• Stocks dribble lower in European morning trade
• Major currencies not doing much so far on the session
• Bonds under the spotlight with little else to focus on
• European equities mostly a touch softer at the open today
• What are the main events for today?
• Eurostoxx futures +0.1% in early European trading
• FX option expiries for 22 October 10am New York cut
• BOE chief economist lambasts ONS over poor jobs data quality
• Chinese equities continue to look more pensive this week
• USD/JPY underpinned by higher yields, faces up against key resistance levels now
• BOJ Executive Director Kato – not targeting FX levels
• USD/JPY above 150.90 again after meek comments from Japan

Markets:

• NZD leads, JPY lags on the day
• European equities lower;
  S&P 500 futures down 0.45%
• US 10-year yields up 1 bps to 4.206%
• Gold
  up 0.61% to $2,735
• WTI
  crude up 0.94% to $71.22
• Bitcoin
  down 0.08% to $67,300

It’s been
another slow session as the lack of key economic releases and limited news flow
kept the price action pretty rangebound.

The US
Dollar continues to get some support from higher Treasury yields and if the
recent days is something to go by, we might see some more legs higher in the US
session.

Gold erased
all of the yesterdays’ decline and it’s now trading right near the all-time
high. It’s been ignoring the rise in real yields, so it will be interesting to
see who gives in.

In the equity
markets, we continue to see some consolidation around the highs as the markets
are probably looking for catalysts to push into new highs and for now are
getting pressures by higher yields.

Unfortunately,
we have to wait until Thursday to get some market moving data with the releases
of the Flash US PMIs and the US Jobless Claims.

For now, it’s
more about capital preservation until we get to one of the most important
events of the year in November, that is the US election. There’s a good
argument that the markets have been already positioning into a Trump victory.

Time will
tell.

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

Fundamental
Overview

The lack of catalysts
recently kept the US Dollar supported across the board despite the slowdown in
momentum. The market might now be looking forward to the first weeks of
November when we will get the key economic data, the FOMC decision and the US
elections.

There’s been also a good
argument that the markets are already positioning for a Trump victory and that
should translate in USD strength as it should appreciate on higher growth and
less rate cuts expectations. Nevertheless, not all markets have been in sync
with this view.

On the CAD side, the latest
Canadian CPI missed expectations and sealed the
50 bps cut at the upcoming meeting with the market seeing now a 99% probability
from 48% before the inflation report. The market then sees another rate cut of
at least 25 bps in December and roughly four more in 2025.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD eventually bounced back above the 1.3785 level and extended the
rally into the 1.3850 level. We are now near a key resistance zone.

This is where we can expect
the sellers to step in with a defined risk above the 1.3860 resistance to
position for a drop back into the 1.36 support. The buyers, on the other hand,
will want to see the price breaking higher to increase the bullish bets into
new highs.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the break above the 1.3785 level that led to a more bullish
price action into the key resistance. There’s not much else we can glean from
this timeframe, so we need to zoom in to see some more details.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum.
The buyers will likely keep on leaning on it to position for further upside,
while the sellers will want to see the price breaking lower to target a drop
back into the 1.3785 level. The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow we have the BoC rate decision. On Thursday, we get the Flash US PMIs,
and the US Jobless Claims figures. On Friday, we conclude the week with the
Canadian retail sales data.

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

European indices are also all in negative territory, with the DAX also down by 0.1% after a decent open earlier. Other major indices in the region are down some 0.6% to 0.8% with the negative mood also reflected in US futures. S&P 500 futures are down 0.5% with Nasdaq futures down 0.6% currently.

In the bigger picture, it’s a case of shaving some off the top for equities. And investors can look to the bond market as a likely reason for that. 10-year Treasury yields are up again today, touching 4.21% currently.

The technical focus here is starting to get traders to stand up and take notice. And that means broader markets are also going to have to pay attention to that too.

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

The dollar is keeping more mixed with light changes being observed overall. There’s not much appetite or follow through, as traders are keeping a watchful eye on the bond market for anything. USD/JPY is one to pay attention to as such but is running up against a key resistance region as outlined here.

Besides that, all the other major currencies are stuck in narrower ranges on the day. The antipodeans are up slightly but it’s not really saying a lot after the fall yesterday. AUD/USD is up 0.3% to 0.6678 but is still keeping below its own 100-day moving average of 0.6695.

Just be wary though that the risk mood is starting to shift a little with US futures now trending lower. S&P 500 futures are down 0.5% with 10-year Treasury yields keeping higher at around 4.21%.

That might eventually lead to some spillover moves in FX later on in the day.

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

Fundamental
Overview

The lack of catalysts
recently kept the US Dollar supported across the board despite the slowdown in
momentum. The market might now be looking forward to the first weeks of
November when we will get the key economic data, the FOMC decision and the US
elections.

There’s been also a good
argument that the markets are already positioning for a Trump victory and that
should translate in USD strength as it should appreciate on higher growth and
less rate cuts expectations. Nevertheless, not all markets have been in sync
with this view.

On the GBP side, we got the
UK CPI report last week where the data missed
expectations across the board and prompted the market to expect another 25 bps
cut in December. In 2025, the market sees roughly four more rate cuts.

GBPUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that GBPUSD is now trading below the 1.30 handle although the pair remains
in a consolidation just beneath the key level. We are now getting close to the
major trendline where we can expect the buyers to
step in with a defined risk below it to position for a rally into new highs.
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 that we have a minor downward trendline defining the current bearish momentum.
If the price gets there we can expect the sellers to lean on it to position for
new lows, while the buyers will look for a break higher to increase the bullish
bets into the 1.32 handle.

GBPUSD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the recent price action with kind of a range between the
1.2972 low and the 1.30 handle as resistance.
The sellers will want to see the price breaking lower to increase the bearish
bets into the major trendline, while the buyers will look for a break higher to
target a rally into the downward trendline. The red line define the average daily range for today.

Upcoming
Catalysts

This week is pretty empty on the data front with market moving releases scheduled
for the latter part of the week. On Thursday, we get the Flash UK and US PMIs,
and the US Jobless Claims figures.

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

Headlines:

• Dollar keeps steadier so far on the session
• Gold remains undaunted as the run higher continues
• Weekly update on interest rate expectations
• ECB’s Šimkus says lower rates possible if disinflation gets entrenched
• ECB’s Šimkus: Policy will clearly become less restrictive from here
• ECB’s Kažimír says all options are on the table for December meeting
• Germany September PPI -0.5% vs -0.2% m/m expected
• SNB total sight deposits w.e. 18 October CHF 462.3 bn vs CHF 467.1 bn prior

Markets:

• CHF leads, AUD lags on the day
• European equities lower; S&P 500 futures down 0.4%
• US 10-year yields up 4.3 bps to 4.128%
• Gold up 0.6% to $2,736.00
• WTI crude up 2.3% to $70.81
• Bitcoin down 0.1% to $68,325

It was a quiet session but there were some decent moves in broader markets.

Of note, equities trended lower after a more pensive start and alongside higher yields, it pushed the dollar a little higher during the session.

EUR/USD moved down from 1.0860 to 1.0845 while USD/JPY notably gained from a low of 149.10 in Asia to clip the 150.00 mark briefly. As equities are slightly softer, the antipodeans are lagging with AUD/USD falling back below its 100-day moving average – down 0.3% to 0.6685.

US futures gradually nudged lower during the session, with little catalysts in general. The same goes for European indices and this is pretty much weighing on broader sentiment. Tech shares are leading declines with S&P 500 futures down 0.4% and Nasdaq futures down 0.6%.

The overall market mood is more mixed though with bonds being offered. Higher Treasury yields is helping to underpin USD/JPY as such.

In the commodities space, gold continues to shine ever so brightly in a push to fresh record highs again near $2,736. Up, up, and away we go.

Looking to US trading, there won’t be much catalysts on the agenda so traders will continue to be left to their own devices to start the week.

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

• December meeting is wide open
• Will be in a strong position to ease further if accelerated pace of disinflation continues
• Increasingly confident that disinflation path is on solid footing
• But still need more evidence, especially on services inflation

Well, unless the economy miraculously bounces back in the final quarter of the year, it will be tough for the ECB to fight the narrative of another rate cut. As things stand, traders have fully priced in a 25 bps move for December.

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

Fundamental
Overview

Last Friday, the PBoC
announced new easing measures which included further rate cuts and stock buyback
funding. Moreover, we got
some positive economic
data with Retail Sales
and Industrial Production beating expectations by a big margin. These catalysts
provided support for copper which erased most of last week’s losses.

Copper
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that copper bounced around the 4.32 support zone where we had also the 61.8% Fibonacci retracement level for confluence. This is where the buyers stepped
in and then increased the bullish bets following the new easing measures
announcement from the PBoC.

The sellers will want to
see the price turning around and breaking below the 4.32 support to start
targeting the trendline around the 4.20 level.

Copper Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price broke above the downward trendline increasing the bullish
momentum as more buyers piled in. The first target should be the swing level at
4.51 which the buyers will need to break to extend the rally into the 4.70
resistance next. The sellers, on the other hand, will likely step in around the
4.51 level to position for a drop back into the 4.32 support.

Copper Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we now have a minor upward trendline defining the current bullish
momentum. The buyers will likely keep on leaning on it to position for further
upside, while the sellers will look for a break lower to position for a drop
back into the 4.32 support. The red lines define the average daily range for today.

Upcoming
Catalysts

This week is pretty empty on the data front with market moving releases scheduled
for the latter part of the week. On Thursday, we get the Flash Japanese and US
PMIs, and the US Jobless Claims figures.

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

The ranges for the day aren’t overly interesting but the dollar is seen holding a slight edge in European morning trade. It comes as Treasury yields are pushing higher as well, allowing for some light action on the session. USD/JPY is now marked up by 0.3% to 149.95 from a low of 149.10 in Asia earlier in the day.

In the bigger picture, USD/JPY remains pinned closer to the 150.00 mark and that remains a key level to watch. There is also key resistance closer to the 50.0 Fib retracement level and the 100-day moving average (red line) near 150.76 currently. So, that is the bigger technical region in play for now.

Besides that, GBP/USD is down 0.2% to 1.3020 and AUD/USD down 0.2% to 0.6690 currently. The latter is in an interesting spot as it slips back below its own 100-day moving average of 0.6695.

The moves are coming as bond yields are seen nudging higher again today. 10-year Treasury yields are up another 3 bps to 4.116% with 2-year yields at 3.982% on the day. The former is seeing a bounce after testing the 4% mark last week, with bond sellers drawing a line at the key level.

There’s not much else to work with besides flow movement in European trading thus far. The economic calendar to start the week isn’t anything enticing. So, traders will be left to deal with the technical plays and getting a feel of trading sentiment with each passing session.

That until we get the next key catalyst to really move markets. And that might not come until later in the week.

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

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