USD/CAD Price Analysis – Nov 05, 2024
Daily Price Outlook
During European trading hours on Tuesday, the USD/CAD currency pair continued its downward trend for the second consecutive session, hovering around 1.3880. However, the commodity-linked Canadian Dollar (CAD) is benefiting from steady oil prices as Canada is the largest oil exporter to the United States. Meanwhile, analysts expect the Bank of Canada (BoC) to implement a significant rate cut at its final monetary policy meeting of the year in December.
In contrast, the US Dollar is under pressure as the market anticipates the upcoming US elections. Hence, the USD/CAD pair is likely to weaken as the Canadian Dollar gains support from stable oil prices and anticipated rate cuts by the Bank of Canada, pressuring the US Dollar.
Therefore, the USD/CAD pair is likely to weaken as the CAD gains support from stable oil prices and anticipated rate cuts by the Bank of Canada. In contrast, the US Dollar faces downward pressure, further contributing to the pair's decline.
Impact of Oil Prices and Bank of Canada Decisions on USD/CAD Pair
As we mentioned, the Canadian Dollar is getting support from stable oil prices since Canada is the largest oil exporter to the United States. Currently, Oil prices are steady as traders remain cautious due to the uncertainties surrounding the results of the US presidential election taking place on Tuesday.
Looking ahead, the Bank of Canada (BoC) is expected to announce a significant rate cut at its final monetary policy meeting of the year in December. BoC Governor Tiff Macklem has hinted at the possibility of reducing rates by another 50 basis points (bps).
Traders will be closely watching Canada’s International Merchandise Trade data, which includes information on imports and exports, scheduled for release on Tuesday. Then, on Wednesday, the focus will shift to the BoC's Summary of Deliberations and the Ivey Purchasing Managers Index (PMI) data.
Therefore, the USD/CAD pair is likely to weaken as the Canadian Dollar gains strength from stable oil prices and anticipated rate cuts by the Bank of Canada. Meanwhile, uncertainty surrounding the US elections may put additional pressure on the US Dollar.
Impact of US Presidential Election Uncertainty on the USD/CAD Pair
On the US front, former President Donald Trump and Vice President Kamala Harris are both confident about their chances as they campaign across Pennsylvania on the last day of a very close presidential election. Current opinion polls show that Trump and Harris are almost tied, meaning the final winner may not be known for several days after the voting takes place on Tuesday.
As a result, the US Dollar is facing downward pressure despite the rising US Treasury yields. The yields on 2-year and 10-year US Treasury bonds are currently at 4.17% and 4.30%, respectively. T
Therefore, the uncertainty surrounding the US presidential election may exert downward pressure on the USD, potentially weakening the USD/CAD pair. However, stronger US Treasury yields could provide some support for the Dollar, mitigating losses against the Canadian Dollar amid stable oil prices.
USD/CAD – Technical Analysis
The USD/CAD pair is trading at $1.38862, down by 0.12% in the latest session, as it encounters downward pressure near key technical levels. Currently, the pair is testing a critical pivot at $1.39210, which defines its short-term direction.
The Relative Strength Index (RSI) stands at 36, edging towards the oversold zone, indicating that the bearish momentum may be close to exhaustion, though a further drop remains possible.
Immediate resistance is positioned at $1.39349, with further upside barriers at $1.39489. A push above these levels could shift sentiment to a more bullish outlook, targeting higher grounds. However, the 50-day Exponential Moving Average (EMA) at $1.39120 serves as a key point of overhead resistance, reinforcing a bearish bias below this level.
On the support side, the first major support lies at $1.38789, with additional safety nets at $1.38635 and $1.38447. Should USD/CAD break below the $1.38789 support level, it could accelerate selling pressure, possibly driving the pair lower.
For now, the market favors a bearish stance, with a recommended entry below $1.38931, targeting $1.38629 for profit-taking while setting a stop loss at $1.39140 to manage potential risks.
Overall, USD/CAD remains in a downtrend, with key levels to watch on both sides. A break below immediate support could further solidify the bearish trend, while any recovery above the 50 EMA may indicate a potential reversal.
GOLD Price Analysis – Nov 04, 2024
Daily Price Outlook
Gold prices (XAU/USD) have shown a rebound and trading near $2,740 level. However, this uptick is largely driven by increased uncertainty surrounding the upcoming U.S. presidential election and escalating tensions in the Middle East.
Investors are turning to gold as a reliable store of value. However, the announcement of election results is scheduled for this Tuesday, keeping market watchers on high alert.
Analysts at JPMorgan suggest that regardless of the election outcome, a potential drop in gold prices could present an attractive buying opportunity for those looking to capitalize on market fluctuations. This week is expected to be crucial for gold as investors navigate through the prevailing uncertainty.
Gold Prices Under Pressure Amid US Election Uncertainty and Economic Data
On the U.S. front, the ongoing uncertainty surrounding the presidential election and ongoing tensions in the Middle East are likely driving increased demand for gold as a safe-haven asset. Investors typically turn to gold during periods of uncertainty, and with the election approaching, this demand is anticipated to grow.
In recent economic news, the weaker US job growth has sparked hopes for a rate cut. However, the October Nonfarm Payrolls (NFP) data showed an increase of only 12,000 jobs, the smallest gain since December 2020.
This is a major drop from the revised September figure of 223,000 and falls far below the market expectation of 113,000. Meanwhile, the unemployment rate held steady at 4.1%, which matched forecasts. This weak job growth may lead to a 25 basis points (bps) cut in interest rates from the Federal Reserve at their meeting next Thursday.
Hence, the rising demand for the US dollar and increasing bond yields create pressure on gold prices as higher yields make gold less attractive compared to other investments.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,741.66, up 0.19% for the day, and currently sits just above a key pivot level at $2,738.29. The immediate resistance at $2,745.32 will be closely watched, as a break above could pave the way for further gains, with additional resistance targets at $2,753.70 and $2,760.76.
These levels align with the 50-day Exponential Moving Average (EMA) at $2,754.12, reinforcing the $2,753.70 mark as a crucial hurdle for any sustained bullish momentum.
On the downside, immediate support rests at $2,731.80, with subsequent layers at $2,724.64 and $2,717.20. Should gold dip below these levels, it may signal a shift to a more bearish outlook, particularly as the RSI stands at 43, indicating neutral territory but leaning towards bearishness in the short term.
With the broader trend influenced by ongoing geopolitical tensions and market expectations for a potential Fed rate cut, the $2,738.29 pivot level becomes even more critical. A sustained move above this pivot could attract additional buying interest, targeting $2,753. Meanwhile, a dip below could invite sellers, pushing gold toward the lower support levels.
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EUR/USD Price Analysis – Nov 04, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair extended its upward trend, maintaining strong support around 1.0903 and reaching an intra-day high of 1.0905. This bullish momentum is primarily fueled by a strong Euro currency, which has gained traction following positive Eurozone economic data that alleviated concerns about significant rate cuts by the European Central Bank (ECB) in December.
Moreover, the rise in the EUR/USD pair accelerated as the US Dollar weakened amidst growing uncertainty ahead of the upcoming US presidential election on Tuesday and the Federal Reserve's monetary policy meeting on Thursday.
Euro Strengthens as Positive Economic Data Reduces Rate Cut Expectations
As we mentioned the bullish trend in the Euro currency has been backed by positive recent economic data from the Eurozone, which reduced expectations of large interest rate cuts by the European Central Bank (ECB) in December.
On the data front, the Eurozone’s economy grew faster than expected in the third quarter, with Gross Domestic Product (GDP) performing better than forecasted. This stronger-than-expected growth has led traders to scale back their expectations for a major interest rate cut of 50 basis points in December.
Furthermore, October’s inflation rate increased to 2%, further challenging the need for a steep rate cut by the ECB. Moreover, manufacturing in both Germany and the Eurozone improved, as shown by the final October PMI (Purchasing Managers' Index) data. In the meantime, Sentix Investor Confidence, a key sentiment indicator, also showed slight improvement, moving from -13.8 in October to -12.8 in November, though it remains in negative territory.
Therefore, the positive economic data from the Eurozone, along with reduced expectations for significant rate cuts, is likely to strengthen the Euro (EUR) against the US Dollar (USD). This could lead to upward momentum for the EUR/USD currency pair.
US Dollar Weakens Amid Election Uncertainty, Boosting EUR/USD Pair
On the US front, the broad-based US dollar edged lower on the day as uncertainty grows ahead of the US presidential election on Tuesday and the Federal Reserve's (Fed) monetary policy meeting on Thursday.
The US Dollar Index (DXY) fell below 103.70 as market participants anticipated a close race between former President Donald Trump and current Vice President Kamala Harris. However, the recent poll showed Harris leading Trump by three points in Iowa, which is significant since Trump won the state easily in the past two elections.
Traders think that if Trump wins, it could boost the US dollar and Treasury yields. This is because he wants to raise tariffs and cut taxes, which could lead to higher inflation and prompt the Federal Reserve to tighten its monetary policy.
On the other hand, if Harris wins, it is seen as a continuation of current policies, which would benefit risk-sensitive currencies. Regarding the Fed's upcoming meeting, traders expect a rate cut of 25 basis points, bringing rates down to between 4.50% and 4.75%.
Investors are also looking forward to the release of the ISM Services Purchasing Managers’ Index (PMI) for October, which is projected to show slower growth than the previous month.
Therefore, the US dollar's decline, driven by election uncertainty and expectations of a rate cut, is likely to support the Euro (EUR) against the US dollar (USD), pushing the EUR/USD pair higher.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.08958, up 0.59% on the day, as it moves just below a key pivot level at $1.09022. This pivot is a critical indicator for the pair’s potential direction. Immediate resistance lies at $1.09128, followed by higher resistance levels at $1.09231 and $1.09316.
A break above these levels would suggest continued bullish momentum, supported by an RSI reading of 61, indicating that the pair is approaching overbought territory. However, if EUR/USD manages to surpass the 1.09128 resistance, it could attract further buying interest.
On the downside, immediate support is found at $1.08845, with additional support at $1.08695 and a more substantial base at $1.08578, just above the 50-day Exponential Moving Average (EMA) of $1.08677.
The 50 EMA serves as a strong support level and could stabilize the pair if selling pressure increases. Current market sentiment remains influenced by the Eurozone’s economic outlook and dollar movements, with investors watching closely for cues from both the European Central Bank and the U.S. Federal Reserve.
Traders should consider the pivot point at $1.09022 as the deciding factor; a break below may signal selling opportunities, targeting $1.08770. Conversely, a sustained move above $1.09128 could reinforce a bullish trend, with the potential to reach higher resistance levels.
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GBP/USD Price Analysis – Nov 04, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair maintained its upward trend and remained well-bid around the 1.2961 level and reaching an intraday high of 1.2999. However, the upward trend can be attributed to the US Dollar's strong decline ahead of the upcoming presidential election on Tuesday.
As a result, the Pound Sterling is gaining strength against the Dollar and other major currencies. Investors are also focused on the Bank of England’s monetary policy decision expected on Thursday, which could further impact the cable pair performance.
US Dollar Weakness and Its Impact on GBP/USD Exchange Rate
On the US front, the broad-based US dollar failed to sustain its bullish trend and turned bearish on Monday as the US Dollar Index (DXY) dropped to around 103.60, its lowest level in almost two weeks.
However, this decline was triggered by a recent poll from the Des Moines Register/Mediacom Iowa Poll, which showed Democratic candidate Kamala Harris gaining three points over former President Donald Trump in Iowa. Many national polls indicate a close race between the two candidates, creating uncertainty in the market.
Besides the election, investors are also looking to the Federal Reserve’s (Fed) policy announcement on Thursday. The Fed is expected to cut interest rates again, but this time by a smaller amount of 25 basis points, following a larger cut of 50 basis points in September. Investors will be particularly attentive to the Fed’s comments about future rate decisions, especially for the December meeting.
Therefore, the bearish trend of the US dollar could strengthen the GBP/USD pair as the Pound gains against a weakening Greenback. Meanwhile, uncertainty surrounding the election and potential Fed rate cuts may further support the Pound’s upward momentum against the Dollar.
Impact of Bank of England's Monetary Policy on GBP/USD Pair
On the GBP front, the upticks in the GBP/USD pair could be further boosted by the Bank of England's (BoE) monetary policy decision expected on Thursday. However, the BoE is anticipated to cut interest rates by 25 basis points, bringing them down to 4.75%.
Notably, Monetary Policy Committee (MPC) members are mostly in favor of a rate cut, with seven expected to support it, while two, including external member Catherine Mann, prefer maintaining rates at 5%.
Investors will closely watch BoE Governor Andrew Bailey’s press conference following the policy decision for insights into future actions, especially for December.
Moreover, UK Chancellor of the Exchequer recently announced £40 billion in new taxes, the highest since 1993, along with various investment projects aimed at boosting public spending. The Office for Business Responsibility (OBR) has also raised current-year inflation targets to 2.5% from the previous 2.2%.
Therefore, the anticipated rate cut by the Bank of England could strengthen the GBP/USD pair, as a lower interest rate may encourage investment in the Pound. However, the uncertainty around inflation targets and government policies could also create volatility in the exchange rate.
GBP/USD – Technical Analysis
The GBP/USD pair is trading at $1.29868, up 0.56% for the day, as it hovers around a key pivot level at $1.29954. This pivot point will be critical in determining the pair’s next move. Immediate resistance is positioned at $1.30108, followed by further resistance at $1.30262 and a higher target at $1.30431.
A break above these levels could indicate renewed bullish momentum, particularly if GBP/USD sustains above the 50-day Exponential Moving Average (EMA) of $1.29315. With the Relative Strength Index (RSI) reading at 64, the pair is close to overbought territory, signaling that the upside may be limited unless there’s a decisive move past the resistance zone.
On the downside, immediate support lies at $1.29674, with additional layers at $1.29473 and $1.29274. Should the pair drop below $1.29674, selling pressure could increase, pushing GBP/USD toward the 50 EMA, which acts as a significant support barrier.
Market sentiment is closely tied to ongoing dollar strength and investor sentiment around the Bank of England’s interest rate outlook, which could influence GBP demand.
For traders, a breach below the pivot at $1.29954 could trigger selling interest, targeting $1.29531. However, a sustained push above $1.30108 would shift the outlook to bullish, with $1.30431 as an upper target in the short term.
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EUR/USD Price Analysis – Nov 01, 2024
Daily Price Outlook
Despite the positive Eurozone data, the EUR/USD currency pair struggled to maintain its upward momentum, declining from a fresh two-week high to around 1.0855 on Friday. This downturn can be attributed to a rebound in the US Dollar, fueled by upbeat US economic data.
Meanwhile, investors seem cautious ahead of the upcoming US Nonfarm Payrolls (NFP) and the ISM Manufacturing Purchasing Managers’ Index (PMI) data for October, set to be released in the New York session.
Conversely, the shared currency has performed well against other currencies, bolstered by faster-than-expected Eurozone GDP growth in the third quarter and inflation data that exceeded forecasts. These developments have led traders to reassess expectations regarding larger-than-usual rate cuts by the European Central Bank (ECB) at its December policy meeting. This reassessment has been a key factor in limiting deeper losses for the EUR/USD pair.
EUR/USD Outlook Amid Eurozone Growth and US Dollar Recovery
On the EUR front, the shared currency maintains its bullish trend but failed to keep the EUR/USD pair above its two-week high and lost traction due to a recovery in the US Dollar.
However, the shared currency has shown strong performance against other currencies, supported by several factors including faster-than-expected Eurozone GDP growth of 0.9% in the third quarter and higher-than-expected inflation. This have led traders to rethink their expectations for larger rate cuts by the European Central Bank (ECB) in December.
According to Eurostat, the Eurozone economy grew faster than last quarter, mainly thanks to a strong showing from Germany. This growth reduces the chances of an immediate economic downturn, though uncertainty remains ahead of the upcoming US presidential election.
If former President Donald Trump wins against current Vice President Kamala Harris, Eurozone exports may be affected, as Trump has proposed a universal 10% tariff on all nations, except China, which would face even higher tariffs. Additionally, inflation in the Eurozone increased to 2% in October, up from 1.7% in September, further supporting the euro.
Therefore, the stronger euro from positive GDP growth and rising inflation supports the EUR/USD pair. However, the US Dollar's recovery and potential trade tariffs from a Trump presidency create uncertainty, limiting the euro's ability to maintain gains above the recent high.
Impact of US Economic Data on EUR/USD Pair
On the US front, the broad-based US Dollar regained its ground as investors showed caution ahead of the upcoming US Nonfarm Payrolls (NFP) and ISM Manufacturing Purchasing Managers’ Index (PMI) data for October. Economists expect the US economy to have added 113,000 jobs, significantly lower than the 254,000 increase seen in September.
In the meantime, the unemployment rate is predicted to remain steady at 4.1%. These employment figures are crucial since they could affect market expectations about the Federal Reserve's interest rate decisions.
Traders are largely pricing in a 25 basis point rate cut at the Fed’s next meeting on Thursday. However, the NFP data could impact the outlook for the December meeting. If payroll data is stronger than expected, it may reduce bets on rate cuts, while weaker numbers could boost them.
Investors are also focusing on Average Hourly Earnings data for October, which is expected to show a 0.3% month-on-month increase, slower than September’s 0.4%. Additionally, the ISM Manufacturing PMI is projected to rise slightly to 47.6, indicating ongoing contraction but at a slower pace.
Therefore, the US Dollar's recovery, coupled with weaker-than-expected job growth forecasts, puts downward pressure on the EUR/USD pair. If the Nonfarm Payrolls data is strong, it could strengthen the Dollar further, leading to additional declines in the EUR/USD pair.
EUR/USD – Technical Analysis
EUR/USD is experiencing slight downward pressure, currently trading at $1.08743, a modest 0.08% decline. The pair hovers around the pivot point of $1.08881, which serves as a key indicator for short-term direction.
Immediate resistance is seen at $1.08992, and should this level be breached, the next resistance targets lie at $1.09105. A sustained break above these levels would likely signal stronger bullish momentum, potentially propelling EUR/USD further up.
Conversely, if the pair fails to rise above $1.08881, it could dip towards immediate support at $1.08611. Further downside targets include $1.08456 and $1.08315, where buying interest might emerge.
The RSI is currently at 54, suggesting a balanced momentum with no strong bias in either direction. Meanwhile, the 50-day EMA sits at $1.08580, providing additional support in the event of further declines.
Given the technical landscape, a tactical entry above $1.08701 could offer potential gains, targeting $1.08988 with a conservative stop loss at $1.08518. This setup offers an opportunity to capture gains if the euro stabilizes and tests higher levels.
This technical outlook suggests a cautiously bullish approach for EUR/USD, with close attention to the pivot point at $1.08881 as the key level that may determine near-term direction.
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GOLD Price Analysis – Nov 01, 2024
Daily Price Outlook
Gold price (XAU/USD) extended its bullish rally and drew some further bid around $2,757 level on Friday. However, the ongoing uncertainties surrounding the US presidential election and long-lasting tussle in the Middle East have played a major role in underpinning gold prices.
This is because gold is seen as a safe-haven asset, meaning investors turn to it during times of uncertainty and instability to protect their wealth.
Although, the upticks in the gold could be limited as the rising US Treasury bond yields and a stronger US Dollar put downward pressure on gold prices.
Moving ahead, traders are now looking ahead to the US employment report for October, which will be released on Friday. This report includes key figures like Nonfarm Payrolls (NFP), the Unemployment Rate, and Average Hourly Earnings.
US Dollar Faces Downward Pressure Amid Inflation Data and Rate Cut Expectations
On the US front, the broad-based US dollar failed to sustain its upward trend and face mild downward pressure following recent inflation data. The Personal Consumption Expenditure Price Index (PCE), a key measure of inflation, rose by 2.1% year-on-year in September, slightly lower than August's 2.2%.
This result matched what many experts expected. Meanwhile, the core PCE, which excludes food and energy prices, increased by 2.7%, the same as the previous month and higher than the anticipated 2.6%.
As a result, the expectation that the Federal Reserve might lower interest rates by 25 basis points in the upcoming November and December meetings could further weaken the dollar, as lower rates typically make a currency less attractive to investors seeking returns.
Investors are now looking ahead to the Nonfarm Payrolls (NFP) report, which will provide more insight into the job market. The report, set to be released on Friday, is expected to show that the US economy added 113,000 jobs in October, with the unemployment rate likely holding steady at 4.1%.
If job additions fall short of expectations, it could reinforce concerns about the economy and lead to an even weaker dollar. This situation could bolster gold prices, as many investors view gold as a safe haven during times of economic uncertainty.
Gold Gains Momentum Amid US Election Uncertainties and Middle East Tensions
The safe-haven yellow metal has been gaining momentum as the uncertainties surrounding the US presidential election and ongoing tensions in the Middle East forced Investors to turn to gold because it is seen as a safe investment.
As per the latest report, Israel is currently on high alert for a possible response from Iran, which may react to Israel's recent attacks before the US presidential election.
Meanwhile, US officials are visiting the Middle East to stop any retaliation from Iran and to find ways to solve the ongoing problems in Lebanon and Gaza.
However, they are not sure if these efforts will result in a break from fighting before the election. In Lebanon, there are hopes for a ceasefire between Israel and Hezbollah, but fighting is still happening.
However, the Israeli military recently attacked areas in Beirut after Hezbollah fired rockets that killed seven people in Israel, including four workers from Thailand. In Gaza, Israeli recent airstrikes have caused at least 13 deaths and many injuries, worsening the situation in the region.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) continues its cautious ascent, currently trading around $2,755.03, as it inches closer to the immediate resistance at $2,760.76. This level, marked by a convergence of previous highs and the 50-day EMA at $2,770.84, serves as a pivotal zone.
A sustained break above this point could push gold toward the next resistance at $2,767.44, followed by a potential test of $2,777.25, reflecting strengthened bullish momentum. However, if gold fails to clear $2,760.76, it may signal consolidation or a mild retracement.
On the downside, immediate support is found at $2,745.14, near recent consolidation lows. Should selling pressure increase, further support awaits at $2,731.38, with a deeper floor at $2,719.66, where buyers may re-emerge.
The RSI currently sits at 48, suggesting neutral momentum but tilting slightly toward oversold, which could attract short-term buyers if support levels hold.
Overall, the market tone remains cautiously bullish, as gold's resilience near $2,753.75—a key pivot point—indicates underlying demand. However, gold’s upward potential hinges on its ability to break through the 50-day EMA resistance.
Gold’s path forward will likely hinge on broader market sentiment and its ability to clear key resistance at $2,760.76, a test that could set the tone for the week.
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S&P500 (SPX) Price Analysis – Nov 01, 2024
Daily Price Outlook
The global market sentiment has turned bearish, as evidenced by the S&P 500's sharp decline to 5,702.45, down 1.86%. This marks its largest one-day drop since September 3. In addition to this, Nasdaq Composite also faced losses, falling 2.76% to close at 18,095.15.
However, this downturn can be attributed to disappointing earnings reports from major tech companies like Microsoft and Meta Platforms. Apart from this, the ongoing uncertainty surrounding the upcoming U.S. Presidential election has further impacted market confidence and contributed to the losses.
Geopolitical Uncertainty and Market Volatility Impacting S&P 500 Performance
On the geopolitical front, Investors are increasingly concerned about rising tensions, especially with Israel on high alert for a possible Iranian response following its recent attacks.
Meanwhile, U.S. officials are visiting the Middle East to stop Iran from retaliating and to address problems in Lebanon and Gaza, but there is doubt about whether these efforts will ease tensions before the election. These geopolitical tensions are weighing heavily on market sentiment, leading to increased volatility and declines in major indexes like the S&P 500.
Economic Uncertainty and Mixed Data Weigh on S&P 500 Performance
The S&P 500 has shown bearish performance, influenced also by the recent release of Personal Consumption Expenditures (PCE) data on Thursday. Meanwhile, the market remains cautious ahead of the upcoming U.S. presidential election, which is adding to the uncertainty.
Traders are now waiting for the Nonfarm Payrolls (NFP) report set to be released on Friday, with expectations that the U.S. economy added 113,000 jobs in October and the unemployment rate will hold steady at 4.1%.
On the data front, the PCE Price Index indicated a year-over-year rise in core inflation of 2.7% in September, which may keep investors on edge. Furthermore, Initial Jobless Claims dropped to a five-month low of 216,000, signaling a resilient labor market.
However, this mixed data does little to boost market confidence, especially with the U.S. GDP growing at an annualized rate of 2.8% in Q3, falling short of the 3.0% growth anticipated.
Meanwhile, the ADP Employment Change report showed a robust addition of 233,000 jobs in October, the decline in JOLTS Job Openings to 7.443 million in September, below expectations, adds to the negative sentiment impacting the S&P 500.
As a result, the S&P 500 index is feeling the heat from economic uncertainty, mixed signals in the labor market, and ongoing inflation worries. This has left investors feeling cautious as they look ahead to important economic reports and the upcoming presidential election.
S&P 500 – Technical Analysis
The S&P 500 (SPX) has seen a notable decline, currently trading around 5,705.44, down 1.86% as bearish momentum persists. The index faces strong resistance near 5,765.05, a key pivot point aligning with recent highs.
Should the S&P 500 manage to break above this level, it could target the next resistance at 5,798.37, with an upper threshold near 5,825.90. However, with the 50-day EMA positioned at 5,809.62 and downward pressure evident, the index may struggle to regain bullish traction in the near term.
On the support side, immediate support rests at 5,696.93, with further support levels at 5,675.11 and 5,649.97. The RSI has dipped to a low 21, signaling oversold conditions that could potentially attract short-term buying interest. Yet, the overall technical setup remains weak, as the index struggles below the 50-day EMA, reflecting a bearish bias.
For traders looking to capitalize on this trend, an entry below 5,730 could provide a viable short position, with profit-taking opportunities around 5,675, and a stop loss set at 5,764 to manage risk. As market sentiment remains fragile, further downside appears likely unless key resistance levels are breached.
Given these conditions, the S&P 500’s outlook remains tilted to the downside, with a strong test of support likely in the days ahead.
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AUD/USD Price Analysis – Oct 31, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair stopped its sluggish trend, gaining positive traction around the 0.6580 level. This bullish movement came as the US dollar turned bearish, with the US Dollar Index (DXY), which tracks the dollar's value against six major currencies, slipping slightly below 104.00.
Traders are now focused on the upcoming United States Nonfarm Payrolls (NFP) data for October, as it’s expected to shape market expectations for the Federal Reserve's interest rate decisions in the months ahead.
On the AUD side, the slower-than-expected inflation growth in Australia has dampened market expectations for a rate hike by the Reserve Bank of Australia (RBA), negatively impacting the Australian dollar (AUD) as investors seek higher-yielding currencies
Cautious US Market Sentiment and Its Impact on AUD/USD Pair
On the US side, market sentiment is cautious as investors adopt a risk-averse approach ahead of the presidential elections on November 5.
Recent national polls show a tight race between former President Donald Trump and current Vice President Kamala Harris, with many traders seemingly betting on a Trump victory.
If elected, Trump is expected to implement protectionist policies that could significantly impact the US's major trading partners.
Moreover, the US Dollar Index (DXY), which measures the dollar's strength against six major currencies, has dipped slightly below 104.00.
The upcoming Nonfarm Payrolls (NFP) report is projected to show an addition of only 115,000 jobs in October, a decrease from 254,000 in September, while the unemployment rate is expected to remain steady at 4.1%.
Investors are also keeping an eye on the US ISM Manufacturing PMI for October, which is anticipated to show a contraction but at a slower pace, moving from 47.2 in September to 47.6. These data points will likely influence market expectations for the Federal Reserve's interest rate decisions in the coming months.
Therefore, the cautious market sentiment and anticipated protectionist policies from a potential Trump presidency may weaken risk appetite, which could support the AUD/USD pair as a bearish US dollar makes Australian assets more appealing.
Meanwhile, disappointing US employment data may lead to a weaker dollar, further bolstering the AUD/USD exchange rate.
Impact of Slower Inflation on AUD/USD Pair
On the other side, inflation growth in Australia has been slower than anticipated in the third quarter, affecting market expectations for the Reserve Bank of Australia (RBA). As a result, traders now believe the RBA will maintain its Official Cash Rate (OCR) at current levels for a longer period.
Notably, the year-on-year Consumer Price Index (CPI) dropped significantly from 3.8% in the previous quarter to 2.8%, which was faster than analysts expected. In the meantime, the Annual Trimmed Mean CPI, which the RBA prefers to use as its inflation measure, increased by 3.5%, aligning with expectations.
Therefore, the slower-than-expected inflation growth in Australia may weaken the Australian dollar against the US dollar, as market expectations shift toward a prolonged period of stable interest rates from the RBA. This could create downward pressure on the AUD/USD pair.
AUD/USD – Technical Analysis
The AUD/USD pair is currently trading at $0.65676, down 0.06% on the day, as it remains under pressure below the pivot point at $0.66094.
The pair is struggling to gain traction amidst broader market sentiment favoring the U.S. dollar. With an RSI of 42, AUD/USD appears to be in a modestly bearish phase, indicating potential for further downside if selling momentum persists.
Immediate resistance for the pair stands at $0.65849, followed by more significant resistance levels at $0.66449 and $0.66873. A breakout above these levels would need strong buying interest, which is unlikely without supportive economic data or a shift in market sentiment.
On the downside, immediate support is located at $0.65420, with subsequent levels at $0.65092 and $0.64730. Notably, the 50-day Exponential Moving Average (EMA) is positioned at $0.66234, acting as a key barrier above the current price.
This EMA level reinforces the bearish outlook, as a sustained move below it could signal continued downside momentum.
For traders, a break below the entry price of $0.65857 could present a selling opportunity, targeting $0.65413 with a stop loss at $0.66106.
The current technical landscape suggests AUD/USD may continue its slide unless it manages to reclaim the $0.66094 pivot level, where a bullish reversal would become more likely. Traders should watch for any decisive moves below $0.65857, as it could validate further downside.
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- GOLD Price Analysis – Oct 31, 2024
GOLD Price Analysis – Oct 31, 2024
Daily Price Outlook
Gold prices (XAU/USD) are experiencing slight pressure around the $2,780 mark in early European trading. This is primarily due to rising US Treasury bond yields. Additionally, there are growing expectations that the Federal Reserve may not ease interest rates as aggressively, further weighing on gold prices.
However, the decline appears limited as uncertainties surrounding the upcoming US presidential election and ongoing tensions in the Middle East continue to bolster gold's appeal as a safe haven.
Moreover, the softer tone in global stock markets is giving a slight boost to gold as cautious investors lean toward safe assets. Many traders seem to be waiting on the sidelines ahead of key US data releases, like the Personal Consumption Expenditure (PCE) Price Index and Friday’s Nonfarm Payrolls (NFP) report.
These reports are expected to offer clues about the Fed's next moves on interest rates, which could provide fresh direction for XAU/USD.
Impact of Rising Treasury Yields and Strong Economic Data on Gold Prices
On the US front, the broad-based US dollar remains bullish, fueled by a further rise in US Treasury bond yields. This uptick is partly driven by expectations that the Federal Reserve may ease interest rates less aggressively, adding downward pressure on gold prices.
However, the latest report from Automatic Data Processing (ADP) on Wednesday showed that private sector employers added 233,000 jobs in October, up from a revised 159,000 in September and beating forecasts.
This points to a strong job market, and together with other positive US economic data, it reinforces the view that the Fed may hold off on cutting rates quickly.
The US Bureau of Economic Analysis also reported that the economy grew at an annualized rate of 2.8% in the third quarter, slower than the 3% growth seen from April to June. The markets are currently expecting a 25 basis points interest rate cut from the Fed in November.
However, concerns about government spending after the US elections are pushing bond yields higher, with the 10-year US government bond yield hovering just below 4.3%, close to its highest level since July. This increase in yields boosts demand for the US Dollar, which is a bearish for gold prices.
Therefore, the rise in US Treasury bond yields and strong economic data are creating downward pressure on gold prices, as higher yields increase demand for the US Dollar, making gold less attractive. This trend may continue with upcoming economic data releases.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is currently trading at $2,784.29, down 0.11% on the day, as it hovers near a critical pivot point at $2,789.81. The precious metal is testing support levels after encountering strong resistance at $2,798.12, a zone that remains a significant barrier to any immediate upside.
Technical indicators suggest a cautious sentiment, with the Relative Strength Index (RSI) sitting at 69—just below overbought territory, signaling potential consolidation or mild correction if buying pressure weakens.
Above the pivot, gold faces resistance at $2,805.15 and $2,812.45. A breakout above these levels could renew bullish momentum, pushing prices higher if market conditions support risk-off sentiment. However, the presence of the 50-day Exponential Moving Average (EMA) at $2,745 indicates a strong underlying support level, likely to provide a floor for any downward movement.
On the downside, immediate support rests at $2,779.33, followed by more robust levels at $2,773.08 and $2,767.84. A sustained break below these supports could open the door to further declines, targeting the 50 EMA around $2,745, which could serve as a pivotal level for any significant trend shifts.
The current setup suggests a potential selling opportunity if gold fails to hold above $2,789, with a target at $2,773. However, caution is advised, as a recovery above $2,798 would invalidate this outlook and hint at renewed bullish momentum.
This balanced technical landscape calls for close monitoring of the $2,789 pivot, which will likely shape gold's short-term trajectory.
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- USD/JPY Price Analysis – Oct 31, 2024
USD/JPY Price Analysis – Oct 31, 2024
Daily Price Outlook
During the European trading session, the USD/JPY currency pair extended its pullback, trading around the 151.80 level as the Japanese yen gained strength.
This decline follows comments from Bank of Japan (BoJ) Governor Kazuo Ueda, who suggested a potential interest rate hike "if conditions are met."
Although the BoJ kept its benchmark interest rate at 0.25% as expected, Ueda emphasized the Bank's commitment to normalizing its monetary policy. In response to this announcement, the yen appreciated against other currencies, exerting downward pressure on the USD/JPY exchange rate.
Market participants are now turning their attention to upcoming US economic data, especially the release of the Personal Consumption Expenditures (PCE) Prices Index, which is anticipated to reflect ongoing easing of inflation toward the Federal Reserve's 2% target.
Meanwhile, traders are eagerly awaiting Friday's Nonfarm Payrolls (NFP) report, with market consensus indicating a notable decline in job additions. However, strong ADP figures have raised expectations, adding an element of uncertainty to the jobs outlook.
Cautious US Market Sentiment and Economic Data Impact on USD/JPY Outlook
On the US side, the market sentiment remains cautious as investors turned worried amid upcoming data releases. The US Dollar Index (DXY), which measures the dollar's strength against six major currencies, has dipped slightly below 104.00.
Meanwhile, the upcoming Nonfarm Payrolls (NFP) report is projected to show an addition of only 115,000 jobs in October, a decrease from 254,000 in September, while the unemployment rate is expected to remain steady at 4.1%.
Investors are also keeping an eye on the US ISM Manufacturing PMI for October, which is anticipated to show a contraction but at a slower pace, moving from 47.2 in September to 47.6. These data points will likely influence market expectations for the Federal Reserve's interest rate decisions in the coming months.
Therefore, the cautious market sentiment and weaker job growth expectations may lead to a bearish outlook for the USD/JPY pair. However, the slowdown in the NFP and ISM Manufacturing PMI could prompt investors to adjust their positions, affecting the dollar's strength against the yen.
USD/JPY – Technical Analysis
USD/JPY is trading at 152.90, down 0.34% today, indicating a moderate bearish trend as the pair nears critical support levels. The pivot point is situated at 153.26, aligning closely with the 50-day Exponential Moving Average (EMA), which serves as a key resistance.
This confluence suggests that USD/JPY might encounter difficulty moving higher unless market sentiment strongly favors the dollar.
Immediate resistance is noted at 153.05, with subsequent levels at 153.58 and 153.87, potentially capping any recovery efforts. On the downside, immediate support is found at 152.74, followed by deeper levels at 152.50 and 152.28.
A break below these supports could escalate selling pressure, possibly leading to further declines.
The Relative Strength Index (RSI) stands at 40, reflecting subdued momentum. While not in oversold territory, this level implies that selling interest may persist if the pair fails to reclaim the pivot point.
Traders might consider short positions below 153.03, with a target at 152.52 and a stop at 153.42, capitalizing on the prevailing bearish outlook.
Overall, USD/JPY remains pressured below 153.26, supporting a bearish view unless a breakout above this level occurs.
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