• Prior -5.1%
• Market index 230.2 vs 277.5 prior
• Purchase index 138.4 vs 149.2 prior
• Refinance index 734.6 vs 997.3 prior
• 30-year mortgage rate 6.52% vs 6.36% prior

Amid a jump in rates, mortgage applications dropped hard in the past week with both purchase and refinancing activity slumping hard. The latter in particular fell by 26% to its softest number since the first week of August. A sign of a false dawn for the US housing market in after the brief recovery in recent weeks?

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

The bullish momentum in the
US Dollar seems to be waning despite the recent higher-than-expected US CPI and PPI reports. 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 more strong US data to see the market pricing in an earlier pause in the
Fed’s easing cycle and give the US Dollar a further boost. 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 AUD side, the RBA
continues to maintain its hawkish stance although that was toned down a bit in
the last meeting. Tomorrow, we get the Australian labour market report but unless
we get big deviations from the expectations, it’s unlikely to influence the
current pricing.

AUDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that AUDUSD continues to drop although the momentum slowed down. The target
for the sellers should be the 0.6622 level. 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 0.68 handle.

AUDUSD 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 it 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.

AUDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the recent price action with the trendline acting as a strong
barrier. We have now a strong resistance around the 0.67 handle that the buyers
will need to break to start targeting new highs, while the sellers will look
for a rejection to pile in for new lows. The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow we have the Australian Labour Market report, the US Retail Sales and
the US Jobless Claims data.

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

The bullish momentum in the
US Dollar seems to be waning despite the recent higher-than-expected US CPI and PPI reports. 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 more strong US data to see the market pricing in an earlier pause in the
Fed’s easing cycle and give the US Dollar a further boost. 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 morning and the data missed expectations across the board
by a big margin. That prompted the market to expect another 25 bps cut in
December.

GBPUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that GBPUSD is bouncing once again from the 1.30 handle after the quick
drop following the UK CPI report. The buyers are stepping in around these
levels to position for a rally back into the 1.32 handle. The sellers, on the
other hand, will want to see the price breaking lower to increase the bearish
bets into the major trendline.

GBPUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the bounce on the 1.30 handle as the buyers continue to pile
in for a move back into the top of the recent range at 1.31. The market
participants will likely keep on playing the range until we get a breakout on
either side.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price reached the bottom of the average daily range for today, so it’s unlikely that we
will see much lower prices today. It’s all about waiting for the breakout of
the range now.

Upcoming
Catalysts

Tomorrow we have the US Retail Sales and the US Jobless Claims data, while on
Friday we get the UK Retail Sales figures.

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

The pound is lower owing to the softer UK CPI report earlier here. That rebuffed BOE rate cut expectations for next month, which were already high to begin with. Traders saw ~80% odds of a 25 bps rate cut for November and bolstered that to ~91% now. GBP/USD fell from around 1.3070 to a low of 1.2983 before keeping just above 1.3000 currently.

The figure level is the key line in the sand to watch on the daily chart, with the technical backdrop outlined here.

There’s not much else as the dollar continues to keep steadier and consolidate gains since the start of the month. EUR/USD remains just under 1.0900 while USD/JPY is lightly changed at 149.20 after a brief dip under 149.00 in Asia.

Besides that, AUD/USD remains one to watch as it is flirting with a key technical support level as noted here.

Looking to the equities space, UK stocks are buoyed by the softer inflation numbers but European indices are all lower with declines led by France. Budget worries are weighing on French stocks but they have trimmed declines from over 1% to around 0.4% now.

In the bond market, 10-year Treasury yields are nudging back lower towards the 4% mark and that is something to be mindful of in case yields do turn lower still. In that lieu, gold is being driven higher to $2,680 now as it closes in on fresh record highs last month near $2,685.

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

• China to hold press conference on promoting steady and healthy development of property sector on October 17 at 10 am Beijing time.

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

• Equities keep more tentative so far in the new day
• Eurozone August industrial production +1.8% vs +1.7% m/m expected
• Germany October ZEW survey current conditions -86.9 vs -84.5 expected
• USD/JPY wrestles with near-term support after nearing 150.00 yesterday
• IEA cuts 2024 oil demand growth forecast amid China drag
• China economy set to miss growth target in 2024 – poll
• Chinese stocks continue down the bumpy stretch of road in the new week
• European equities mostly a touch higher to start the day
• Spain September final CPI +1.5% vs +1.5% y/y prelim
• France September final CPI +1.1% vs +1.2% y/y prelim
• What are the main events for today?
• Eurostoxx futures +0.1% in early European trading
• UK August ILO unemployment rate 4.0% vs 4.1% expected
• Germany September wholesale price index -0.3% vs -0.8% m/m prior
• FX option expiries for 15 October 10am New York cut
• UK labour market report on the agenda in the session ahead
• BOJ seen keeping interest rates unchanged through year-end – poll
• China banks reportedly set to trim rates on ¥300 trillion of deposits as soon as this week
• Dollar keeps steadier as the week looks to pick up
• Japan PM says aims to for a supplementary budget higher than last years amount

The main event in the European session today was the release of the UK labour market report. The data beat expectations and after some tentative price action, led to a rally in the pound.

We also got the German ZEW which came out on the softer side but the expectations index improved. That didn’t help the euro though as it continues to trade tentatively into the ECB decision on Thursday.

In the markets, the most notable mover has been crude oil as it extended the fall triggered by late yesterday’s news of Israel limiting the counterstrike to military targets.

In FX, we continue to see tight ranges although the bullish momentum in the US Dollar looks to be exhausted as the market might need more to price in a more „hawkish“ path for interest rates than the current Fed’s projections.

In the equity space, the S&P 500 and the Nasdaq are consolidating around yesterday’s highs. We haven’t got any bearish catalyst in the meantime, so the current uptrend will likely remain intact.

In the American session, the main event will be the release of the Canadian CPI. The market
is pricing in a 48% probability of a 50 bps cut at the upcoming meeting. Soft data will likely seal the 50 bps cut,
while higher than expected figures might trigger a relief rally in the CAD.

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

The bullish momentum in the
US Dollar seems to be waning despite the recent higher-than-expected US CPI and PPI reports. 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 more strong US data to see the market pricing in an earlier pause in the
Fed’s easing cycle and give the US Dollar a further boost.

In the bigger picture, it
looks like the US long term yields are bound to rise further, which should keep
the recent uptrend in the USD intact, but more bullish catalysts for the
greenback would give more conviction for the buyers.

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

On the NZD side, the RBNZ recently
cut interest rates by 50 bps as expected. The market
is pricing an 88% 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 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. Watch out for the New
Zealand CPI later in the day. The red lines define the average daily range for today.

Upcoming
Catalysts

This week is pretty empty on the data front with just a couple of key economic
releases. Today, we get the New Zealand Q3 CPI report. On Thursday, we have the
US Retail Sales and US Jobless Claims data.

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

The bullish momentum in the
US Dollar seems to be waning despite the recent higher-than-expected US CPI and PPI reports. 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 more strong US data to see the market pricing in an earlier pause in the
Fed’s easing cycle and give the US Dollar a further boost.

In the bigger picture, it
looks like the US long term yields are bound to rise further, which should keep
the recent uptrend in the USD intact, but more bullish catalysts for the
greenback would give more conviction for the buyers.

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

On the CAD side, the market
is pricing in a 48% probability of a 50 bps cut at the upcoming meeting. Today,
we get the Canadian CPI report where soft data will likely seal the 50 bps cut,
while higher than expected figures might trigger a relief rally in the CAD.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD is now trading above the key resistance around the 1.3785 level. The
sellers will want to see the price falling back below the level to position for
a drop into the 1.36 support. The buyers, on the other hand, will likely keep
on piling in around these levels to position for further upside into the 1.3860
level.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we had a huge rally the lows with basically no pullback. We have a
steep 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 pile in
for a drop into the 1.36 support.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the recent price action and the steep trendline. There’s not
much else to see here as the buyers will keep on leaning on the trendline,
while the sellers will look for a break. Watch out for today’s Canadian CPI as higher
than expected data might trigger a relief rally in the CAD. The red lines
define the average daily range for today.

Upcoming
Catalysts

This week is pretty empty on the data front with just a couple of key economic
releases. Today, we get the Canadian CPI report. On Thursday, we have the US
Retail Sales and US Jobless Claims data.

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

Here’s a snapshot of things at the moment:

• S&P 500 futures flat
• Nasdaq futures -0.1%
• Dow futures +0.2%
• Eurostoxx -0.4%
• Germany DAX +0.2%
• France CAC 40 -0.7%
• UK FTSE -0.4%

In Europe, the overall mood is more mixed with only the DAX looking to push up. The German index briefly touched record highs earlier as investors eye another ECB rate cut later in the week.

As for US futures, things should only start moving when we get to North America trading later. There won’t be any major events on the economic calendar but do watch out for Fed speak. Let’s see if there will be appetite to keep the run higher going as the outlook for the US economy hones in on a soft landing scenario.

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

• Heads up: It is a partial market holiday in the US
• Weekly update on interest rate expectations
• Chinese equities look to hold on to hope for now at least
• Switzerland September producer and import prices -0.1% vs +0.2% m/m prior
• SNB total sight deposits w.e. 11 October CHF 467.1 bn vs CHF 471.4 bn prior
• China records ¥582.62 billion trade surplus in September
• China September M2 money supply +6.8% vs +6.4% y/y expected
• OPEC slashes global oil demand growth forecast for third month in a row

Markets:

• USD leads, CHF lags on the day
• European equities higher; S&P 500 futures up 0.1%
• Gold down 0.1% to $2,654.73
• WTI crude down 2.4% to $73.74
• Bitcoin up 3.2% to $64,867

It was a quiet session as markets are marred by holidays in major markets. In Asia, Japan was out and looking to the session ahead, the US – partially – and Canada will be too.

That kept trading sentiment in a bit of a bind but in the last hour or so, we are seeing the dollar catch a light bid.

EUR/USD is down 0.2% to 1.0915 with USD/JPY up 0.4% to 149.70 on the day. The latter is trading to its highest levels since the start of August, as the dollar continues to keep on steadier footing since the start of the month.

The Swiss franc is the laggard on the day, with USD/CHF up 0.6% to 0.8625 and EUR/CHF up 0.4% to 0.9415. Is the SNB at work amid quiet markets?

Meanwhile, the antipodeans are also lagging slightly as the Chinese yuan is punished after a lack of stimulus details from a much anticipated press conference in China. AUD/USD is down 0.5% to 0.6715, keeping near the lows for the day currently.

In the equities space, European indices are a little higher with US futures also up slightly ahead of holiday thin trading in Wall Street later.

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