Wall Street indexes are experiencing volatility due to geopolitical tensions and anticipation of Nvidia’s Q3 earnings report. The release of Nvidia’s Blackwell chip is a major highlight, with potential implications for the AI and computing sectors. The performance of Nvidia’s stock could significantly impact the broader market, including the S&P 500 and Nasdaq indexes. Most Read: GBP/USD, GBP/JPY Price Action Ideas Post UK Inflation Release The major Wall Street indexes have struggled today thanks to a rise in geopolitical tensions between Russia and Ukraine and the Nvidia earnings release. The S&P 500 and Nasdaq 100 are trading down 0.64% and 0.93% respectively. Wall Street’s “fear gauge” .VIX jumped to 18.79 before easing slightly, but it was still trading at its highest since the Nov. 5 U.S. presidential election. NVIDIA Earnings Preview: What to Expect Nvidia earnings will be released in a short while and remains a key event with some analysts referring to the release as the most important economic event of the quarter. Markets remain concerned about lofty AI valuations despite positive earnings releases from the rest of the ‘magnificent 7’. Investors are cautious about NVIDIA’s Q3 2024 earnings despite the company’s strong recent performance. Analysts think NVIDIA will earn between $33 billion and $34.3 billion, which is about 81% to 82% more than last year. They also expect earnings per share to be between $0.75 and $0.79, up 85% from the previous year. Source: CarbonFinance (click to enlarge) A major highlight this quarter is NVIDIA’s new Blackwell chip. Wall Street is paying a lot of attention to it, seeing it as a big deal for artificial intelligence and computing. This chip might help NVIDIA grow even more and keep its lead in the market. Along with this market participants will be keeping a close eye on inventory levels as the tug of war between supply and demand remains key moving forward. As seen with other magnificent 7 stocks, forward guidance will prove just as important, with any sign of a potential slowdown being expected or concerns around the impact of a trade war and markets could be spooked which could negatively affect NVIDIA and by extension both the S&P 500 and Nasdaq 100.  The broader impact of NVIDIA earnings should not be understated given the performance after the last 3 earnings reports. In February, the stock gained +43%, June 46% with a -21% being recorded in August. This has also led to wild swings for the SPX and Nasdaq as well.  Investors are watching closely to see if NVIDIA can do better than what analysts expect and keep growing and innovating. Positive or negative the results are likely to have a massive impact on Wall Street Indexes.  Technical Analysis  Nasdaq 100 The Nasdaq 100 has struggled following the initial Trump election rally which propelled the index beyond the 21000 handle. Despite the 700+ point selloff since the post election high, the overall bullish trend remains intact. On the daily chart below, only a daily candle close below the swing low just below the 20000 handle would lead to a change in structure. Until then the bullish trend remains in play with the long term descending tredline also resting lower down close to the 19800 handle. We also have the 100-day MA which rests around the 19786 handle and could come into play as well should we get an extended selloff. Looking at the upside and immediate resistance rests at 20790 before the 21000 comes into focus. Beyond that we have the recent highs at 21250 which provide the next hurdle. Immediate resistance rests at 20484 before the all-time highs around 20790 come into focus.  Nasdaq 100 Daily Chart, November 20, 2024 Source: TradingView (click to enlarge)  Support 20000 19786 19123 Resistance 20790 21250 (all-time highs) 21500 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The euro is down sharply on Wednesday. In the North American session, EUR/USD is trading at 1.0510, down 0.80% on the day at the time of writing. ECB Financial Stability Review warns of debt crisis Financial stability reviews seldom make the headlines, unless the message is a stark one. That was the case today as the ECB’s financial stability review warned that the eurozone could face a financial crisis due to a variety of issues. The euro has responded to the pessimistic news with sharp losses. The report noted weak growth, rising public debt and political uncertainty in the eurozone could lead to an economic downturn that would squeeze banks and hurt financial stability. The ECB also warned of the possibility of a potential bubble in stocks connected to AI, which could result in a sharp market correction. The report urged fiscal prudence in order to preserve financial system resilience in the “current uncertain macro-financial environment”. The European Central Bank meets on Dec. 12 and there are differing opinions among Governing Council members as to the timing of another rate cut. Inflation has been falling, but it the pace fast enough to warrant a rate cut at the December meeting? Some voices have been calling for a jumbo 50-basis point cut in December, while more dovish members want to wait until early next year. ECB Vice-President Luis de Guindos, speaking after the release of the financial stability review, said it was “crystal clear” that the ECB would continue lowering rates but this had to be done in an “extremely prudent” manner. EUR/USD Technical EUR/USD has pushed below support at 1.0574 and 1.0545. Below, the support line of 1.0494 is under pressure 1.0625 and 1.0654 are the next resistance lines

The bullish rally in gold is fueled by concerns over the Russia-Ukraine conflict stirring safe haven demand. Market sentiment is torn between the prospect of fewer Fed rate cuts in 2025 and rising geopolitical risks Goldman Sachs analysts predict gold will set new records by the end of 2025, further bolstering bullish sentiment. Most Read: Will the Fed-ECB Policy Gap Sink the Euro? EUR/USD Analysis Gold bulls came out of the blocks with speed this week as heightened geopolitical tensions in Europe dominated the weekend. News that the US has authorized Ukraine to use ATACMS missiles to strike in Russian Territory saw the precious metals safe have appeal return.  There is no doubt that Gold has also benefited from a weaker US Dollar to start the week.  Currency Strength Chart (Strongest to Weakest): JPY, AUD, NZD, USD, CAD, GBP, CHF, EUR Source: FinancialJuice At the moment though, the precious metal is caught between a rock and a hard place. Markets continue to bet on less rate cuts in 2025 from the Federal Reserve which is keeping the USD supported. At the same time, the heightened geopolitical risk around Russia-Ukraine and the ongoing situation in the Middle East are keeping Gold buyers interested. The question is, which of the two opposing forces will win? The longer term picture for Gold does appear to favor the bulls. Looking back at President Trump’s first term in office, Gold prices rose as much as 55% on account of the trade war with China and tensions with Iran and North Korea. Looking at the picks by President Trump for some of the key positions in his administration and a lot of them are what you would call ‘China hawks’.This has only ramped up expectations of a potential US-China trade war, one of the driving forces behind the Gold rally in Trump’s previous term. Will history repeat itself? Adding to the idea that Gold might be beginning the next leg to the upside, Goldman Sachs analysts predict the precious metal will set a new record by the end of 2025. Economic Data Ahead US data is sparse this week with Geopolitics and more names for Trump’s cabinet likely to drive market sentiment. This morning, news that Russian President Vladimir Putin may use nuclear weapons to any strikes on Russian territory have added a new safe haven narrative. On Friday, the only high impact data release from the US is due. The S&P global PMI report will be watched closely as markets are still weighing up the actual health of the US jobs market. This is a direct result from two broad-based downgrades to the numbers since June.  Following the US PPI data release last week, markets will also focus on the pricing of manufacturing and labor costs. Any uptick here usually trickles downstream to consumers and could suggest an uptick in inflation is indeed on its way, even before President Trump officially takes office.   For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge) Technical Analysis Gold (XAU/USD) From a technical analysis standpoint, Gold has failed to maintain its bearish momentum despite a daily candle close below the outer trendline. Earmarks of a false breakout as the precious metal found support at the 100-day before rallying over the last two days to rise around 2.7% thus far.  The previous breakout of the inner trendline was followed by a retest before a continuation to the downside. This time however, the geopolitical landscape has helped the precious metal push toward a key resistance area around the 2650 handle.  The move higher this week mirrors the selloff over the past week or two, the question is will it be able to match the selloff in terms of the size of the move. If Goldman Sachs are right, this could potentially be the beginning of the next upside leg leading to new ATHs.  Immediate resistance rests at 2639 and 2650 before the longer term zone around 2673 comes into focus. On the support side, we have potential support resting at 2624 and 2600 before last week’s lows come into focus. GOLD (XAU/USD) Daily Chart, November 19, 2024 Source: TradingView (click to enlarge) Support 2624 2600 2574.5 Resistance 2639 2650 2673 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The New Zealand dollar has started the trading week with losses. In the European session, NZD/USD is trading at 0.5837, down 0.50% on the day. This is the New Zealand dollar’s lowest level since November 2023. New Zealand Services PMI stuck in contraction mode New Zealand Services PMI inched upwards in October but remains in contraction mode. The reading of 46.0 was higher than the September reading of 45.7 but shy of the forecast of 47.0. Services activity has contracted for eight straight months as the economy continues to sputter. The survey found that the major concerns of respondents were the cost of living and economic conditions. The Reserve Bank of New Zealand has shown it can be aggressive as it chopped interest rates by 50 basis points in October, bringing the cash rate to 4.75%. This move was expected yet the New Zealand dollar still plunged almost 1% in response to the dramatic move. The RBNZ meets next on Nov. 27 and the markets are expecting more strong medicine in the form of another oversized 50-bp cut to stimulate the economy. This would likely put strong downward pressure on the wobbly New Zealand dollar. US retail sales stronger than expected The week ended on a positive note as US retail sales were better than expected in October. Monthly, retail sales rose 0.4%, better than the market estimate of 0.3% and following a September gain of 0.8% that was revised from 0.4%. Annually, retail sales posted a strong gain of 2.8%, up from an upwardly revised gain of 1% in September and blowing past the forecast of 1.9%. The strong data for September and October has lowered the odds of a rate cut in December, which are currently around 60%. On Thursday, prior to the retail sales report, Fed Chair Powell said that “the economy is not sending any signals that we need to be in a hurry to lower rates”. NZD/USD Technical There is resistance at 0.5894 and 0.5948 0.5809 and 0.5755 are the next support levels  

US Dollar Index rally continues and the impact of a strong US dollar on global markets. Examining upcoming PMI data from the Euro Area and UK CPI figures, and their potential market implications. Assessing the likelihood of further rate cuts by the Federal Reserve and the Bank of England. Providing insights on market trends and potential volatility in the coming week. Read More: Trading USD/CHF: What to Expect After the US Dollar’s Multi-Month Highs Week in Review: Soft Landing in Jeopardy? A week that promised much is drawing to a somber close. Following two action packed weeks, this week which included US CPI and PPI data was muted in comparison. However, the week was not a waste by any means and provided some valuable insights while at the same time raising some key questions.  The biggest takeaway for the week is, whether or not a soft landing is still on the cards? An uptick in PPI coupled with rising US Yields and stubborn CPI data have brought the question back to the fore.  In Q3, the chance of a soft-landing went up from 40% to 42%. At the same time, the likelihood of a recession dropped from 30% to 28%, and the chance of stagflation went down from 28% to 27%. The highest probability is for a soft-landing, meaning there’s a greater chance of steady growth over the next year. The chances for different growth scenarios stayed mostly the same as last quarter. However, the election results have added uncertainty to the economic outlook, which might lead to changes in these chances going forward. Given the comments by Fed Chair Powell and the history of the Fed, another monetary policy pivot in early 2025 is unlikely. Powell has made it clear that the Fed will gauge the impact of Government policy before making any decisions, which will mean a Q1 or potentially Q2 pivot remains unlikely as markets come to terms with a Trump return to the White House. Taking into account all of the above however, market participants do not seem fazed by Fed Chair Powell’s comments. The probabilities and implied rates for 2025 remain muted with less rate cuts the base case, as market participants continue to see increased inflation in the new year. The impact of this continues to be felt by the US Dollar and US Yields in particular both of which have enjoyed bullish weeks. Markets are now pricing in around 72 bps of rate cuts through December 2025, down from 77 bps on Wednesday. This was down to a rise in US PPI and strong retail sales and NY Fed manufacturing data. Adding fuel to this were some announcements by President elect Trump where he touted some key foreign policy positions to known China Hawks. This will no doubt exacerbate concerns of a more aggressive stance toward China and increase trade war concerns.  Moving forward, these developments might be more important than the pricing of the December meeting where the likelihood of a cut still remains above the 60% mark. Source: LSEG (click to enlarge) The surprise of the week came from US Indices with the SPX and Nasdaq 100 giving back the majority of its post election gains. The SPX and Nasdaq 100 are 2.03% and 3.17% down for the week at the time of writing.  The biggest winner of the week was the crypto space with Bitcoin (BTC/USD) roaring to fresh ATH highs around the $93k handle. Markets remain optimistic that President Trump will follow through on his pro-crypto stance with various opinions floating around.  Commodity markets came under strain again this week with rising yields and the DXY pushing Gold down to lows around $2536/oz, as much as 5% down for the week. Oil pisces also struggled to gain any favor as OPEC downgraded their forecasts for a fourth consecutive month. Brent was down around 3% for the week at the time of writing.  All in all a confusing week, one that is likely to keep markets guessing heading into a busy festive season.  The Week Ahead: Muted Week in APAC, PMI Data Rules Asia Pacific Markets The week ahead in the Asia Pacific region will see a slowdown with a surprise meeting called by the Bank of Japan (BoJ) likely to be a highlight. Japan’s data is likely to show that things are slowly getting back to normal after some temporary disruptions. This should lead to better PMI figures. The manufacturing PMI might stay below average, but the services PMI should improve thanks to temporary tax cuts and rising incomes.  Exports are expected to grow by 1.7% compared to last year, following a 1.7% fall in September, while imports might drop by 4.5% due to lower global commodity prices. Inflation is predicted to decrease to 2.3% compared to last year, mainly because of a high base from last year. However, monthly growth should rise to 0.6%, helped by the end of energy subsidies and strong price increases in services. The surprise may come on Monday however, per a Reuters report BoJ Governor Ueda will deliver a speech and hold a news conference in Nagoya on Monday, the BOJ said, an event (which wasn’t previously scheduled) that will be closely watched by markets for hints on whether it might raise interest rates next month. The comments by Ueda could spark volatility in Yen pairs following a bout of weakness in recent weeks.  In China, data is thin next week. The loan prime rates will be announced on Wednesday, where no change is expected after the People’s Bank of China has so far held rates unchanged this month. In Australia the highlight of the week will be the RBA minutes scheduled to be released Tuesday. The report could shed some light on the recent RBA meeting and provide insight into rate policy moving forward.  Europe + UK + US In developed markets, the Euro Area returns with high impact data and more specifically PMI numbers. This is crucial for the Euro Area as growth is now the primary source of concern for the region given the struggle by its manufacturing powerhouse, Germany. The Euro having lost so much ground in recent weeks to the greenback in particular could face renewed selling pressure if a lackluster PMI print is revealed.  In the UK, Q3 GDP showed the UK economy slowed to 0.1% with the economy in September shrinking by -0.1%. This makes the upcoming CPI data even more important and intriguing with the services inflation print in focus once more. At the start of October, household energy bills went up by about 10%, which means overall inflation might go above 2% again. However, the Bank of England is more concerned with inflation in services which could rise toward 5% once more. ‘Core Services’ inflation is expected to drop significantly from 4.8% to 4.3%. This small detail probably won’t lead to a rate cut in December, but it suggests that the BoE might cut rates more sharply than the 2-3 cuts currently expected over the next few years. In the US next week markets enjoy a pause on the data front with one high impact release on the agenda. The S&P PMI report will be released on Thursday which should not have a huge impact.  The next important updates will be the core personal consumer spending figures and the crucial November jobs report, coming out in two and three weeks, respectively. For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge) Chart of the Week This week’s focus remains the US Dollar Index (DXY), which has run into multi-month resistance around 107.00 handle. The DXY has been having an effect across global markets together with US Yields and thus my intrigue into where we could head next. The DXY chart below and you can see the pink box where price is currently hovering which is a key area of resistance that the index has to navigate. Friday saw a significant pullback in the European session, but US Data later in the day provided USD bulls with renewed impetus. A break above the 107.00 handle may find resistance at 107.97 with a break above this level bringing 109.52 into focus.  Looking at the downside and immediate support rests around 105.63 before the 105.00 handle and the red box on the chart around 104.50 come into focus.  The DXY has been driving price action in all Dollar denominated instruments and this could continue in the week ahead.  US Dollar Index Daily Chart – November 15, 2024 Source:TradingView.Com (click to enlarge) Key Levels to Consider: Support 105.63 105.00 104.50 Resistance 107.00 107.97 109.52 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

USD/CHF is facing resistance at the 0.8900 handle after breaking above the 200-day MA. The US Dollar Index (DXY) is also at multi-month resistance, raising questions about a potential pullback. The Swiss Franc’s recent weakness will be welcomed by Swiss exporters and eases pressure on the Swiss National Bank (SNB). Most Read: Stock Market Today: Earnings Drive Disney Up, Cisco Down; S&P 500, Nasdaq Await Fed Signals USD/CHF has run into resistance around the 0.8900 handle having broken above the 200-day MA for the first time since late July. The recent US Dollar rally drove the pair higher as the CHF has faced headwinds due to a lack of safe haven flows in recent weeks.  The USD Index itself has risen to levels last seen in November 2023 around the 107.00 handle. Market participants are no doubt hoping for a pause around this level with a bit of weakness evident in today’s US session with the DXY retreating from multi-month resistance to trade around 106.55 at the time of writing. US Dollar Index (DXY) Daily Chart, November 14, 2024 Source: TradingView (click to enlarge) Fundamental Backdrop  The weakness in CHF is not the worst thing in the world, especially where Swiss exporters are concerned. The Swiss economy and businesses in general had made a plea a few months ago to the Central Bank as the Swiss Franc benefitted from safe haven flows to strengthen to multi month highs against G7 counterparts. This had a negative impact on many sectors of the Swiss economy which rely on exports as prices rose.  US data this week has also done little to ease concerns that the Fed may not cut rates as much as expected in 2025. An uptick in PPI data as the labor market appears to be cooling is not really a positive sign as inflationary fears have risen following the election of Donald Trump. For the first time since April 2023, Core PPI and CPI inflation are back above 3.0%. Ahead we have Fed Chair Powell speaking later in the US session, will we get any change in rate cut expectations? I do doubt any change will take place as I expect the Fed Chair to keep up the rhetoric that the data will decide policy. I take that as the Fed will wait to gauge the impact of incoming President Donald Trump’s policy on tariffs etc and see what the actual impact will be on inflation moving forward.  We wrap up the week with US retail sales tomorrow.  Source: For all market-moving economic releases and events, see the MarketPulse Economic Calendar.  (click to enlarge) Technical Analysis From a technical standpoint, USD/CHF has broken above the inner and outer trendline as well as the 200-day MA. USD/CHF has rallied some 500 pips since October 1 but has paused at the resistance level around the 0.8900 handle. Given the strength of the trend i would expect the bulls to push through this level but there are warning signs flashing that a retracement may be imminent. Looking at the DXY, it has run into multi-month resistance at the 107.00 handle while also hovering in overbought territory. This is a mirror of the USD/CHF which is also now trading overbought territory based on the 14 period RSI and has run into resistance as well. A lot will hinge on how the DXY navigates the resistance level at 107.00. If USD/CHF experiences a pullback, immediate support rests at the 200-day MA around 0.8819 with further support offered at 0.8757. Conversely, a move higher from here will be eyeing the psychological 0.9000 handle before resistance at 0.9040 and 0.9087 come into focus. Based on the rules around trendline, the 0.9040 handle is a key area as it was the second point of contact for the descending trendline and could prove a tough nut to crack. USD/CHF Daily Chart, November 14, 2024 Source: TradingView (click to enlarge) **Please note that this is a follow- up piece. Further technical analysis here: USD/CHF Technical Outlook: Confluence Area Hints at Bullish Breakout Support 0.8819 0.8757 0.8633 Resistance 0.8890 0.9000 0.9040 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The Australian dollar is steady on Wednesday. In the European session, AUD/USD is trading at 0.6525, down 0.12% on the day. Australia’s wage inflation within expectations Wage inflation in Australia eased to 3.5% y/y in the third quarter, down from 4.1% in Q2 and just shy of the market estimate of 3.6%. This was the weakest wage price growth since Q4 2022. Quarterly, wage growth remained at 0.8% in the third quarter, below the market estimate of 0.9%. The data is in line with the Reserve Bank of Australia’s projection that wage growth has peaked. The central bank expects wages to continue to easing in the fourth quarter and next year, which supports the case for a rate cut. The RBA has insisted that a rate hike remains on the table as underlying inflation is too high. The decline in wage growth is an encouraging sign as high wages have driven services inflation, which remains much higher than the 2% inflation target. The RBA’s hawkish stance has put it out of sync with other major central banks are lowering rates in response to falling inflation. The markets have priced in another hold in rates at the December meeting, with an initial rate cut likely in the first half of 2025. Australia releases the October employment report on Thursday. The economy is expected to have added 25 thousand jobs, after a sparkling 64.1 thousand gain in September, most of which was full-time employment. The unemployment rate is expected to remain unchanged at 4.1%. In the US, Minneapolis Fed President Neel Kashkari said on Wednesday that the US economy is in a “good place” and that monetary policy is currently “modestly restrictive”. Kashkari added that economic data would be the guide as to the Fed’s rate path. AUD/USD Technical There is support at 0.6505 and 0.6475 0.6543 and 0.6573 and the next resistance lines

The euro can’t seem to find its footing. EUR/USD is down for a third straight trading day and has declined 0.38% on Wednesday, trading at 1.0608 at the time of writing. Earlier today, the euro dropped as low as 1.0606, its lowest level since April 15. The US dollar rose after Donald Trump’s decisive election win, and the dollar is getting a boost as the Republicans are likely to win the House of Representatives. This would give the Republicans control of the House and the Senate and would make it easier for Trump to push through his agenda. Eurozone confidence falls sharply The eurozone ZEW economic sentiment index fell in November to 12.5, down sharply from 20.1 in October and well short of the market estimate of 20.5. It was a similar story for the German ZEW release, which fell from 13.1 to 7.4, shy of the consensus of 13. Investors and analysts are pessimistic about the economic outlook for two reasons. First, the Trump victory could signal new tariffs on European products and even trigger a trade war, the last thing the weak eurozone economy can afford. The second concern is the collapse of the German government coalition, with a snap election called for Feb. 23. The European Central Bank meets next month and has signaled another reduction. ECB Governing Council member Olli Rehn said on Tuesday that a December cut is likely. The markets have priced in a reduction of 35 basis points in December, suggesting that traders are split on whether the ECB will opt for a cut of 25 or 50 basis points. There are differing opinions among the Governing Council members and we’re likely to see these opposing views aired in the coming weeks. EUR/USD Technical EUR/USD tested support at 1.0614 earlier Below, there is support at 1.0572 There is resistance at 1.0671 and 1.0713

The Australian dollar has posted sharp losses on Tuesday. In the European session, AUD/USD is trading at 0.6544, down 0.44% on the day. Australian consumer, business sentiment accelerates Australian businesses and consumers are showing improved confidence. The National Bank Business Confidence index for October rose to 55, up from -2 in September and its highest level since January 2023. The Westpac consumer confidence index climbed 5.3% to 94.6 in November, up from 89.8 in October. This was the highest level in over two years. The positive confidence numbers indicate that businesses and consumers are more confident about the economic outlook, as expectations grow for a rate cut from the Reserve Bank of Australia, which meets on Dec. 10. Australia releases the October employment report on Thursday and the release could be a significant factor as to whether the central bank continues to hold rates or delivers an initial rate cut. Australian inflation has fallen to 2.8%, within the RBA’s target of 1% to 3%. Australia releases wage inflation on Wednesday. Wages are expected to ease to 3.6% y/y in the second quarter, down from 4.1% in Q1. Wage inflation has been a driver of services inflation which rose to 4.5% in the second quarter, up from 4.3% in Q1. RBA policymakers are hesitant to start lowering rates until services inflation loses some steam and heads lower. In the US, there are no major events on the calendar but investors will be listening closely as a number of FOMC members make public remarks. The Federal Reserve is expected to continue to trim rates, with a 25-basis point cut the most likely scenario at the December meeting. AUD/USD Technical AUD/USD has pushed below support at 0.6559 and is testing support at 0.6544. Below, there is support at 0.6524 There is resistance at 0.6579 and 0.6594

The British pound is down for a third straight trading day on Tuesday. In the European session, GBP/USD is trading at 1.2822, down 0.36% on the day. Earlier today, the pound fell below the 1.28 line for the first time since Aug. 15. UK employment rate climbs to 4.3% The UK employment report for the three months to September disappointed, as the unemployment rate shot up to 4.3%, up from 4% in the previous reading and above the market estimate of 4.1%. This was the highest level since the three months to May. Unemployment rolls climbed to 26.7 thousand, up from a revised 10.1 thousand but below the market estimate of 30.5 thousand. The BoE meets next on Dec. 19 and the jump in the unemployment rate could raise expectations for a rate cut. The next employment report will be critical, coming just two days before the BoE meeting. There was some good news as job growth climbed 220 thousand, lower than the previous reading of 373 thousand, which was a record high. This was the fifth straight three-month period of job growth, pointing to a stable labor market. Annual earnings, excluding bonuses inched down to 4.8%, down from 4.9% in the three months to August and higher than the market estimate of 4.7%. Wage growth is feeding services inflation, which remains much higher than the BoE’s 2% target. A host of Federal Reserve members will deliver public remarks today and investors will be looking for clues about future rate moves. The markets have priced in a 25-basis point cut at the Dec. 18 meeting at 69% according to CME’s FedWatch. We can expect market expectations to shift if the US posts unexpected inflation or employment data ahead of the meeting. GBP/USD Technical GBP/USD pushed below support at 1.2841 earlier and is testing support at 1.2814. Below, there is support at 1.2771 There is resistance at 1.2884 and 1.2911

Lack of concrete fiscal stimulus measures ex-post China NPC Standing Committee meeting. Deflationary and liquidity trap risks are now back in the forefront that may trigger a medium-term negative feedback loop into the Hong Kong & China stocks. Watch the 19,700 key support on the Hang Seng Index. Since hitting a 52-week high of 23,242 on 7 October, the Hang Seng Index has failed to revive its prior bullish momentum that took shape in September on the backdrop of anticipated “more forceful” fiscal stimulus measures to accompany an expansionary monetary policy as China’s central bank, PBoC has cut its policy interest rates and injected more liquidity in the past two months. After a month of lacklustre performance in October where the Hang Seng Index recorded a monthly loss of 3.9%, the slide failed to reverse and started to gain downside momentum on Monday as it gapped down and shed 1.45% on Monday, 11 November. The current weakness seen in the Hong Kong stock market has been attributed to the lack of details of the promised fiscal stimulus measures from China to negate the ongoing deflationary spiral that is at high risk of being entrenched in the behaviours of Chinese consumers and businesses. After a week-long economic-related meeting helmed by the National People’s Congress Standing Committee, China’s policymakers have announced the expected and approved 10 trillion yuan of debt swaps to allow local governments to reduce off-balance sheet hidden debt on late Friday afternoon, 8 November. However, it stopped short of unleashing new fiscal stimulus to counter a potential increase in trade tariffs towards China goods and services from incoming US President-elect Trump’s White House administration. Hence, financial market participants have started to lose confidence and patience in the timing and willingness of China’s top policymakers to enact “whatever it takes” bazooka-liked fiscal stimulus measures to jumpstart consumer confidence and spending, which in turn, relay negative feedback loops back into the Hong Kong and China stock markets. Heightened deflationary spiral and liquidity trap risks Fig 1: China’s inflation data, 10-year sovereign bond yield & CNH/USD trends as of 31October 2024 (Source: TradingView, click to enlarge chart) Despite China’s central bank, PBoC’s slew of interest rate cuts and liquidity injections in the past two months, there is still a lack of confidence to trigger a boost in internal demand, and it can be seen apparently in the data of core consumer inflation and producers’ inflation (factory gate prices) that continued to decelerate in October and came in below expectations. The deceleration of factory gate prices continued to be the main culprit of the ongoing heightened risk of a deflationary spiral unfolding in China. It continued to decline since July, and it fell further to -2.9% y/y in October from -2.8% in September (see Fig 1). The resultant effect is a continuation of a major impulsive downtrend sequence of the China 10-year sovereign bond yield that led to a total wipeout of the gains seen in the offshore yuan against the US dollar in September, induced by the first US Federal Reserve’s interest rate cut. Overall, a resurgence of a major weakening trend of the offshore yuan is likely to trigger a negative double whammy for Hong Kong and China stocks. Watch the 19,700 support on the Hang Seng Index Fig 2: Hang Seng Index medium-term & major trends as of 12 Nov 2024 (Source: TradingView, click to enlarge chart) The Hang Seng Index ended Tuesday, 12 November session on a weak footing as it declined by 2.8% and hit a six-month low despite a positive news flow that reported that China authorities are likely to cut home buying taxes soon to as low as 1% from the current level of 3%. The daily RSI momentum has just staged a bearish breakdown below a parallel ascending trendline support and inched below the 50 level which suggests a potential resurgence of medium-term bearish momentum. A break with a daily close below 19,700 key medium-term pivotal support (also the 50-day moving average) may see further weakness to expose the next medium-term supports at 17,900 (also the 200-day moving average) and 16,610 (see Fig 2). Clearance above the 21,420 intermediate resistance may dissipate the bearish tone for the medium-term resistance to come in at 22,690 in the first step.

Gold prices retreat as US Dollar strengthens as hopes of aggressive rate cuts fade. China’s economic slowdown concerns and potential sanctions impact iron ore and gold prices. Technical analysis indicates gold’s vulnerability to further downside, with key levels identified. Most Read: Markets Weekly Outlook – Attention Shifts Back to Data, US CPI in Focus Gold prices have started the week on the back foot as the US Dollar continues to advance. Growing hopes of a ceasefire under a Trump Presidency have also diminished the safe haven’s appeal coupled with expectations of fewer rate cuts in 2025.  The biggest loser from the US election last week appears to be commodity markets which are feeling the strain of a rampant US Dollar. Gold prices retreated last week followed by Silver, Platinum with iron ore facing fresh challenges from concern around China growth as well.  China, who had been a major buyer of Gold this year, has remained on the sidelines for the past few months as Gold prices continued to soar to fresh highs. Concerns around the growth picture in China have also impacted Iron Ore prices as markets anticipate a slowdown in the Chinese economy which could dent demand for raw materials. The threat of sanctions has seen UBS downgrade China growth for 2025 to 4% while warning that 2026 could prove even more challenging. Will we see more downgrades in the coming weeks? US Dollar Strength Expected to Continue The problem for Gold prices moving forward is that President Trump will only take office in January. This means that any of the optimism around a Middle East peace deal and the potential for higher rates may not change until then. This could leave Gold in a spot of bother with the recent selloff likely to continue.  There are a few things that could reignite the bullish rally in the precious metal with one of them being a retaliatory attack on Israel by Iran. This could put hopes of a Middle East ceasefire in jeopardy and thus lead to an increase in demand for safe havens once more.  Many had touted a Trump victory as a positive for the Gold rally, however given that markets have some experience from Trump’s first term it appears they are a lot calmer this time around.  Looking back at the performance of Gold under various Presidents, during Trump’s first term in office the precious metal rose 55%. The picture however may be distorted by the fact that the last year of the Trump Presidency occurred during the pandemic as Gold demand was ramped up due to the uncertainty.  Source: Refinitiv, ING Think (click to enlarge) Even then given the recent rally in Gold and the expectation that Trump policies could lead to higher inflation and a stronger USD, another 55% gain seems unlikely.  A look ahead to the rest of the day, Veterans day holiday in the US should see a low liquidity US session which could lead to a lot of choppy price action as the European session comes to a close.  Technical Analysis Gold (XAU/USD) From a technical analysis standpoint, Gold on a daily timeframe is looking ominous and vulnerable toward further downside.  A break of the long term ascending trendline last week was followed by a brief foray higher before a rejection and selloff which has brought Gold to within touching distance of last week’s low. At the moment though, price appears to be caught between support at 2650 and resistance 2700.  Immediate support rests at 2650 before 2639 and 2624 comes into focus.   Now a recovery from her will need acceptance above the 2700 handle if we are to see a further push to the upside. At this stage the 2800 handle appears far away but could still come into play moving forward.  Gold (XAU/USD) Daily Chart, November 11, 2024 Source: TradingView (click to enlarge) Support 2650 2639 2624 Resistance 2675 2700 2711 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

Trump’s clean sweep saw a significant rise in the US Dollar and Yields. Can it continue? Data in focus next week, US CPI data is due with potential implications for Federal Reserve policy and interest rate decisions. US Dollar Index (DXY) breaks above key level of 105.00. Where to next for the Greenback? Read More: Gold Prices Plunge as Trump Triumphs: What’s Next for XAU/USD? Week in Review: Trump Trade in Spotlight as US Dollar and Yields Rise A blockbuster week comes to a close with a slow Friday as markets still digest the news and potential developments after Donald Trump swept to victory in the US elections. Not a surprise, at least from my side, however there were a few moves in markets that took me by surprise.  Looking back at the week, the US Dollar and Wall Street indexes rose sharply following Trump’s victory. This should not have come as a surprise given the much discussed Trump trade in the lead up to the election or the growing narrative that Trump will be a positive for economic growth.  The 47th President of the United States will only assume office on January 20, 2025. Despite this, markets are already beginning to anticipate the effect of some of Trump’s policies which are likely to be implemented. The biggest one being tariffs which if implemented could potentially lead to an uptick in inflation and potentially slower rate cuts. We are already seeing the effect in the lead up to and since the election as US yields rose on heightened inflation expectations. However, a December rate cut remains firmly on the cards with January likely to be an interesting meeting for the Fed as incoming President Trump would have just assumed office. The US Dollar Index (DXY) has hit levels last seen in July, which together with the rising US Yields dragged Gold prices down to a weekly low around 2642. However, Thursday saw a significant recovery for the precious metal but it looks set to end the week below the $2700 handle. US Yields did however give back most of the gains made this week trading flat at the time of writing. Source: TradingView Oil prices had a surprisingly muted week given the moves across global markets. Brent was trading around 1% down for the week at the time of writing.  On the FX front, the rise of the USD index has dragged Cable and EUR/USD lower with emerging markets. One of the biggest winners of the week is undoubtedly Bitcoin which printed two fresh highs, first at 75000 and then on Friday a fresh high at 77000. A lot of the move is down a Trump presidency with the incoming President a proponent of the Cryptocurrency industry. The Week Ahead: China’s Standing Committee Meeting Asia Pacific Markets The week ahead in the Asia Pacific region will see a slowdown with the exception of data from China.  In China, CPI data will be released on Saturday morning, and it is expected to stay around 0.4% compared to last year. More data will be released next Friday, and it is anticipated that the numbers will be a bit stronger for October, following the monetary easing from September. Housing prices will be watched closely for signs that they are starting to stabilize, and even a smaller drop than usual would be seen as positive news. Japan will release its third-quarter GDP data next week. Growth is expected to slow to 0.3% from 0.8% in the second quarter because of typhoon and earthquake warnings affecting economic activities. Private consumption is expected to increase a little, but construction and facility investment might decrease. Growth is anticipated to pick up again in the fourth quarter due to a rebound. Australia’s labor market is expected to slowly weaken in the fourth quarter, with unemployment increasing to 4.3%. This is because while there are still many people available for work, the number of new jobs being created is slowing down. Europe + UK + US In developed markets, the Euro Area will have a break from high impact data. There are some data releases from smaller countries which are likely to have a minimal impact on the under pressure Euro.    In the UK, the unemployment rate is expected to go up slightly, but these numbers are seen as unreliable because of sampling problems. Other payroll data shows that hiring outside the government has dropped a lot this year. Wage growth is likely to slow down as well, partly because of comparisons to previous high numbers. UK GDP data is also due, monthly data indicates that growth in the third quarter was much slower compared to the first half of the year, partly because of earlier data fluctuations. Surveys show that the pace has slowed a bit, but the new budget is expected to help increase growth next year. In the US next week attention shifts firmly back to data. Although market attention has shifted to the jobs market I expect inflation to still hold weight moving forward especially after the election.  Used and new car prices are expected to rise for October’s CPI, keeping the overall rate at 0.2% and core CPI at 0.3%. This is above the 0.17% monthly rate needed for the 2% inflation target, which might lead to doubts about the Fed cutting rates in December. However, with a cooling job market and tight monetary policy, a rate cut is still anticipated. There might be a pause in January due to possible stronger growth with Donald Trump as President, a business-friendly environment, and higher inflation from trade tariffs. For all market-moving economic releases and events, see the MarketPulse Economic Calendar. Chart of the Week This week’s focus is back to the US Dollar Index (DXY), which has finally broken higher after a brief period of consolidation. Looking at the Trump trade, the question will be whether it continues until Trump’s election.  Looking at the DXY chart there is a key area of support marked off with the red box on the chart around 104.50. Below that we have support at 104.028 with the 200-day MA resting at 103.850 which makes this area a key area of confluence.  Conversely, a move to the upside may find resistance at 105.40 and 105.63 before the 106.00 handle comes into focus.  As I mentioned above, the biggest factor to pay attention to will be whether the ‘Trump trade’ continues, if it dies the DXY may continue higher.   US Dollar Index Daily Chart – November 8, 2024 Source:TradingView.Com (click to enlarge) Key Levels to Consider: Support 104.50 104.00 103.65 Resistance 105.40 105.63 106.00 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

US President-elect Trump’s proposed policies may trigger a further upside movement on longer-term US Treasury yields. A break above the 4.49% on the US Treasury yield may see a further potential rally towards 5.20%. A further reduction of the 2-year and 10-year yield spread between the Australian government sovereign bonds and US Treasuries may put further downside pressure on the AUD/USD. This is a follow-up analysis of our prior report “AUD/USD: Under downside pressure from China’s weak inflation” published on 14 October 2024. Click here for a recap. Among the developed nations’ central banks, the Australian central bank, RBA is the sole “lone ranger” (except Japan’s BoJ) that continued to defend its staunch “cautiously hawkish” guidance and kept its short-term policy interest rate unchanged at 4.35%, a 13-year high. In the recent RBA monetary policy meeting that concluded on Tuesday, 5 November, RBA Governor Bullock reiterated that interest rates in Australia need to stay restrictive for the time being due to upside risks to services inflation. Even though the labour market has softened, RBA does not see a massive sharp deterioration in underlying conditions. In addition, Australia’s core CPI has eased to 3.5% y/y in Q3 from its Q4 2022 peak print of 6.8%, but RBA’s latest forecast showed core inflation trend will likely only hit its 2-3% target by mid-to-late 2025. Hence, market participants expect the RBA to only enact its first interest rate cut in either May or July next year, and based on the RBA Rate indicator as of 6 November that calculates a percentage probability of an RBA interest rate change based on the market-determined prices in the ASX 30-day interbank cash rate futures market suggests an implied interest rate cut of 47 basis points (bps) in total for 2025. Relentless push-up in the 10-year US Treasury yield Fig 1: Medium-term & major trends of 10-year US Treasury yield with yield spreads of AU sovereign bonds/US Treasuries (Source: TradingView, click to enlarge chart) US President-elect Trump’s proposed deep cut on the corporation tax rate from 21% to 15% is likely to further increase the US budget deficit. In addition, the proposed higher trade tariffs on Chinese and the rest of the world’s imports may also revive inflationary pressure in the US economy. The net effect of Trump’s campaign trail proposed policies is higher longer-term US Treasury yields which the bond vigilantes have responded to in the past four weeks. The start of the current US Federal Reserve interest rate cut cycle on 18 September saw a jumbo 50 basis points (bps) cut on the Fed funds rate. In contrast, the longer-term 10-year US Treasury yield traded higher and rallied by 88 bps from its 17 September low of 3.60% to print a recent high of 4.47% on US presidential election day, 5 November. A bullish breakout with a daily close above 4.49% on the 10-year US Treasury yield may see further upside to revisit the 5% to 5.20% major resistance zone which in turn can potentially assert downside pressure on the 2-year and 10-year yield spreads between Australian government sovereign bonds and US Treasuries (see Fig 1). A reduction in these yield spreads may trigger further downside pressure on the AUD/USD AUD/USD at risk of revisiting 0.6400/6360 Fig 2: AUD/USD medium-term trend as of 8 Nov 2024 (Source: TradingView, click to enlarge chart) The price actions of AUD/USD have continued to oscillate within a major complex sideways range configuration since its 13 October 2023 low of 0.6170. After a test on the upper limit of the major range configuration at 0.6900 on 27 September, the AUD/USD started to decline toward the lower limit of the range, broke below its 50-day moving average, and traded below it since 14 October (see Fig 2). Watch the 0.6720 key medium-term pivotal resistance. A break below the 0.6540 intermediate support may expose the medium-term pivotal support zone of 0.6400/6360 (also the major ascending trendline from the 13 October 2023 low). On the other hand, a clearance above 0.6720 negates the bearish tone for a retest on the 0.6900 major resistance (also close to the long-term secular descending trendline from the 25 February 2021 high).

The Japanese yen has posted gains on Friday. In the European session, USD/JPY is trading at 152.38, down 0.36% on the day. The yen has taken traders on a roller-coaster ride this week, plunging 2% on Wednesday and rebounding on Thursday with a 1.1% gain. Japan’s household spending declines 1.1% Japan’s household spending fell by 1.1% y/y in September, following a 1.9% drop in August. This was better than the market estimate of -2.1%. Household spending has declined in 10 of the past 12 months, as consumer confidence fell in October and inflation is relatively high. On a monthly basis, household spending decreased 1.3%, after a strong 2% gain in August. This beat the market estimate of 0.7%. The weak yen is also weighing on consumers, who are being squeezed as their purchasing power has fallen. The yen fell to three-month lows this week against the dollar and if the downswing continues, the Bank of Japan will be under pressure to respond with a rate hike. Although consumers are holding tight on the purse strings, wages have been rising and the BoJ is hopeful that will translate into increased consumer spending and demand-driven inflation. Consumer spending makes up more than half of the economy and BoJ is unlikely to make further rate hikes until it sees stronger consumer spending. The markets don’t expect a rate hike until early 2025. The Federal Reserve didn’t surprise anyone with a 25-basis point rate cut on Wednesday. This is the second cut in the easing cycle after an oversized 50-bp chop in September. The vote was unanimous and unlike the Bank of Japan, the Fed has been transparent and telegraphed its plan to cut rates ahead of the meeting. The Fed is expected to continue cutting rates in the coming meeting and will be keeping a close eye on inflation and employment reports. USD/JPY Technical USD/JPY faces resistance at 153.44 and 154.17 152.16 and 151.43 are the next support levels

The Japanese yen has steadied on Thursday after plunging 2% a day earlier. In the European session, USD/JPY is trading at 154.00, down 0.40% on the day. The dust hasn’t settled from the US election, as a red Republican wave swept across the country. Republican Donald Trump retook the presidency in convincing fashion, easily defeating Democrat Kamala Harris. The Republicans have gained control of the Senate and the House of Representatives race is too close to call. The US presidential race was a dead heat going into the election and the financial markets were bracing for an unclear outcome and a period of political instability. Trump’s resounding victory sent the US dollar and US equity markets soaring on Wednesday. Will Trump make good on his tariff threats? Trump has threatened to slap trade tariffs on China and Europe, which could boost inflation and slow the pace of the Federal Reserve’s interest rate cuts, which  would be positive factors for the US dollar. There is understandable concern in China and Europe that Trump’s policies could lead to confrontation with the US, but trade wars would also hurt the US economy and it remains to be seen if Trump’s bark is worse than his bite. Japan reported that wage growth jumped 2.6% y/y in September, up from 2.4% in August. This was the highest level in over 31 years and supports the case for the Bank of Japan to raise interest rates in the coming months. The BoJ wants to see higher wages which will boost spending and demand and push inflation higher. As wages move higher, expectations are rising that the BoJ will hike rates, possibly in January 2025. The BoJ won’t be happy about the yen’s 2% slide after Trump’s election win and if the yen continues to fall it would raise pressure on the BoJ to raise rates at the December meeting or intervene in the currency markets to provide some relief for the yen. USD/JPY Technical USD/JPY faces resistance at 155.78 and 156.95 153.54 and 152.37 are the next support levels

Silver has outperformed gold year-to-date, driven by increasing demand. The fundamental picture for silver is positive, with demand expected to continue outpacing supply. Short-term volatility is possible due to the US election and Federal Reserve meeting. Technically, silver is at a key support level; a close above 32.60 could signal renewed upward momentum. Most Read: Brent Crude – Oil Prices Rise as OPEC + Extend Output Cuts Silver prices have continued to rally for the majority of this year. The metal has been overshadowed by Gold this year but has actually outperformed the precious metal. Silver’s YTD return sits at around 36%, while the precious metal is up around 32% over the same period.  There has been growing interest in silver over the last few years as its use in technology production, EVs and renewable power solutions has driven up demand. This has resulted in tremendous gains for silver, with returns ranging from a low 4.68% in 2022 and a high of 46.86% in 2020. The losses in between saw a high print of -14.65% in 2021. Over the period between 2019 to date, Silver has risen 89% since 2019.  Silver (XAG/USD) Performance 2019-2024 YTD Source: TradingView (click to enlarge) The fundamental picture is a positive one for silver with the gap between global supply and physical demand remaining wide. If demand continues to outpace supply as is expected, Silver should continue to rise.  Looking at the chart below, you can see the huge discrepancy between demand (blue line) and supply (white line) which I expect will underpin prices moving forward. Source: LSEG Silver prices could face some short-term volatility over the next couple of days. The US election is underway which could have implications on the US Dollar, while the Federal Reserve meeting tomorrow could lead to US Dollar weakness as market participants are pricing in a 25 bps cut from the Federal Reserve. For all market-moving economic releases and events, see the MarketPulse Economic Calendar.   Technical Analysis Silver (XAG/USD) From a technical analysis standpoint, Silver had a significant pullback last week as the USD index rose further. Since peaking around the 34.80 handle on October 22, silver has continued to print lower highs and lower lows, breaking below the 100-day MA and touching the the long term ascending trendline and 200-day MA.  This area around 32.20 is a key area of support and could see Silver push higher once more. On the H4 timeframe, Silver does need a four hour candle close above the 32.60 handle. A close above 32.60 will result in a change of structure with the previous highs being taken out, a sign that momentum may be shifting once more.  Above the 32.60 handle there is further area of resistance at 33.01, before a bit of freedom which could see silver prices make a swift run toward the 34.00 handle.  Alternatively, a break below the ascending trendline and 200-day MA could see a retest of the 31.34 support handle and potentially the 30.65 mark if a deeper pullback gains momentum.  Silver (XAG/USD) Four-Hour (H4) Chart, November 5, 2024 Source: TradingView (click to enlarge) Support 31.34 30.65 30.00 Resistance 32.60 33.01 34.00 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

GBP/USD has broken below a long-term ascending trendline, signaling potential further downside. UK budget concerns and a drop in manufacturing PMI have contributed to the Pound’s struggle. UK budget concerns and a drop in manufacturing PMI have contributed to the Pound’s struggle. Most Read: Apple (AAPL), Amazon (AMZN) Earnings Preview: AI Capital Spending and iPhone Sales in Focus Cable has struggled this week following the UK budget. Pound Sterling should have appreciated against the greenback considering the paring back of rate cut expectations from the Bank of England (BoE).  Following the UK budget expectations for the Bank of England to lower interest rates have dropped. This change came after the UK Chancellor announced the biggest tax increase since 1993, worth 40 billion pounds, along with plans to increase government spending and investment by raising the fiscal deficit. Additionally, the Office for Business Responsibility predicted higher inflation rates of 2.5% in 2024 and 2.6% in 2025, leading traders to reduce their bets on rate cuts by the Bank. There are some other concerns around the UK budget which was raised by Moodys as well and could explain the British Pounds struggle. There are concerns that the added borrowing will impact the UKs ability to bring their finances in order. Moodys also stated that the UK budget creates challenges and cautioned that we could see muted growth from the UK moving forward.  The continued selloff in the US Dollar was not enough to arrest the slide in GBP/USD before a bounce occurred this morning. The release of the S&P Global Flash UK Manufacturing PMI dropped to 49.9 in October 2024, down from 51.5 the previous month. This was lower than expected and shows the first drop in factory activity since April. New orders decreased as clients waited for the UK budget. Orders from abroad also fell for the 33rd month, with fewer orders from Europe, China, and the US. Production increased slightly as factories worked through their backlog of orders. Manufacturing jobs grew for the third time in four months, but more slowly because of fewer new orders. Costs for materials dropped to their lowest in ten months, and selling prices went up the least since February. Business optimism improved a little from a nine-month low in September. The data however appeared to have little impact on GBP/USD ahead of the US session Source: FinancialJuice (click to enlarge)  A batch of US data awaits later in the day with the US jobs report chief among them. Markets are anticipating a strong number following labor data seen earlier in the week and should this come to pass, it will be interesting to gauge if cable can shrug off the US data and continue its move higher today.  For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge) GBP/USD Technical Analysis GBP/USD is now at an interesting place as it has broken below the long-term ascending trendline which began back in April. This trendline break opens up a host of scenarios and potential opportunities in cable moving forward.  I could see a retest of the trendline developing before a continuation of the move lower with a deeper pullback to the 1.300 handle also a possibility.  Any such pullback may be preferred for any would-be-shorts looking to get involved. A break and daily candle close above the 1.30150 handle would invalidate the bearish setup.  Looking at the downside, support rests at the 200-day MA around 1.2800 before the 1.2750 and 1.2681 handles come into focus.  GBP/USD Daily Chart, November 1, 2024 Source: TradingView.com (click to enlarge) Support 1.2845 1.2800 1.2750 Resistance 1.2942 1.3000 1.3033 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The Canadian dollar is showing little movement on Friday. In the European session, USD/CAD is trading at 1.3931 at the time of writing, down 0.02%. We could see some volatility from the Canadian dollar later in the day, with the release of the US employment report. US nonfarm payrolls expected to sink to 4-year low The US releases the October employment report later today and nonfarm payrolls are expected to fall sharply to 113 thousand, compared to 254 thousand in September. The expected slide is due to one-time events which likely dampened job growth in October, namely, hurricanes and the strike at Boeing. If the market estimate is accurate, this will be the lowest nonfarm payrolls since December 2020. Soft payrolls have spooked the markets in the past, but if investors look beyond the jobs numbers they will see that the labor market remains solid. The unemployment rate is expected to remain unchanged at 4.1% and wage growth is projected to rise 0.3% m/m and 4% y/y, little changed from September. Canada’s GDP was flat in August but is estimated to have expanded by 0.3% in September. The weak August reading was affected by lockouts in the railway industry and summer wildfires. The Bank of Canada has been aggressive in its rate-cutting cycle with four cuts this year, including a jumbo 50-basis point cut last week. The soft August GDP bolsters the case for another 50-basis point cut at the December meeting, but much will depend on inflation and employment reports for October which will be released ahead of the meeting. As was the case at last week’s meeting, BoC policymakers will have to decide whether to hike rates by 25 or 50 basis points. USD/CAD Technical USD/CAD tested support earlier at 1.3923. Below, there is support at 1.3902 There is resistance at 1.3956 and 1.3977  

The euro is flat on Thursday after three straight winning days. In the European session, EUR/USD is unchanged on the day, trading at 1.0854. Eurozone CPI hits 2% target Eurozone inflation rose to 2% y/y in October, up from 1.7% in September and above the market estimate of 1.9%. This was the fastest increase since April. The main drivers of the inflation increase were services and food prices. Services inflation continues to be a headache for the European Central Bank, unchanged at 3.9% and almost double the target. Monthly, CPI rose 0.3% after a 0.1% decline in September. Core CPI remained at 2.7% y/y, just above the market estimate of 2.6% and the lowest level since February 2022. How will the European Central Bank react to the inflation report? The central bank has been in the forefront of the rate-cutting trend, having lowered interest rates three times this year. The ECB is expected to trim rates at the December meeting, although the October inflation data indicates that inflation has not yet been fully contained. ECB President Lagarde said after the inflation release that she expects inflation will sustainably reach the 2% target in 2025. The eurozone labor market remains strong despite a sluggish economy. Thursday’s unemployment report showed the unemployment rate fell to 6.3% in September, down from 6.4% in August and the lowest level since the eurozone was establish in 1999. The ECB, like other major central banks, will have to balance a strong labor market against weakening inflation as it determines its rate path for the coming months. EUR/USD Technical EUR/USD tested resistance at 1.0885 earlier. Above, there is resistance at 1.0913 1.0842 and 1.0814 are the next support levels