• US Sept housing starts 1.354m vs 1.350m expected
• Bostic: Neutral policy rate is in the 3-3.50% range
• Fed’s Bostic: We may see a lull in activity and spending around the election
• Baker Hughes US oil rig count +1
• Fed’s Waller does not comment on monetary policy or the economic outlook
• Biden: Understands how and when Isreal will respond to Iran missile attack
• ECB’s Makhlouf: I do not believe rates should have been cut faster
• Atlanta Fed GDPNow remains unchanged 3.4% for the third quarter
• Putin: A BRICS unified currency is premature

Markets:

• Gold up $27 to record $2719
• US 10-year yields down 2 bps to 4.07%
• WTI crude oil down $1.27 to $69.40
• S&P 500 up 0.3%
• JPY leads, CAD lags

Happy Friday and an especially happy on to the gold bugs, who are being richly rewarded with a 4-day rally and a fresh all-time high. The bids were strong and steady with dips being bought, despite much better sentiment in Chinese equities today (MCHI up 4.4%).

The upbeat mood in China led to a decent retracement in the US dollar and erased most of yesterday’s retail-sales-driven bid. The thinking is that a stronger economy in China will spill over to Europe and world growth, narrowing the gap with the US. The market is also getting excited about 2025 growth in general as equities continue to send positive signals.

The euro rebounded from a two-month low yesterday and gained 33 pips on the day in steady bids up to 1.0864 as the market tries to sniff out a 50 bps cut in December (odds at 23%). Perhaps that reflects optimism that inflation will stay low in light of another decline in oil prices.

The pound climbed back above 1.30 but carved out a minor double top ahead of 1.3075 and that’s a level to watch next week. Last at 1.3042.

Running against the upbeat trend was the loonie, once again. That was largely an oil trade but eyes are also on the Bank of Canada decision next week as the market prices in a 50 basis point rate cut, with the odds now up to 93%.

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

The earnings season heats up a bit next week with Tesla, Boeing, AT&T, and Coca-Cola leading the way.

Monday

After Close:

• SAP (SAP)
• Nucor (NUE)
• Logitech (LOGI)
• Zions Bancorporation (ZION)

Tuesday

Before Open:

• Verizon (VZ)
• General Motors (GM)
• 3M (MMM)
• RTX (RTX)
• Freeport McMoRan (FCX)
• GE Aerospace (GE)
• Lockheed Martin (LMT)
• Sherwin-Williams (SHW)

After Close:

• Enphase Energy (ENPH)
• Baker Hughes (BKR)
• Seagate Technology (STX)
• Texas Instruments (TXN)

Wednesday

Before Open:

• Boeing (BA)
• AT&T (T)
• Coca-Cola (KO)
• Thermo Fisher Scientific (TMO)
• CME Group (CME)
• Boston Scientific (BSX)
• General Dynamics (GD)

After Close:

• Tesla (TSLA)
• Lam Research (LRCX)
• IBM (IBM)
• ServiceNow (NOW)
• Viking Therapeutics (VKTX)
• T-Mobile (TMUS)
• Sands (LVS)

Thursday

Before Open:

• American Airlines (AAL)
• UPS (UPS)
• Southwest Airlines (LUV)
• Nasdaq (NDAQ)
• Carrier (CARR)
• Tractor Supply Company (TSCO)

After Close:

• Dexcom (DXCM)
• Deckers Brands (DECK)
• Western Digital (WDC)
• Skechers (SKX)

Friday

Before Open:

• New York Community Bancorp (NYCB)
• Colgate-Palmolive (CL)
• Piper Sandler (PIPR)

The bigger names are still week or more away:

– Nvidia: November 14- Meta – October 30- Apple – October 31- Amazon – October 31- Alphabet/Google – October 29- Microsoft – October 30-

This article was written by Greg Michalowski at www.forexlive.com.

• The price stalled ahead of a topside trend line yesterday on the hourly chart (see chart above) . The inability to get to the level is a small negative.
• The price fell below an upward-sloping trend line on the hourly chart above near 149.61
• The price fell below the 100-hour MA at 149.61
• The price run-up to extend above the 150.00 level, but only extended to 150.313 before rotating back to the downside.
• The move higher fell short of the 50% midpoint of the move down from the July high at 150.757 (see daily chart below).
• It also fell short of its falling 100-day moving average just above that level on the daily chart (see chart below).

Those are little chinks in the bullish bias that may be a downward clue.

What has not happened that would increase the bears control at least in the short term?

• The swing high from August 15 comes in at 149.356. The price has tested that level, but has NOT broken below the level (see 4-hour chart below).

• The price has NOT broken below the rising 200-hour MA at 149.242 (and moving higher). The price has not traded below that MA since October 2 (see the green line on the hourly chart).

The little breaks and bearish nuances are good news for sellers looking for more downside, but there is more work to do.

Nevertheless, if the price can stay below the 100-hour moving average 149.610 (and broken trend line at the same level) , the sellers have some hope for the start of something more/some more downside probing in the new week.

Fundamentally, if the BOJ sees more global stability. If China starts to show signs of bottoming or if China continues to stimulate. If the BOJ hints of more hikes to come, there could be a reversal. Also if US growth starts to weaken from strength or the Fed continues to recalibrate, the USDJPY can also correct lower (or reverse back down).

This article was written by Greg Michalowski at www.forexlive.com.

Here is a reminder from two years ago what the other side of that trade looks like. In October 2022, the gilt market blew up and that led to the ouster of Liz Truss while the market puked to the lows of the year when US CPI rose to 8.2% y/y.

But the doom and gloom proved to be a buying signal as this article showed, published exactly two years ago.

What were we doing in October 2022. Here is what I wrote on the day of the exact bottom at 3505 as the selling began to reverse intraday, resulting in a 5% intraday move:

What I can tell you is that there’s no mystery headline behind it.

There’s
no easy answer to explain the market moves. One thing I would highlight
is that sentiment right now is as negative as it’s been since 2008.
There aren’t many bulls out there and people are feeling pain. The
liquidation trades in utilities and telecom show mom & pop puking
stocks, which is generally a sign of the bottom.

Along
the same lines, JPMorgan was talking about a 5% decline in stocks if
CPI was hot today. When serious people are talking about a 5% daily
fall, sentiment is awful.

So the best you could
say is that this is something of a short squeeze or those on the
sidelines with cash stepping in. The UK pension system also doesn’t seem to be imploding so the ‚Fed will hike until something breaks‘ crowd will have to move onto the next target.

Now it was tough to maintain conviction at the very bottom and few people were hammering the bid but the lesson going forward is that you want to look for horrible sentiment at the bottom and euphoria at the top.

Also if you go back two years, this was something I was repeatedly pointing to, when almost no one else was watching it.

The bad news is that euphoria is tougher to spot than capitulation and fear, it can also last longer. Still, I don’t think we’re there yet and here is the recent bullish indicator from the same AAII survey.

I think the fear-and-greed index is probably a better one for tops but I think it’s a good time to tune into sentiment and these kinds of things.

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

• Weekly update on interest rate expectations
• Gold Technical Analysis – Yet another all-time high
• USD/JPY lower on the day but buyers stay in control for now
• Japan’s largest union group Rengo targets wage hikes of at least 5% for next year
• BOJ governor Ueda remarks that Japanese economy is recovering moderately
• UK September retail sales +0.3% vs -0.3% m/m expected
• Eurozone August current account balance €31.5 billion vs €39.6 billion prior
• North Korean troops reportedly shipped to Russian bases for training and likely for combat

Markets:

• GBP leads, CHF lags on the day
• European equities higher; S&P 500 futures up 0.2%
• US 10-year yields up 1.2 bps to 4.108%
• Gold up 0.6% to $2,709.82
• WTI crude down 0.4% to $70.40
• Bitcoin up 0.6% to $67,809

It was another quiet session with some light market moves at best before we get into the final stretch of the week.

The dollar is slightly on the softer side but remains in prime position to try and build on the gains so far in October. EUR/USD is up slightly by 0.2% to 1.0850 while GBP/USD is up 0.3% to 1.3045 on the day. The latter was helped by stronger UK retail sales data as well, with the pair briefly touching a high of 1.3071 earlier.

Besides that, USD/JPY saw a quick whipsaw from 149.85 to 149.58 on the back of some BOJ headlines which reaffirmed that the central bank will stay sidelined in October. The pair was then quickly bought back up to keep around 150.00 now, down 0.1% on the day.

The antipodeans are also up slightly with Chinese stocks having rallied back alongside the yuan earlier in the day. A more positive risk mood is also helping, with European indices pulled higher alongside US futures during the session.

There weren’t any major headlines to guide markets, so this is all roughly a continuation of sentiment during the month. Take gold for example, as it runs up above $2,700 to fresh record highs once more.

The dollar might be down slightly but it doesn’t take away from the upside momentum in the weeks before, at least not yet.

Have a great weekend, everyone.

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

When put into context to the near-term chart below, the quick 30 pip drop earlier isn’t that meaningful. As our reader Alex pointed out, there were some headlines noting that the BOJ is said to see „little need to rush an October rate hike“ and that they are „mulling a change to their view on upside price risks“. But here’s a look at how things are playing out on the hourly chart for the pair:

Sellers did try to wrestle back some momentum earlier in the week but were thwarted in their attempts to push below 149.00. Since then, the 100-hour moving average (red line) has returned back to be a key near-term support level for the pair. And it looks to be doing the job again now amid the drop earlier.

Hold above and buyers will continue to keep a more bullish near-term bias. But break below and sellers will start to come back into the picture again. But just be wary that we are closing in on key resistance points as well the longer price action holds up here.

The 100-day moving average is seen at 150.81 currently and has already made a crossover back under the 200-day moving average as noted here at the time.

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

The bullish momentum in the
US Dollar seems to be waning as GBPUSD couldn’t print a new low despite another
set of strong US data. In fact, the US Retail Sales beat expectations across the board
by a big margin and the US Jobless Claims came out much better than expected.

One caveat is that the
market has now priced out the aggressive rate cuts expectations and it’s almost
perfectly in line with the Fed’s projections. Therefore, we will likely need stronger
US data and especially signs of a pickup in inflation to see the market pricing
in an earlier pause in the Fed’s easing cycle.

The next big risk events
will be in November when we get the October data, the FOMC policy decision and
the US election.

On the NZD side, the New
Zealand Q3 CPI this week missed expectations solidifying the market’s view
for another 50 bps cut at the upcoming meeting and even pricing 12% chance of a
75 bps move.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that NZDUSD is consolidating around 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 more clearly the rangebound price action as the bearish momentum waned. We
have the 0.61 handle acting as resistance here so a break above it will likely
see the buyers increase the bullish momentum into the 0.6217 resistance.

NZDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much more we can glean from this timeframe as the market participants will
likely keep on playing the range until we get a breakout. The red lines define
the average daily range for today.

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

Just a bit of a geopolitical update as it looks like North Korea is now getting involved with the war between Russia and Ukraine. It is being reported that North Korean troops have been shipped to Russian bases in the far east for training and adjustment. Following which, they will likely be subsequently „deployed for combat“.

Besides that, North Korea is also said to have sent artillery shells, anti-tank rockets and ballistic missiles to Russia.

Earlier in the day, Ukraine president Zelensky warned that North Korea will be sending „about 10,000 soldiers“ for the cause.

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

The bullish momentum in the
US Dollar seems to be waning as GBPUSD couldn’t print a new low despite another
set of strong US data. In fact, the US
Retail Sales beat expectations across the board by a big margin and the US
Jobless Claims came out much better than expected.

One caveat is that the
market has now priced out the aggressive rate cuts expectations and it’s almost
perfectly in line with the Fed’s projections. Therefore, we will likely need stronger
US data and especially signs of a pickup in inflation to see the market pricing
in an earlier pause in the Fed’s easing cycle.

The next big risk events
will be in November when we get the October data, the FOMC policy decision and
the US election.

On the GBP side, we got the
UK CPI report this week where the data missed
expectations across the board and prompted the market to expect another 25 bps
cut in December. This morning, we got strong UK
Retail Sales figures which boosted the GBP.

GBPUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that GBPUSD failed to break below the 1.30 handle and eventually bounced
higher despite strong US data. The buyers are stepping in around these levels
to position for a rally back into the 1.3265 level. The sellers will want to see
the price breaking lower to extend the drop into the major trendline.

GBPUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we got a nice spike upward this morning following the UK retail sales
data but got rejected from the downward trendline. The buyers will need the price
to break above the trendline to start targeting new highs, while the sellers
will likely continue to lean on it to position for new lows.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price is bouncing around a strong support zone around the 1.3035
level where we can find the confluence of the previous swing level and a minor
upward trendline.

The buyers will likely pile
in around these levels to target a break above the major downward trendline,
while the sellers will look for a break lower to increase the bearish bets into
the 1.29 handle. The red line define the average daily range for today.

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

• AUD/USD advance after jobs data held back by key technicals for now
• AUDUSD Technical Analysis – Breakout or fakeout?
• ECB the main event on the agenda in the session ahead
• China says have invited EU technical team over for next phase of EV negotiations
• US must have healthy relationship with China based on level playing field – Yellen
• Eurozone September final CPI +1.7% vs +1.8% y/y prelim
• Eurozone August trade balance €4.6 billion vs €21.2 billion prior
• Switzerland September trade balance CHF 4.95 billion vs CHF 4.58 billion prior

Markets:

• AUD leads, CAD lags on the day
• European equities higher; S&P 500 futures up 0.4%
• US 10-year yields up 1.8 bps to 4.033%
• Gold up 0.5% to $2,687.18
• WTI crude up 0.2% to $70.56
• Bitcoin down 1.0% to $66,912

It was a session bereft of any major headlines and market moves were relatively light as well overall.

In FX, the aussie largely held its gains from Asia Pacific trading following a hotter jobs report. AUD/USD was marked up to a high of 0.6710 then before keeping around 0.6680-90 in European morning trade. The pair is now up 0.5% to near 0.6700 with large option expiries and a couple of key technical levels in play.

Besides that, the action elsewhere among major currencies is relatively muted. The dollar remains steady, keeping in a decent spot after the gains in the past few weeks. EUR/USD is little changed at 1.0865 and USD/JPY flat at 149.60 currently.

In the equities space, European indices are nudging higher with French stocks bouncing back after the budget worries yesterday. UK stocks are also following up the gains from yesterday with the FTSE 100 seen up 0.4%. This comes with US futures also looking in a better mood, looking to scale back towards record highs again.

Elsewhere, gold is tracking higher again as it clips fresh record highs at $2,687 at the moment. The gold train marches on.

Coming up next, we have the ECB where a 25 bps rate cut is very much expected before we move on to US trading.

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