Is the relief today going to be a short-lived one? US futures are looking nervy now with S&P 500 futures up by just under 10 points, or 0.2%, currently. The gains earlier were as much as 0.7% with Nasdaq futures also trimming gains to just 0.7% now after having been over 1% higher earlier in the day.

Dow futures are already marked down by 0.1% and this could be a sign that the mood music in tech might be swinging around as well. That despite the better earnings that we have seen from Intel and Amazon overnight.

It looks like we might be in for a bumpy end to the week. Strap yourselves in, folks.

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

US

• The Fed left interest rates unchanged as expected at the last meeting.
• The macroeconomic projections were revised higher,
  and the Dot Plot showed that the FOMC still expects another rate hike by the
  end of the year with less rate cuts projected in 2024.
• Fed Chair Powell reaffirmed their data dependency but added that
  they will proceed carefully.
• The recent US CPI beat expectations on the headline
  figures, but the core measures came in line with forecasts and the market’s
  pricing barely changed.
• The labour market remains pretty resilient but there are some signs
  of softness as seen yesterday with another miss in Continuing Claims.
• The US Retail Sales last week beat expectations by a big
  margin with positive revisions to the prior figures, suggesting the consumers’
  spending is still solid.
• The US PMIs this week showed that the economy now
  looks more balanced and resilient.
• Fed Chair Powelland other FOMC members continue to highlight the rise in long term yields as doing
  the job for the Fed and therefore they are expected to keep rates steady in
  November as well.
• The market doesn’t expect the Fed to hike anymore.

New Zealand

• The RBNZ kept its official cash rate
  unchanged while
  stating that demand growth continues to ease and it’s expected to decline
  further with monetary conditions remaining restrictive.
• The New Zealand inflation data last week missed expectations
  supporting the RBNZ’s stance.
• The latest employment data surprised to the upside.
• The wage growth has also missed
  expectations and it’s something that the central banks are watching closely.
• The Manufacturing PMI continues to slide further into
  contraction, but the Services PMI jumped back into expansion.
• The RBNZ is expected to keep the
  cash rate steady at the next meeting.

NZDUSD Technical Analysis –
Daily Timeframe

On the
daily chart, we can see that the NZDUSD pair continues to diverge with the
MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. The pair recently pulled back into the broken support turned resistance and fell
to new lows as the risk sentiment worsened. From a risk management perspective,
the sellers will have a much better risk to reward setup leaning on the major trendline but
envisioning such a big rally at the moment is very hard.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that even on this
timeframe we have a divergence with the MACD. The price pulled back into the
trendline where we can find the confluence with the
61.8% Fibonacci retracement level
and the red 21 moving average. This is
where we can expect the sellers to step in with a defined risk above the
trendline. The buyers, on the other hand, will want to see the price breaking
higher to extend the rally into the 0.5860 resistance.

NZDUSD Technical Analysis –
1 hour Timeframe

On the
1 hour chart, we can see more closely the bearish setup. The buyers leant on
the counter-trendline where they also had the red 21 moving average for
confluence. The sellers, on the other hand, will want to see the price breaking
lower to confirm the rejection from the downward trendline and the Fibonacci
level and increase the bearish bets into new lows.

Upcoming Events

Todaywe will get the US PCE report which is unlikely
to change anything for the Fed at this point in time.

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

WTI crude itself is up roughly 2.5% to $85.28 as oil is seeking a rebound towards the end of the week. The low this week nearly touched the $82 level, where we also saw price find a rebound at the start of the month:

The tensions in the Middle East are still somewhat persisting, even if they haven’t quite yet escalated this week. There’s still lingering uncertainty and that is likely helping to keep oil underpinned for now.

And more so ahead of the weekend, where traders might be afraid of the situation worsening in the Israel-Hamas conflict as well as general tensions surrounding the region.

But in the bigger picture, it seems like we are getting stuck into a range for WTI crude between $82 and $90 at least for now. And despite the over 2% climb today, oil is still down a little over 3% on the week following the Monday and Tuesday drop in particular.

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

Yesterday we got another negative day for the
Nasdaq Composite as the sellers continue to remain in control. The most likely
culprit might have been another big miss in the US Continuing Claims figures
which is signalling that the labour market is indeed softening and this might
accelerate in the next few months. Moreover, we continue to have the risk of
the ground invasion in Gaza over the weekend, so the buyers might not want to
hold long positions into the weekend.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the
daily chart, we can see that the Nasdaq Composite yesterday opened below the
bottom trendline and
continued lower as the sellers increased their bearish bets and the buyers
folded. There’s no support now
until the 12274 level, which is the target for the sellers at the moment.
That’s where we can expect the buyers to step in with a defined risk below the
level to position for a rally back to the 13174 resistance.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more closely the
yesterday’s selloff. The price is now a bit overstretched to the downside as
depicted by the distance from the blue 8 moving average. In such
instances, we can usually see a pullback into the moving average or some
consolidation before the next move.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
now have a good resistance zone around the broken trendline where we can find
the confluence with
the downward trendline, the red 21 moving average and the 38.2% Fibonacci
retracement level. This is where we can expect the
sellers to step in again if we get a pullback. The buyers, on the other hand,
will want to see the price breaking above the trendline to invalidate the
bearish setup and position for a rally into the 13174 resistance.

Upcoming
Events

Today we will get the US PCE report, which is not
expected to change anything for the Fed at this point in time.

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

US

• The Fed left interest rates unchanged as expected at the last meeting.
• The macroeconomic projections were revised higher,
  and the Dot Plot showed that the FOMC still expects another rate hike by the
  end of the year with less rate cuts projected in 2024.
• Fed Chair Powell reaffirmed their data dependency but added that
  they will proceed carefully.
• The recent US CPI beat expectations on the headline
  figures, but the core measures came in line with forecasts and the market’s
  pricing barely changed.
• The labour market remains pretty resilient as seen once again last
  week with the beat inJobless Claims, although continuing claims missed for a second
  time in a row.
• The US Retail Sales last week beat expectations by a big
  margin with positive revisions to the prior figures, suggesting the consumers’
  spending is still solid.
• The US PMIs this week showed that the economy now
  looks more balanced and resilient.
• Fed Chair Powelland other FOMC members continue to highlight the rise in long term yields as doing
  the job for the Fed and therefore they are expected to keep rates steady in
  November as well.
• The market doesn’t expect the Fed to hike anymore.

UK

• The BoE kept interest rates unchanged at the last meeting.
• The central bank is leaning towards
  keeping interest rates “higher for longer”, although it kept a door open for
  further tightening if inflationary pressures were to be more persistent.
• The latest employment report showed a slowdown in wage growth
  and some job losses in September which could point to a softening labour
  market.
• The UK CPI last week slightly beat expectations but given
  the softening in the labour market it’s unlikely to change the BoE’s stance.
• The UK PMIs this week showed further contraction in the
  services sector.
• The market doesn’t expect the BoE to
  hike anymore.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the GBPUSD pair
probed above the key trendline but got
rejected as the UK PMIs disappointed and the US ones surprised. The US Dollar
remains in the driver’s seat as the US economy is outperforming its peers and
the negative risk sentiment is leading to safe haven flows. The target for the
sellers is the 1.1840 level and we should see the bearish momentum picking up
as soon as the price breaks the recent lows.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see the selloff from
the key trendline with the sellers increasing the bearish bets on the break of
the support zone
around the 1.2220 level and then on the break of the counter-trendline. The
buyers don’t have much to lean onto at the moment, but we might find them
around the recent lows as they try to position for a rally back to the 1.23
handle. The sellers remain in control though and we should see them piling in
at every rally.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that from
a risk management perspective, the sellers have a good resistance zone around
the 1.21 handle where we can find the confluence with
the trendline, the Fibonacci
retracement levels and the red 21 moving average. If
the price breaks above the trendline, the buyers should pile in to extend the
rally into the 1.2180 level where the sellers will step in again.

Upcoming Events

Todaywe will see the latest US Jobless Claims data
with the market likely focusing on the Continuing Claims figures as they’ve
missed expectations two times in a row already and might be a signal that the
labour market is weakening. Tomorrow, we will get the US PCE report which is
unlikely to change anything for the Fed at this point in time.

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

There will no be no changes to key interest rates today and no tweaks to other policy instruments as well. So, that leaves very little for the ECB to work with and not much for markets to really scrutinise overall. It’s going to be all about the language and how the ECB wants to communicate their future steps, although whether or not traders believe that is another thing.

The base case is that the central bank is going to maintain most of the language from September, acknowledging more positive inflation developments. That should outline their cause for pause before emphasising that at this point, sticking with higher rates for longer is the more impactful decision in the fight against inflation.

I reckon Lagarde might also point to some risks amid the geopolitical tensions in the Middle East but she should fall short of saying that such a development would be enough to warrant further rate hikes amid more persistent inflation. The magic words will be „it is still too early to tell“.

Besides that, I don’t see much else that the ECB can work with at this point. There might be a word or two about potentially discussing unwinding PEPP reinvestments earlier but I would expect policymakers to keep kicking that can down the road. As such, it might not feature too prominently in the statement or in Lagarde’s comments later on.

The ECB has sold a pause and they now have to go with that, at least for the time being. I would expect that even with worsening economic conditions, Lagarde will still tout that they have room to work with should they need to hike in December. But not any time sooner and so, there should not be any fireworks today.

So, where does this leave the euro?

At the balance, the single currency should not be too much impacted as we already know what to expect from the ECB. And their recent communication has also emphasised what they will try to sell again from today’s meeting. In the case of EUR/USD, the stronger dollar now will be the more crucial factor driving price action alongside bond yields and broader market sentiment.

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

• Prior -14

That’s a poor reading for the monthly retail sales balance as UK retailers suffer the joint-worst October on record, according to CBI. Retailers are seen cutting orders to suppliers and are expected to do so again in November and that does not bode well heading into the winter months. High interest rates and cost-of-living concerns are definitely the problem right now.

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

This week started like the last one with a broader
rally in the markets as the risk sentiment got supported by another lack of a
ground operation in Gaza over the weekend and the positive news about a couple
of hostages being released. Yesterday, on the other hand, we got the complete
reverse with the Dow Jones opening lower and selling off for no apparent reason
except a reaction to some key resistance levels. The selloff accelerated in the
evening as the Israeli PM Netanyahu said
that they were preparing for a ground invasion. Will we see another selloff
into the weekend?

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that after a brief
bounce at the start of the week, the Dow Jones yesterday began to fall again.
The sellers are eyeing the 32597 level at the moment as the risk sentiment remains
negative. That’s where we can expect the buyers to step in with a defined risk
below the level to position for a rally back into the trendline around
the 34000 level.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that there’s not
much to glean from this timeframe. The buyers might want to step in already at
the equal lows but in the current context, there’s a high chance that the Dow
Jones continues to fall into the weekend.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price yesterday rejected the resistance around
the 33265 level where we had the confluence with
the trendline and the 38.2% Fibonacci
retracement level. The buyers will want to see the
price breaking above the trendline to gain more confidence and pile in to
target a rally into the 34000 resistance.

Upcoming Events

Today, we will see the US Jobless Claims data with
the market likely focusing on the Continuing Claims figures as they’ve been
recently showing some softness. The market may not like bad data given the
fragile risk sentiment. Tomorrow, we will get the US PCE report, which is not
expected to change anything for the Fed at this point in time.

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

It’s still a hard one to read as to whether or not the 90-pip drop in USD/JPY earlier had to do with Tokyo intervention. The size and speed of the fall is suggestive but then why all of a sudden at 150.70 and not at a level just above 150.00 again like before? There are certainly some question marks about that. But since then, the pair has stabilised somewhat although traders are weary about pushing it too far above the figure level now:

There is the possibility that the drop was also triggered by the algos, with there being a note by BofA touting the possibility of the BOJ raising its 10-year JGB yield ceiling to 1.50% next week. That comes amid the rising pressure in bond yields globally. But in any case, the fact that USD/JPY is able to work its way back up above 150.00 is convincing enough to say that the drop isn’t one that matters all too much from a technical perspective – at least for now.

That being said, the dollar has since cooled off and is now trading mostly little changed across the board as the earlier gains are now looking rather tentative in European morning trade.

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

Headlines:

• Australian dollar surrenders gains from stronger CPI data earlier
• What are the odds of a RBA rate hike next month now?
• Bitcoin consolidates gains after ETF ticker fiasco
• Germany October Ifo business climate index 86.9 vs 85.9 expected
• Eurozone September M3 money supply -1.2% vs -1.7% y/y expected
• Switzerland October Credit Suisse investor sentiment -37.8 vs -27.6 prior
• US MBA mortgage applications w.e. 20 October -1.0% vs -6.9% prior
• IMF’s Georgieva: Inflation is still high
• Hong Kong to cut stamp duty on stock trading to 0.10% from 0.13%
• Japan reportedly eyes one-year income, resident tax cuts from June next year

Markets:

• USD leads, NZD lags on the day
• European equities mixed; S&P 500 futures down 0.3%
• US 10-year yields up 1.9 bps to 4.859%
• Gold up 0.2% to $1,973.24
• WTI crude flat at $83.69
• Bitcoin up 1.0% to $34,253

It was a slower session today as traders didn’t have as much to work with in European morning trade compared to yesterday, though there were some decent moves all around.

The Australian dollar was the standout in Asia, advancing after a stronger-than-expected inflation report but gave it all back during the session and then some. This comes as stocks are pinned down, in particular tech shares after a mixed picture from Microsoft and Google’s earnings releases overnight.

AUD/USD was up to near 0.6400 earlier on but is now down 0.3% on the day to 0.6335 as the dollar also firmed slightly.

USD/JPY continues to hover just below 150.00 as Treasury yields keep steadier while EUR/USD is down 0.1% to 1.0575 from around 1.0590 earlier in the session. GBP/USD is marked down by 0.3% to 1.2125 as the greenback is keeping the advance from yesterday going, amid sluggish European PMI data.

Besides that, Bitcoin continues to consolidate gains after a bit of a fiasco with regards to its ETF ticker – keeping above $34,000 for now.

If anything else, watch out for the 5-year Treasury auction later as that could be a catalyst for a move in markets – more so than the BOC and Powell I reckon.

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