The British pound has lost ground on Thursday. In the North American session, GBP/USD is trading at 1.2506, down 0.44% on the day. Earlier, the pound dropped as low as 1.2593, its lowest level since mid-May. UK retail sales expected to slip It’s a busy Friday in the UK, highlighted by the retail sales report. We’ll also get a look at consumer confidence and the services and manufacturing PMIs. The UK releases October retail sales on Friday and the markets are bracing for a downswing. The market estimate stands at 3.4% y/y, compared to 3.9% in September, the highest since Feb. 2022. Monthly, retail sales are expected to decline by 0.3%, following a 0.3% gain in September. The UK consumer remains in a sour mood, as the cost of living and high interest rates continue to squeeze households. The GfK consumer confidence index is expected to remain unchanged in November at -21. The UK manufacturing sector has been struggling. The October PMI was revised downwards to 49.9, which indicates stagnation. The PMI has decelerated for three straight months and the weak global demand will likely continue to weigh on manufacturing in the months ahead. The market estimate for November stands at 50.0. The services sector is in better shape and has shown 12 consecutive months of growth. The PMI has also eased for three straight months, raising concerns about the health of the economy. The market estimate for November is 52.0, unchanged from the October figure. The US will also publish manufacturing and services PMIs on Friday, with little change expected. The Manufacturing PMI is expected to rise from 45.5 to 45.8, and the Services PMI, which has been showing solid growth, from 55 to 55.2. GBP/USD Technical There is resistance at 1.2666 and 1.2702 GBP/USD pushed below support at 1.2618 and tested support at 1.2582 earlier

Bitcoin’s price surge is fueled by institutional demand, growing mainstream acceptance, and a derivatives market boom. The derivatives market surge, while driving prices higher, also increases volatility and the risk of liquidations. ETF inflows have approached $2 billion in three days, further boosting Bitcoin’s rally. Most Read: GBP/USD, GBP/JPY Price Action Ideas Post UK Inflation Release Bitcoin prices continue to rise and print fresh highs as speculation continues to grow around a favorable outlook toward crypto from the incoming Trump administration. To further support these rumors, leaks about a potential White House crypto expert appointment and rumors of Trumps social media companies interest in a buyout of crypto trading firm Bakkt has aided the rally.  The Crypto Fear and Greed index shows markets are in a period of extreme greed.  Source: FinancialJuice The question is whether this will lead to pullback or are we set for more gains in the coming weeks? Bitcoin’s Impressive Climb Amid Derivative Market Surge One big reason Bitcoin’s price has gone up is because institutional demand continues to rise.. They’re putting a lot of money into Bitcoin, which makes it more trustworthy. For example, MicroStrategy has bought a lot of Bitcoin and made a good profit as its value has increased. The way the market works also helps. More people are accepting Bitcoin as a real type of investment. Since there’s only a limited amount of Bitcoin available and more people want it, the price keeps going up on the basic rule of supply and demand. The derivatives market is a big factor in Bitcoin’s price increase. Bitcoin’s Open Interest, which shows how many contracts are active, has reached $63 billion. This is a record amount and is much higher than in 2021 when it was over $20 billion. Back then, Bitcoin’s price was at its highest, around $69,000. Source: Coinglass The derivatives market surge does pose risks however with volatility expected to be higher and price swings a more common occurrence. This is simply down to leverage with wild price swings likely to lead to an increase in liquidations. Over the past 24 hours, liquidations have totaled $450 million with around 60% of this coming from short positions. The old adage rings true for Bitcoin as well, ‘the trend is indeed your friend’. ETF Flows Surge Approaches $2 Billion in Three Days ETF flows have only increased over the past few days with a total nearing $2 billion over the period 18-20 November. Since November 1, Bitcoin ETFs have only experienced 5 days of outflows with 9 days of inflows. The rise in ETF adoption is likely to continue now given the hype around the Trump Presidency and his perceived pro crypto stance. If the ETF flows continue to grow it is likely that we have not seen the last of the current Bitcoin rally.   Source: Coinglass Technical Analysis BTC/USD Bitcoin (BTC/USD) is on a tear this week in particular, having traded just below $90k handle on Monday. Since then, we have had 3 consecutive days of gains boosted by a combination of factors. The difficult part about the technical outlook is that there is no historical price action to base any analysis off. As we discussed earlier in the article, there is the risk of swings due to the surge in the derivatives market. Looking at the RSI, it has been in overbought territory since Bitcoin has breached $75k. Another sign that despite the RSI being in overbought territory there is no guarantee that a pullback will materialize.  For now, immediate support is at 95000 with a break lower eyeing a move toward 91804 and then the 90000 psychological level. Looking at a move to the upside and the 100000 mark could lead to some wild price swings as market participants may eye some profit taking as well.  Beyond this at the moment, I will be keeping an eye on the round numbers/psychological numbers around 105000 and 110000.  Bitcoin (BTC/USD) Daily Chart, November 21, 2024 Source: TradingView.com (click to enlarge) Support 95000 91804 90000  Resistance 100000 105000 105000 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The Japanese yen has posted strong gains on Thursday. In the European session, USD/JPY is trading at 154.34, down 0.70% on the day. Ueda says rate decision will depend on data Bank of Japan Governor Ueda’s remarks are always closely monitored and often move the financial markets. That was the case today as the yen has posted sharp gains after Ueda’s comments at an event in Tokyo today. Ueda said that the BoJ would make its rate decisions “meeting by meeting” on the basis of the information available. Those comments certainly weren’t eye-opening, but Ueda also said that the BoJ would “seriously” review the impact of exchange rates on inflation and the economy and noted the yen’s sharp swings. The markets viewed Ueda’s remarks as a hint of a possible rate hike at the Dec. 19 meeting. The BoJ raised rates in July, partly in response to the weak yen. The central bank has often voiced concern about sharp movement from the yen and could hike again as early as December in order to boost the wobbly Japanese currency. The rise in inflation has hurt Japanese households and the coalition government is set to approve a massive $140 billion stimulus package to provide some relief. Prime Minister Ishiba is trying to stay in power with a fragile minority government and will need the opposition’s agreement to pass the bill. The spending bill will raise the already huge government debt and an interest rate hike would raise the cost of servicing the debt. USD/JPY Technical USD/JPY has pushed below support at 155.28 and is testing support at 154.68 1.5604 and 1.5664 are the next resistance lines  

The British pound has edged lower on Wednesday. In the North American session, GBP/USD is trading at 1.2653, down 0.21% at the time of writing. UK inflation higher-than-expected UK inflation rose to 2.3% year-on-year in October, compared to 1.7% in September and above the market estimate of 2.2%. The main drivers of the gain in inflation were higher housing and energy. Core inflation, which excludes energy and food items, inched upwards to 3.3%, up from 3.2% in September and above the market estimate of 3.1%. Services inflation, which has been a constant headache for the Bank of England, rose from 4.9% to 5%. Monthly, headline CPI climbed 0.6% in October, up from 0% in September and above the market estimate of 0.5%. Core inflation rose 0.4%, above the September gain of 0.1% and higher than the market estimate of 0.3%. The jump in the October inflation report is a disappointment for the BoE, which has largely contained inflation after bringing it down from double-digits in early 2023. The markets have pared down the probability of a rate cut at the Dec. 19 meeting to around 16% as a result of the inflation report. The BoE has lowered rates twice this year as part of its easing cycle but will need to see inflation resume its downswing before it feels comfortable resuming rate cuts. The BoE is also concerned about the government ‘s new budget. Governor Bailey said the central bank would take a “gradual approach” to lowering interest rates as it assesses the inflationary effect of the budget. The budget is aimed at boosting economic growth but this will likely raise inflation in the near term, which could result in a slower pace of rate cuts. GBP/USD Technical GBP is testing support at 1.2662. The next support line is 1.2634 1.2711 and 1.2739 are the next resistance lines

UK Inflation rises to a 6-month high of 2.3% in October, driven by services inflation. GBP/USD faces downside pressure but could rally if the daily candle closes above 1.2680. GBP/JPY shows mixed technical signals with a potential for upside in the short term. Most Read: Gold Price Analysis: Is the $2,600 Breakout a Bullish Signal or a Temporary Retracement? The GBP received a shot in the arm this morning owing to an uptick in UK inflation data. Market participants immediately repricing their rate cut expectations down to around 59 bps through December 2025, from a previous 65bps. The impact on the GBP was immediate with a 40-odd pip rally for GBP/USD and around 80 pips for GBP/JPY.  For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge) UK Inflation Challenge The UK continues its battle with inflation, and more importantly services inflation which ticked up slightly from September with a print of 5% vs the prior month’s 4.9%. The increase in headline inflation might also be a concern now as the annual inflation rate rose to 2.3% in October 2024, the highest in six months, compared to 1.7% in September. Markets were expecting an uptick in headline inflation to around 2.2% while the MoM inflation number came in at 0.6% above the estimated 0.5% as well. The concern however remains with the service inflation number which is keeping headline inflation elevated.  Looking more closely at the data and a lot of the stickiness in the October number comes from categories that the Bank considers less important or less likely to show lasting inflation. This would include things like rent, airfares and package holidays which could in part explain the uptick in services inflation. A good example of this is when looking at the core services inflation which strips out the data of rent and airfare and we have an entirely different narrative. Given there is no single definition for this, however it has been aptly broken down by ING Think which showed the ‘core services number’ had actually dropped from 4.8% to 4.5% in October. Source: ING Think This does not change a thing for the BoE when it comes to the upcoming December policy meeting. I still expect a 25bs cut following the recently released GDP numbers from the UK. Growth is beginning to turn sour, much like the European Union. This is something the BoE would like to avoid and in my opinion may factor heavily at the December meeting.  Based on probabilities, market participants are now pricing in around an 85% chance of a hold at the December 19 meeting with a possible rate cut in February given a 50% chance. This should in theory lend some support to the GBP as the US is expected to cut in December and the Bank of Japan is likely to continue hiking rates in 2025. Will such a move and a GBP recovery come to fruition? Technical Analysis GBP/USD From a technical standpoint, GBP/USD rose in the early part of the week but failed to hold onto any material gains. The weakness in the US Dollar Index did not yield any significant gains for the GBP and with the DXY looking at a recovery today, Cable may face further downside pressure. At present the key level around the 1.2680 handle is proving a tough nut to crack with UK inflation data helping the GBP/USD to break above this level but failing to find acceptance. If a daily candle close above this handle occurs, bulls may be emboldened which could push cable higher.  A move above the 1.2680 handle may face resistance at 1.2750 and 1.28200 (which is where the 200-day MA rests). The next key hurdle for bulls will be the 1.3000 psychological level which may prove to be a hurdle too far. Looking at the potential for a break to the downside and the most recent swing low at 1.2600 will be the first area of support before the 1.2500 and 1.2450 handles come into focus.  The driving force behind any move is likely to come from the US Dollar Index (DXY) and its performance in the coming days. Further US Dollar strength could facilitate a retest of the 1.2500 handle. GBP/USD Daily Chart, November 20, 2024 Source: TradingView.com (click to enlarge) Support 1.2600 1.2500 1.2450 Resistance 1.2680 1.2750 1.2820 GBP/JPY GBP/JPY has been inching its way lower since topping out just shy of the psychological 200.00 handle. A pullback helped yesterday by renewed safe haven flow also helped GBP/JPY push further away from the 200.00 handle. Looking at the technicals and we have some mixed signals. We have a death cross formation as the 100-day MA crossed below the 200-day MA hinting at downside momentum. The candlesticks on the other hand show a sharp rejection following the brief stint below the MAs yesterday with the daily candle finishing as a hammer candlestick hinting at further upside.   The mixed signals do not make it easier, however when combining this with the fundamentals, further upside seems more likely in the short-term. The question is will the 200.00 handle prove a step too far for bulls? A move higher from current prices for GBP/JPY could face resistance at 198 and 199.30 respectively. A move lower will first require a daily candlestick close below the two MAs resting around the 194.30-194.60 range. A break of this zone could push GBP/JPY toward the 192.50 and 190.00 handles respectively. GBP/JPY Daily Chart, November 20, 2024 Source: TradingView.com (click to enlarge) Support 194.30 (200-day MA) 192.50 190.00 Resistance 198.00 199.30 200.00 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The British pound is steady on Tuesday. In the North American session, GBP is trading at 1.2678 at the time of writing, unchanged on the day. On Monday, the pound ended a six-day slide, during which the currency lost 2.8%. Markets brace for higher UK inflation The Bank of England has done an excellent job slashing inflation, which was in double digits for much of 2023. The September inflation report was a milestone as inflation eased to 1.7%, the first time it was below the BoE target of 2% since April 2021. Still, the BoE is under no illusions that the tenacious battle against inflation is over. Services inflation has fallen significantly but is running at 4.9%, more than double the target. The Trump election win has raised deep concerns that Trump’s trade policy promises, with threats of tariffs on US trading partners, could lead to higher global inflation. The BoE lower rates by 25 basis points on Nov. 7, marking the second rate cut in the current easing cycle. The September inflation report contributed to the decision to lower rates at that meeting and Wednesday’s inflation release will be closely monitored by the BoE, with the following inflation report coming out on Dec. 18, just one day before the BOE’s next rate announcement. BoE Governor Bailey said in a report to the House of Commons Treasury select committee that the BoE needed to keep a close eye on services inflation, which remained above a level that was compatible with “on target inflation”. Bailey also stated that he favored a gradual approach to cutting rates in order for the central bank to assess the effects of the government’s recent budget on growth and inflation. The BoE’s November forecasts indicate that the budget will result in higher growth and inflation in the near term, which could slow the pace of rate cuts. GBP/USD Technical There is resistance at 1.2707 and 1.2736 1.2629 and 1.2658 are the next support levels

The Canadian dollar is higher on Tuesday. In the North American session, USD/CAD is trading at 1.3975 at the time of writing, down 0.29% on the day. Canadian inflation hits 2%, higher than expected Canada’s inflation rate rose to 2% y/y in October, higher than the 1.6% gain in September, which was a three-year low. This was above the market estimate of 1.9%. The increase was largely driven by a smaller drop in gasoline prices compared to September. Monthly, inflation rose 0.4%, after a 0.4% decline in September and higher than the market estimate of 0.3%. Core inflation, which excludes energy and food, also moved higher in October. The two key core indicators climbed to an average of 2.55% y/y, up from 2.35% in September. Services inflation, which has been a headache for the Bank of Canada, eased to 3.6%, its lowest level since January 2022. How will the Bank of Canada respond to the inflation report? Today’s inflation report takes on added significance as it is the last inflation release before the BoC’s next rate decision on Dec. 11, the last one of the year. The BoC has shown that it can be aggressive as it chopped rates by 50 basis points in October. The slightly-hotter-than expected inflation release has made another 50-bp cut at the December meeting less likely. The BoC appears intent to continue cutting rates as long as there are no surprises from inflation or the labor market and the markets have priced in about a 60% chance of a 25-bp cut at the next meeting. USD/CAD Technical USD/CAD has pushed below support at 1.4004 and is testing support at 1.3978 There is resistance at 1.4033 and 1.4059

The Australian dollar is showing limited movement on Tuesday. In the European session, AUD/USD is trading at 0.6501, down 0.14% on the day. The Aussie flew out of the gates on Monday, climbing 0.75%. RBA minutes: No rush to cut rates The Reserve Bank of Australia has maintained its cash rate at 4.35% over the past year, making it an outlier among other major central banks that are in the midst of a rate-cutting cycle. The RBA released the minutes of the meeting earlier this month, which indicated that policymakers are not in any rush to lower rates. The minutes stated that the Board considered underlying inflation to be “too high” and it did not expect inflation to return sustainably to the 2%-3% target range until 2026. The Board remained “viligant to the upside risks of inflation” and that “it was not possible to rule anything in or out in relation to future changes in the cash rate target”. That is a long way of saying that the Bank has not ruled out rate cuts or hikes. The minutes reiterated that the Board’s highest priority is returning inflation to target. Given that the Board stated that inflation remains too high and goods inflation is expected to rise, the message from the minutes is that a rate cut is not imminent. The minutes served as a message to the markets that the RBA is willing to maintain rates unless inflation falls unexpectedly. The RBA meets next on Dec. 10 and is expected to hold rates. AUD/USD Technical AUD/USD tested support at 0.6489 earlier. Below, there is support at 0.6467 0.6530 and 0.6552 are the next resistance lines

The Japanese yen is lower on Monday. In the European session, USD/JPY is trading at 155.08, up 0.51% on the day. Ueda says ‘maybe’ to rate hike Bank of Japan Governor Ueda sent mixed signals about a rate hike in December, leaving investors unclear and sending the yen lower against the US dollar. Ueda said that the timing of a rate hike depended on economic conditions. He noted that there was progress towards sustained inflation from higher wages and consumption, but warned that there were “numerous uncertainties” that the Bank would have to monitor, such as the impact of President-elect Trump’s economic policies. Ueda said that the central bank wouldn’t wait for all uncertainties to clear up before a hike and that the timing would depend on the “economic, price and financial outlook”. The lack of clarity from Ueda wasn’t all that surprising as the BoJ is not transparent with its rate plans, which results in strong volatility whenever the BoJ makes a rate move. Ueda’s comments didn’t change market expectations, as the pricing of a rate hike in December is around 55%. A strong rise in inflation or a significant decline in the yen would support a rate hike at the December meeting. US retail sales stronger than expected The week ended on a positive note as US retail sales were better than expected in October. Retail sales rose 0.4% m/m, better than the market estimate of 0.3% and the September reading was revised from 0.4% to 0.8%. 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”. USD/JPY Technical USD/JPY is testing resistance at 156.07. The next resistance line is 157.86 154.97 and 153.18 are the next support levels

EUR/USD faces pressure due to a strong US Dollar and concerns about the ECB’s policy direction. The US election and potential trade war concerns are weighing on the Euro. The interest rate differential between the Fed and ECB is a key factor to watch. Most Read: Markets Weekly Outlook – PMI Data, UK Inflation and the Soft Landing Conundrum The US Dollar bulls continue to hold firm at the start of the week following signs that some weakness may materialize. So far this has proven to be false, as Asian session declines were immediately wiped out following the European.   ECB Policymakers Send Mixed Signals The US election has raised concerns for the EU regarding a potential trade war, and its impact on the Euro Area. Mixed messaging from ECB policymakers this morning has kept EUR/USD under pressure following an attempted rally at the start of the European session. Markets will no doubt be eyeing a speech by ECB President Christine Lagarede this evening in Paris for clues as to how the ECB views the potential impact of a Trump Presidency. Earlier in the day, ECB Vice President Luis de Guindos said that the main worry has moved from high inflation to concerns about economic growth. A trade conflict between the Eurozone and the US could start after Trump said in his campaign that the Eurozone would face serious consequences for not purchasing enough American goods. Rate Differential Concerns Grow Following another bout of strong US data last week and an uptick in US PPI numbers, markets continue to price in less cuts from the Federal Reserve. This has kept the USD underpinned at a time when the ECB is dealing with disappointing growth and the possibility of more aggressive rate cuts.  As things stand, the ECB is scheduled to cut rates as much as 140+ bps through December 2025, the Fed are only expected to cut around 70+ bps. This is a massive discrepancy and if this gap continues to grow, the chances of further losses for EUR/USD will rise.  ECB and Federal Reserve Implied Rates – December 2025 ECB FED Source: LSEG Looking ahead to the rest of the week, US and EU PMI data will be key. For the Euro Area more so than the US as concerns linger around growth moving forward. A disappointing PMI print for the EU will keep the Euro on the back foot. The US PMI data will have markets focused on performance as well, largely to see if the US economy is as strong as recent data suggests. Job creation in the sector might also be of interest given the up and down payroll figures and downgrades in the US.  For a full breakdown of the week ahead and key economic data releases, read the Weekly Market Outlook now. For all market-moving economic releases and events, see the MarketPulse Economic Calendar. Technical Analysis of EUR/USD From a technical standpoint, EUR/USD is holding above the key psychological handle at 1.0500. An inverse hammer candle close on Friday hinted at further upside today, but there remains significant downward pressure on the pair. This is evidenced by the failure of the pair to hold onto gains with early European session largely wiped out already in a similar vain to Friday. The positive is that EUR/USD continues to hover around oversold territory on the RSI period 14. This of course not a guarantee of a move higher but a sign that attention should be paid for a potential reversal. Immediate resistance rests at the 1.0600 and 1.0700 handles respectively before a potential retest of the descending trendline around the 1.0755 handle comes into focus. A move lower here and a break of the 1.0500 handle faces support at 1.0450 before support at 1.0366 becomes a possibility. EUR/USD Daily Chart, November 18, 2024 Source: TradingView.com Support 1.0500 1.0450 1.0366 Resistance 1.0600 1.0700 1.0755 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The Australian dollar is steady after a five-day slide, which saw the currency fall by 3.5% during that period. In the European session, AUD/USD is trading at 0.6471, up 0.28% on the day. China retail sales beats expectations China retail sales, a key indicator of domestic consumption, jumped 4.8% y/y in October, up sharply from 3.2% in September and above the market estimate of 3.8%. This was the fastest pace of growth since February. Retail sales received a boost from a week-long holiday an significant government stimulus measures in September to boost the  struggling economy. This included a cut in interest rates and easing restrictions on borrowing for purchases of stocks and houses.  These measures are unlikely to be sufficient to turn the economy around, and Bejing is under pressure to take further moves, such as additional monetary easing. Good news in China is music to the ears of Australian exporters, as China is Australia’s largest trading partner. If Chinese demand for Australian goods increases, it should boost the Australian dollar, which has been hammered by the US dollar and has plunged 6.4% since October 1. The Reserve Bank of Australia has held its cash rate for 4.35% for eight straight meetings and has become an outlier among the major central banks, most of which have cut rates in response to lower inflation. The RBA is under pressure to cut rates as inflation fell in the third quarter to 2.8%, down from 3.8% in Q2, its lowest rate since the first quarter of 2021. The RBA noted at its November meeting that headline inflation has declined considerably but that underlying inflation remains too high. The RBA holds its final meeting of the year on Dec. 10 and is widely expected to maintain rates. If inflation continues to fall, we can expect a rate cut early in 2025. The US dollar  has looked sharp this week against the major currencies and could add to its gains if today’s retail sales report beats expectations. The markets expect October retail sales to rise to 1.9% y/y, up from 1.7% in September. Monthly, retail sales are expected to inch lower to 0.4% from 0.3%. AUD/USD Technical AUD/USD is testing resistance at 0.6465. The next resistance line is 0.6488 0.6431 and 0.6408 are the next support levels

The British pound has stabilized on Friday after four straight losing sessions. In the European session, GBP is trading at 1.2666, up 0.02%. It has been a miserable week for the pound, which is down 1.9%. The pound fell as low as 1.2629 on Thursday, its lowest level since early July. UK GDP declines 0.1% The UK economy surprised on the downside with a contraction of 0.1% m/m in September, after a 0.2% gain in August and below the market estimate of 0.2%. This was the first decline in five months. Quarterly, the economy expanded by only 0.1% in the third quarter, its weakest pace in three quarters. This followed the 0.5% gain in Q2 and missed the market estimate of 0.2%. The services sector grew by just 0.1%. The GDP data will be a major disappointment to the new Starmer government, which has promised to kick-start the UK economy. After solid growth in the first half of the year, the economy fell with a sharp thud, with weak consumer and business confidence dampening economic activity. The Bank of England will be keeping a close eye on the GDP data, with its next meeting on Dec. 19, the last meeting of the year. The BoE shaved rates by a quarter-point earlier this month and weak GDP will support the case for a rate cut at the December meeting. US retail sales expected to improve The US closes the trading week with retail sales, which are expected to have improved in October. The market estimate is 1.9%, compared to 1.7% in September.  Consumer spending has been generally strong and consumer confidence should improve now that the uncertainty over the US election is over. GBP/USD Technical GBP/USD tested resistance at 1.2674 earlier. The next resistance line is 1.2719 1.2578 and 1.2527 are the next support levels

The Japanese yen is in positive territory today, putting the brakes on a four-day skid. In the European session, USD/JPY is trading at 155.54 down 0.45% on the day. Japan GDP climbs 0.9% Japan’s economy expanded by 0.9% in the third quarter, below the revised 2.2% gain in Q2 but above the market estimate of 0.7%. Quarterly, GDP rose 0.2%, lower than the 0.5% gain in Q2 and matching expectations. The GDP numbers were not sparkling but point to a second straight quarter of growth. August economic activity was dampened due to a “megaquake” alert and a fierce typhoon which caused widespread destruction and disruption. Private consumption, which comprises more than half of the country’s GDP showed strong growth of 3.6% y/y, despite the weather issues. This is an encouraging sign for the Bank of Japan, which wants to see inflation rise to demand and consumption. The BoJ has been vague about the timing of a rate hike but the markets are looking at December or January as likely dates. The yen has been wobbly and is down 2.3% in November. If the yen’s downswing continues, the BoJ could decide to hike rates at the Dec. 19 meeting. There is also the possibility of the Ministry of Finance intervening in the currency markets if the yen declines sharply. The US wraps up the week with retail sales for October, with a market estimate of 1.9%. Retails sales eased to 1.7% y/y in September, which was an 8-month low. Monthly, retail sales are expected to inch up to 0.4% from 0.3%. Consumer spending has been generally strong and consumer confidence should improve now that the uncertainty over the US election is over. USD/JPY Technical USD/JPY has pushed below support at 1.5601 and is testing 1.5560. The next support line is 1.5493 1.5668 and 1.5709 are the next resistance lines

The Japanese is lower for a fourth straight trading day and has declined 2.1% during that time. In the North American session, USD/JPY is trading at 155.85 up 0.25% on the day. Japan GDP expected to decelerate in Q3 The markets are braced for a sharp slowdown in third-quarter GDP, which will be released early Friday. The market estimate stands at 0.7% y/y, compared to a revised 3.1% in the second quarter. On a quarterly basis, GDP is expected to ease to 0.2%, following a revised 0.7% gain in Q2. The strong GDP numbers in the second quarter reflected wage negotiations in the spring which resulted in sharp wage increases and a recovery in the auto industry. The BoJ meets next on Dec. 19 and key data such as the GDP release and inflation will be important factors ahead of the meeting. As well, wages have been rising which could translate into increased consumer spending and demand-driven inflation. In the US, the Producer Price Index (PPI) rose in October to 2.4% y/y, up from a revised 1.9% gain in September. The core rate also rose to 3.1% from a revised 2.9% in September. The increase in PPI comes on the heels of consumer inflation (CPI) which rose from 2.4% y/y to 2.6%. The core rate remained unchanged at 3.3%. The Federal Reserve is unlikely to change its plans due to the rise in inflation, which had decelerated for six straight months. The path of inflation can be bumpy and Fed policymakers won’t be losing sleep over a single monthly increase. If inflation accelerates next month, however, there will be some concern and we could hear calls for an oversized half-point cut in December. USD/JPY Technical USD is testing resistance at 155.95. Above, there is resistance at 1.5643 There is support at 155.15 and 154.67

Wall Street experiences choppy trading as investors await Fed Chair Powell’s speech. Nasdaq 100 and S&P 500 react to mixed earnings reports, with Disney surging and Cisco declining. US PPI data shows a slight uptick, raising concerns about potential inflationary pressures. Most Read: Bitcoin’s (BTC/USD) Bull Run: On-Chain Data Signals New Demand, $100k in Sight? Wall Street Indexes continue their choppy price action which has been a feature this week. It is not a huge surprise given the moves we witnessed after the US election which sent the S&P 500 and Nasdaq 100 to fresh all-time highs. US CPI data yesterday came out largely in line with expectations with some whipsaw price action in the aftermath. Markets did however increase their bets on a rate cut for December but the 2025 outlook on rate cuts remains up in the air. Markets are now only pricing in around 77bps of cuts between now and the end of December 2025. US PPI data was released a short while ago and saw a slight uptick last month with the headline PPI number coming in above the 1.9% forecast at 2.4% YoY. The MoM Core print also ticked up slightly to 0.3% vs expectations of 0.2%. Is this a warning that price pressures may slowly be returning? Continuing jobless claims numbers came out in line with forecasts around the 1.873m with the initial jobless claims number coming in just under forecasts. Rate cut expectations saw a marginal change in the aftermath with markets still expecting a December cut.  Fed Chair Powell will also be speaking later in the day as he provides an updated economic outlook to business leaders in Dallas. I’m sure many leaders will be keen to hear more from the Fed Chair on his views around inflationary risks which have returned to the conversation post election. Further comments are also expected from Fed policymakers Barkin and Williams later in the day. NASDAQ 100 Heatmap Source: TradingView Looking at the earnings picture and Walt Disney DIS.N shares rose around 6.5% after earnings beat estimates. The company reported an adjusted earnings per share (EPS) of $1.14, surpassing the estimated $1.10. Total revenue reached $22.57 billion, slightly exceeding expectations of $22.47 billion. The company also saw impressive growth in its subscriber base, boasting 122.7 million subscribers compared to the anticipated 119.85 million. Revenue from the entertainment segment came in at $10.83 billion, outpacing the projected $10.66 billion, while the experiences segment generated $8.24 billion, marginally above the forecasted $8.2 billion. Looking ahead, the company anticipates high single-digit growth in adjusted EPS for the fiscal year 2025, exceeding the estimated 4% growth. Cisco’s CSCO.O stock fell by 3.3% after the company announced that its expected annual revenue would be about the same as predicted, following their report on Wednesday. Technical Analysis  S&P 500 From a technical standpoint, the S&P 500 has been confined to a tight trading range this week having rallied some 4.72% last week to breach the 6000 handle.  Since however, the S&P 500 has failed to kick on as the last batch of earnings filter through. The triangle pattern breakout is still in play with target 1 around the 5910 handle already being breached. The pattern’s optimal target lies around the 6170 mark which could still materialize.  On the downside 5910 and 5860 are key support areas should the pullback deepen.  Conversely, a move higher faces little resistance with the recent highs being key at around 6028 before 6100 and lastly, 6170.  S&P 500 Daily Chart, November 14, 2024 Source: TradingView (click to enlarge)  Support 5910 5860 5757 Resistance 6028 6100 6170 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The Australian dollar is lower for a fifth straight trading day. In the European session, AUD/USD is trading at 0.6467, down 0.27% on the day. The Australian dollar has been a dreadful slide and has plunged 6.4% since Oct. 1. Australia’s employment decelerates Australian’s employment report in October was lukewarm. Employment increased by 15.9 thousand, down from 61.3 thousand in September and shy of the market estimate of 25 thousand. The unemployment rate remained unchanged at 4.1%. The labor market remains in solid shape despite sticky inflation and high interest rates which have dampened economic activity. Overshadowed by the employment report, inflation expectations dropped to 3.8% in November from 4% in October. This was the lowest level since October 2021. This drop is reflective of the downswing in inflation, which dropped to 2.8% in the third quarter, the lowest level in 14 quarters. The Reserve Bank of Australia has held its cash rate for 4.35% for eight straight meetings. The RBA noted at its November meeting that headline inflation has declined considerably but that underlying inflation remains too high. The RBA holds its final meeting of the year on Dec. 10 and is widely expected to maintain rates, which means that a long-awaited initial rate cut will have to wait until 2025. In the US, the October consumer inflation report showed a gain of 2.6% y/y, up from 2.4% in September. The Federal Reserve isn’t too worried that inflation has accelerated for the first time in seven months, as the inflation’s path isn’t expected to be always smooth. The Fed is widely expected to lower rates by a quarter-point at the December meeting and continue trimming in 2025. AUD/USD Technical AUD/USD is testing support at 0.6462. Below, there is support at 0.6438 0.6504 and 0.6528 are the next resistance lines

Trump Trade of a stronger US dollar and rapidly rising longer-term US Treasury yields have triggered a negative feedback loop into Gold (XAU/USD) The longer-term positive aspect of Gold as a hedge and safe haven asset play to counter a potential wider US federal budget deficit will now take a backseat. Watch the US$2,484/US$415 support on Gold (XAU/USD) This is a follow-up analysis of our prior report published “Gold Technical: Bullish acceleration in progress reinforced by “Trump Trade” on 22 October 2024. Click here for a recap. Since our last publication, Gold (XAU/USD) has rallied as expected and hit a fresh all-time intraday high of US$2,790 on 30 October. The up move has stopped short of the highlighted US$2,850/886 key medium-term resistance zone. The strong US dollar and rising 10-year Treasury yield are headwinds for Gold Fig 1: 10-year US Treasury yield medium-term & major trends as of 14 Nov 2024 (Source: TradingView, click to enlarge chart) After the outcome of the US presidential election on 6 November, market participants continued to focus on the Trump Trade that triggered a significant rally in the US dollar against the major and emerging currencies. The US Dollar Index rose sharply, broke above a major resistance zone of 105.50/106.37, and hit a year-high high on Wednesday, 13 November. All in all, it has recorded a gain of 7% from its 27 September low to Thursday, 14 November current intraday value of 106.96 at this time of the writing. The current persistent strength seen in the US dollar has been primarily attributed to a rapid rise in the 10-year US Treasury yield despite the US Federal Reserve has just started its interest rate cut cycle in September. The bond vigilantes have likely started to price in a possible scenario that the current Fed’s interest rate cut cycle is likely to be a short and shallow one where the Fed may only cut once or twice next year in 2025 due to the risk of a resurgence of higher inflationary expectations caused by Trump’s proposed policies of deep corporate tax cuts and higher trade tariffs on China and the rest of the world’s exports to the US. The 10-year US Treasury yield has rallied by 85 basis points since its 17 September low and may be poised for a potential major bullish breakout above 4.49% that can potentially eye the major resistance of 5.20% next (see Fig 1). If such a bullish scenario arises on the 10-year US Treasury yield, market participants may choose to focus their attention on the negative short-term aspect of Gold caused by a strong US dollar and a further rise in the 10-year US Treasury yield that increases the opportunity costs of holding Gold as it is a non-fixed income asset. The longer-term positive aspect of Gold as a hedge and safe haven asset play to counter a potential wider US federal budget deficit caused by Trump’s “generous” corporate tax cuts policy, in turn, a catalyst for an erosion of confidence in the demand for US Treasuries has now taken a backseat. The bearish break of US$2,590 sees further potential weakness in Gold Fig 2: Gold (XAU/USD) medium-term & major trends as of 14 Nov 2024 (Source: TradingView, click to enlarge chart) Gold (XAU/USD) broke decisively below a key medium-term support zone of US$2,600/US$2,590 on Wednesday, 13 November. Earlier this week on Monday, 11 November, it broke below its 50-day moving average that held its price actions in the past four months since 3 July which suggests that its medium-term uptrend phase has been damaged (see Fig 2). The next support zone to watch will be at US$2,484/US$415 (also coincides with the key 200-day moving average), and only a clear break with a weekly close below the US$2,285 long-term pivotal support is likely to put the major uptrend phase of Gold (XAU/USD) in place since October 2022 low in jeopardy. On the other hand, clearance above the 2,664 key medium-term pivotal resistance may ignite the bullish tone for the resurgence of a fresh impulsive upmove sequence to set sight again on the US$2,850/US$2,886 resistance zone in the first step.

The British pound continues to lose ground and is down for a fourth straight trading day. In the North American session, GBP/USD is trading at 1.2709, down 0.18% on the day. Earlier, the pound dropped below the 1.27 line for the first time since Aug. 8. US CPI rises to 2.6% US inflation has been on a prolonged downswing but that streak has ended. After decelerating for six straight months, headline CPI for October rose to 2.6% y/y, up from 2.4% in September. The US dollar has responded with modest gains against the major currencies. Monthly, headline CPI was unchanged at 0.2%, in line with expectations. The core rate was unchanged in October, at 3.3% annually and 0.3% monthly, which matched expectations. The jump in inflation may not have been a surprise, but market rate-cut odds have jumped sharply. Just a day ago, the markets had priced in a 58% probability of a cut in December, but this has surged to 82% currently, according to CME’s FedWatch. Inflation is largely contained but by no means defeated. The Federal Reserve has waged a tough battle and is no mood to see inflation rebound. The next inflation report will be released just one week ahead of the Dec. 18 rate meeting and if inflation again moves higher, it’s possible that the Fed will respond with an oversized 50-basis point cut. Another headache for the Federal Reserve could be the Trump election win, with the Republicans winning the Senate and likely the House of Representatives. The incoming Trump administration represents an upside risk to inflation, as President-elect Trump has promised sweeping tariffs on imports, notably China and Europe. If Trump makes good on his tariff threat, goods imported into the US will become more expensive which would boost inflation. That could complicate the Fed’s plans to continue trimming rates in 2025. GBP/USD Technical There is resistance at 1.2781 and 1.2843 There is support at 1.2685 and 1.2683

Bitcoin’s Bull Run: On-Chain Data Signals New Demand, $100k in Sight? On-chain data analysis suggests a new wave of demand for Bitcoin. Institutional adoption of Bitcoin continues, with BlackRock’s Bitcoin ETF holdings surpassing its Gold ETF. Most Read: USD/CAD Outlook: 1.4000 Remains Elusive as US CPI Fails to Inspire Breakout Bitcoin prices have continued their impressive run today breaching the 90000 mark for the first time. The world’s largest cryptocurrency is now up around 30% since election day and a 121% YTD as the new generations ‘digital gold’ continues its ascent.   The greed around crypto markets is evident at present, can you blame the hodlers? There does seem to be somewhat of a generational shift when it comes to investment flows and this has been reflected in recent data. BlackRocks Bitcoin ETF has now surpassed the holdings of its Gold ETF and this switch could in part explain the struggles of the precious metal as the new digital Gold grows in popularity. It would be unwise to dismiss this as we have seen in 2024 that the world’s largest cryptocurrency appears to be less volatile than in the past. The reason for this has been touted as institutional adoption which could be part of it.  Source: FinancialJuice (click to enlarge) ETF Flows Soar  Bitcoin ETFs have seen remarkable inflows over the past week. The last two days however saw close to $2 billion dollars of inflows, led largely by the IBIT ETF. The continuation of ETF flows will be a comfort for fund managers and institutions in particular with market participants expecting less volatile swings as mainstream adoption continues to increase. Can the inflows continue? Source: CoinMarketCap (click to enlarge) On-Chain Data Analysis – New Demand Wave Incoming? Looking at on-chain data analysis from Glassnode, In March, there was a big surge in profit-taking, reaching over $3.1 billion. Over the past seven months, as the market settled, both profits and losses balanced out. This indicates that supply and demand have reset. Now, we’re noticing an increase in profit-taking again, hinting that new demand is coming into the market. We can see changes in the market by looking at the difference between profits and losses. Right now, the market is mostly about profits, with profits being about 47 times bigger than losses. This shows that there are very few people holding Bitcoin at a loss as the market climbs to a new all-time high. Could we see a surge in profit taking that could scupper the rally? Source: Glassnode (click to enlarge) President Trump Plans The US President Elect Donald Trump is already making moves ahead of assuming office on the 20 January 2025. Markets have been buoyed by Trump’s victory with Crypto in particular benefiting. Markets are eyeing looser regulations under Trump, while Elon Musk has suggested the US Government use Bitcoin to help tackle outrageously high US debt levels. In the coming weeks any further developments and comments by incoming members of Trump’s team may have a knock on effect for crypto. Interesting times ahead indeed. Technical Analysis BTC/USD Bitcoin is trading around 5% higher on the day having breached the $90k barrier.  Its is becoming extremely difficult to do any technicals as there is a lack of historical price action. On the upside i will pay attention to the round numbers like $95k before the 100k becomes a real possibility. The downside at least leave something to look at. BTC/USD is trading in overbought territory with the RSI currently in the mid 80’s. Now of course we know that just because the RSI is in overbought territory it does not mean that a sell is imminent but worth paying attention to. Support on the downside may be found at 90000 before 88884 and 86334 come into focus. Lower down we have the 85000 handle and and the 81500 handle to focus on. Bitcoin (BTC/USD) Daily Chart, November 13, 2024 Source: TradingView.com (click to enlarge) Support 90000 88884 86334  Resistance 95000 100000 105000 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

USD/CAD surges as oil prices decline and US Dollar rises. Market anticipates less rate cuts in 2025 due to Trump’s return, impacting interest rate differentials. Potential US tariffs add headwinds for the Canadian Dollar. Most Read: Brent Oil Prices Steady Despite OPEC Demand Forecast Cut. Where to Next? USD/CAD has been on a tear since the back end of September, rising some 550 pips over the past 6 weeks. The move coincided with a stronger US Dollar and weaker Oil prices. Oil Continues to Weigh on the Canadian Dollar The Canadian Dollars struggles since the back end of September have coincided with a weaker Oil price. Oil prices have faced significant headwinds over the past few months as expectations around demand continue to be downgraded. Just yesterday OPEC announced its fourth consecutive downgrade to its demand forecasts, with China cited as the primary reason.  Interest Rate Differentials Coming Into Play? The US Election is out of the way and with Donald Trump scheduled to return to the White House on January 20, 2025 markets are already pricing in less rate cuts in 2025. This has left the possibility of interest rate differential coming into play.  As things stand, markets are pricing in around 77 bps of cuts by the Fed and around 91 bps from the Bank of Canada. This leaves the Canadian Dollar in a vulnerable position as Trump is yet to take office. If President Elect Trump moves forward with tariffs and inflationary risks do rear their head, the rate differential could widen adding further headwinds for the Canadian Dollar. On Tuesday, Neel Kashkari, the President of the Minneapolis Fed, said the central bank is still confident in fighting temporary inflation, but it’s too soon to say they’ve completely won. He also mentioned that the Fed won’t predict how Trump’s policies will affect the economy until they have more details about those policies. The calendar is quiet this week from Canada but today we just had US Inflation data which came out in line with forecasts. The impact was rather muted but it did firm up rate cut expectations for the Fed at the December meeting.  For all market-moving economic releases and events, see the MarketPulse Economic Calendar. Technical Analysis USD/CAD has been consolidating for the last two trading weeks in a 100 pip range between the 1.3850 and 1.3950 handles. Historically USD/CAD tends to follow up periods of consolidation with significant swing moves in either direction. This means that USD/CAD could be poised for a significant breakout in the days ahead. The 1.4000 handle remains elusive at this point and given that US Inflation barely moved the needle, the case for a retracement before a push toward the 1.4000 handle looks appealing. However, any pullback may be seen as an opportunity for would be bulls to get involved. Immediate support rests at 1.3900 before the 1.3854 and 1.3793 come into focus. Conversely a break above recent highs at 1.3956 could finally open up a break of the psychological 1.4000 barrier with resistance resting around the 1.42500 handle. USD/CAD Daily Chart, November 13, 2024 Source: TradingView (click to enlarge) Support 1.3900 1.3854 1.3793 Resistance 1.3958 1.4000 1.4250 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda