If stock markets continue to climb then expect this pair to climb at the same time as it’s one of the higher-beta pairs.

This article was written by Adam Button at www.forexlive.com.

• Prior 5.25%
• Bank rate vote vs 3-6 expected
• Statement details to follow..

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

Headlines:

• Is the bond market rout finally over?
• Dollar stays pinned down after yesterday’s retreat
• Equities perk up in European morning trade
• BOJ’s main message is to maintain easy policy, even if their actions contradict – report
• ECB’s Knot: Policy rates now are at a good ‚cruising altitude‘
• Eurozone October final manufacturing PMI 43.1 vs 43.0 prelim
• Germany October unemployment change 30k vs 15k expected
• Switzerland October CPI +1.7% vs +1.7% y/y expected
• US October Challenger layoffs 36.84k vs 47.46k prior

Markets:

• NZD leads, USD lags on the day
• European equities higher; S&P 500 futures up 0.6%
• US 10-year yields down 2.9 bps to 4.705%
• Gold up 0.3% to $1,987.87
• WTI crude up 1.4% to $81.56
• Bitcoin flat at $35,431

The reversal rally in bonds yesterday was the main story and the reverberations continue to be felt today, with yields also looking rather sluggish in European trading.

10-year Treasury yields are down at the lows near the 4.70% now and that is dragging the dollar down with it as risk trades continue to soar. The squeeze continues and will likely stay the course until we get to the US jobs report tomorrow.

Equities were cautiously optimistic early on before eventually running with a full on rally, as European indices are now clocking in 1.5% to 1.9% gains across the board. S&P 500 futures were up only 0.2% in the handover from Asia, but are now seen up 0.6% or 26 points on the day.

EUR/USD moved up from 1.0590 to 1.0630 levels while AUD/USD is largely holding gains at around 0.6430-40 levels on the day, up by 0.6%. The dollar is the laggard with USD/JPY trailing by 0.4% to 150.30 levels although not much changed from the end of Tokyo trading.

It’s all about the question if this is the top in yields and if so, that could as well signal a top in the dollar rally over the last few months.

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

• Prior 47.46k

US-based employers announced 36,836 job cuts last month, a roughly 9% increase compared to the same period last year. That continues the trend of rising job cuts relative to the corresponding month a year ago and can be seen as a sign of softening in labour market conditions overall.

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

After a surprise pause in September here, the BOE has gotten away with making their job a little easier in communicating today’s policy decision. The thinking previously was to get one more rate hike in as they could still get away with it. But now that ship has sailed and we’re left staring at another decision where the central bank is to keep its bank rate unchanged at 5.25%.

And with price pressures trending lower as a whole, that is working to their favour in having announced a pause in September. As such, there is no need to change the status quo for now.

There shouldn’t be any surprises as the BOE is likely to reaffirm that rate hikes are doing their job and will take some time to see the full effect. Meanwhile, inflation developments are progressing positively but the road ahead is still a long one. For now, the pressure on the economy is not one that is crushing just yet and so there is no need to poke the bear on that front.

Given an easier walkthrough for the BOE this time around, the pound reaction should be rather muted; all else being equal.

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

Yesterday, the Fed left interest rates unchanged as
expected with basically no change to the policy statement. Fed Chair Powell
repeated once again that they are “proceeding carefully” as the full effects of
the policy tightening have yet to be felt.

There were some expectations for him to hint or
signal something for the December meeting given that the September Dot Plot
showed another rate hike by the end of the year, but Powell instead
said that they “have not made any decisions on future meetings” sparking a
rally in the Dow Jones.

On the data front, yesterday the US Job Openings beat
expectations, but the ISM Manufacturing PMI missed
by a big margin. The market might be taking this as good news for a relief
rally in the short term, but the bulls may want to be careful going forward.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones
bounced around a previous swing level and it’s now approaching key resistance levels.
In fact, we can see that the price is near the 61.8% Fibonacci retracement level
and the red 21 moving average.

This is where we can expect the sellers to step in
and further increase the bearish bets if the price reaches the trendline. The
buyers, on the other hand, will want to see the price breaking above the
trendline to invalidate the bearish trend and start eyeing the all-time high.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we had a divergence with the
MACD right
around the key swing level. This is generally a sign of weakening momentum
often followed by pullbacks or reversals. In this case, since the price broke
above the minor trendline, the reversal got confirmed and the buyers piled in
more aggressively to extend the rally into new highs.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
trend on this timeframe is clearly bullish with the price printing higher highs
and higher lows and the moving averages being crossed to the upside. We can
expect this trend to continue as long as the price stays above the trendline and
the red 21 moving average. If the price falls below the trendline, the sellers
should step in and position for a drop into new lows as that could be the
signal that the short term correction has ended.

Upcoming Events

Today, we have only the US Jobless Claims data,
which will be important for the market given the recent weakness in Continuing
Claims. Tomorrow, we conclude the week with the US NFP report and the ISM
Services PMI.

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

Copper is still trading
inside a major triangle as the fundamental outlook remains murky. The Chinese
stimuli had a positive effect in the past months as the data picked up, but
this week the PMIs fell again and the Manufacturing sector went
back into contraction. Moreover, the economic data in other major economies
like Europe is deteriorating pretty quickly as the block is falling into a
recession. The US economy remains resilient for now, but recently the labour
market data has started to weaken, so that is something that the market will
watch carefully.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Copper is still
trading inside the descending triangle. The
latest bounce on the 3.55 support led to a
rally into the minor downward trendline where
the price got rejected. This where we can expect the sellers to step in with a
defined risk above the trendline to position for a drop into the support aiming
for a breakout. The buyers, on the other hand, will want to see the price
breaking higher to invalidate the bearish setup and increase the bullish bets
into the next major trendline around the 3.75 level.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the buyers
failed to break out of the trendline on their first try as the price fell back
below it. The price is now bouncing on the upward trendline where we can find
the confluence with the
50% Fibonacci retracement level
and the red 21 moving average. This is
where the buyers should step in with a defined risk below the trendline and
target a breakout. The sellers, on the other hand, will want to see the price
breaking lower to invalidate the bullish setup and increase the bearish bets
into the 3.55 support.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that
Copper is now consolidating between the resistance around the 3.68 level and
the support around the 3.66 level. A breakout on either side should lead to a
strong and sustained move, so the market participants will be watching it
carefully.

Upcoming Events

This week, we will get lots of tier one data points with
the US labour market and the FOMC decision in focus. Today we will get the US
ADP, the ISM Manufacturing PMI, the Job Openings data and the FOMC rate
decision. Tomorrow, we will see the US Jobless Claims data, while on Friday we
conclude the week with the US NFP report and the ISM Services PMI. Weak data is
likely to weigh on Copper as recessionary fears will come back.

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