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

The euro is lower for a fourth straight trading day and has deUS clined 0.10% on the day, trading at 1.0612 at the time of writing. Earlier today, the euro dropped below the 1.06 line for the first time since November 2023. US CPI expected to rise to 2.6% The US releases the October inflation report later today. Headline CPI is expected to rise to 2.6% y/y, up from 2.4% in September. The monthly rate is projected to remain at 0.2%. The core rate is also expected to stay unchanged from September, at 3.3% y/y and 0.3% m/m. If headline inflation moves higher as expected, the markets could respond by trimming the probability of a rate cut at the Dec. 18 meeting. The current market pricing for a 25-basis point cut is 58%, down from 68% a day ago. This means that investors are not sold on a rate cut at the final meeting of the year. The US economy is in good shape but underlying inflation remains above the 2% target and the labor market has been cooling. Today’s inflation report could be a key factor in the rate decision at the December meeting. Will ECB lower rates in December? 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. The most recent development which the ECB must contend with is the Trump election win, which could mean US tariffs on European goods. Governing Council member Robert Holzmann said on Tuesday that if Trump enacted tariffs, the US dollar would rise against the euro and that would put upward inflation on eurozone inflation and make it more difficult for the ECB to achieve its 2% target. EUR/USD Technical EUR/USD is testing resistance at 1.0627. Above, there is resistance at 1.0659 1.0591 is the next line of support, which has held since November 2023. Below, there is support at 1.0559

OPEC cuts oil demand growth forecasts for 2024 and 2025, citing concerns about the Chinese economy. China’s stimulus measures have failed to impress, and the country’s economic outlook remains a concern. Technical analysis suggests that oil prices are eyeing a bounce but could face resistance around $74.00 and $76.35. Most Read: Gold (XAU/USD) Prices Slide as US Dollar (DXY) Rally Continues Oil prices are holding firm today following a 5% decline over the previous two trading days. A stronger US Dollar and hopes of a Middle East peace deal have also weighed on Oil prices as markets digest the potential impacts from a Trump Presidency. OPEC Cuts Demand Forecast for 2024 and 2025 OPEC released its monthly report today which showed a fourth consecutive downgrade of its forecast for both 2024 and 2025. OPEC said world oil demand would rise by 1.82 million barrels per day in 2024, down from growth of 1.93 million bpd forecast last month. For 2025, OPEC estimated global demand growth at 1.54 million bpd from 1.64 million bpd. Continuing on from last month, China was the main factor in the economic downgrade for 2024. OPEC lowered its prediction for China’s oil demand growth to 450,000 barrels per day, down from 580,000 barrels per day. Furthermore, China’s diesel consumption dropped in September compared to the same time last year, continuing a seven-month trend of decreases. On China OPEC stressed that Diesel has been under pressure from a slowdown in construction amid weak manufacturing activity, combined with the ongoing deployment of LNG-fuelled trucks. China has been a point of concern for the majority of 2024 and even more so when it comes to Oil demand.  This downgrade comes soon after OPEC + announced it would not unwind the most recent layer of cuts of 2.2 million bpd from December but said on Nov. 3 it will delay the plan for a month. The Oil cartel cited concerns around weakening demand and supply outside of OPEC + are currently maintaining downward pressure on Oil prices. China Stimulus Fails to Impress Beijing announced a 10-trillion-yuan ($1.4 trillion) debt package on Friday to help local governments deal with financial problems. This follows recent stimulus measures in September as well which so far seem to have failed to lead to any meaningful change. The Macro economic outlook for China remains a concern with many analysts downgrading their forecasts of late.  This week’s decision comes as China deals with challenges from Donald Trump’s re-election as U.S. president, who has threatened to increase tariffs on Chinese goods. The impact of this could see the Chinese economy struggle to achieve its 2025 GDP targets as well and could in part explain the reasoning for the OPEC downgrades.  Technical Analysis From a technical perspective, Oil prices started the week on the back foot following a losing week and a very bearish Friday after rejecting the key resistance zone at 76.35.  As things stand however the daily candle is on course to close bullish, up around 0.90% on the day. A daily close here will lead to a higher low which would hint at further upside and potentially a fresh high above the 76.35 handle.  A boost in oil prices could materialize should concerns around a wider Middle East conflict return to the fore. President Elect Donald Trump has been recruiting Cabinet members already which could add a risk premium on the chance of peace in the Middle East.  If markets perceive any appointments as being pro-war, the idea of a regional conflict involving Iran is likely to rear its ugly head. This in turn could send fears around Oil supply etc to the fore.  A continued recovery from here faces some resistance around 74.00 before the recent highs at 76.35 come into focus.  Looking at the downside, a potential candle close below the 71.40 (recent swing low) could send Oil prices back below the key psychological 70.00 handle with 69.52 and 68.17 further areas of interest on the downside.  Brent Crude Oil Daily Chart, November 12, 2024 Source: TradingView (click to enlarge) Support 74.63 72.38 70.00 (key area of confluence) Resistance 76.00 78.90 80.00 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The Japanese yen is in negative territory on Tuesday. In the North American session, USD/JPY is trading at 154.44 up 0.46% on the day. No clarity from BoJ summary of opinions The Bank of Japan summary of opinions indicated a lack of clear direction regarding the timing of a rate hike. This will leave traders guessing as to whether the BoJ will wait until early next year, which seems the most likely scenario. Still, a December hike is on the table, as inflation remains high and the yen is struggling. At the same time, the political instability in Japan and the transfer of power in the US has resulted in considerable political uncertainty, which supports the case to hold rates until next year. The BoJ has never made transparency a priority, in stark distinction to the Federal Reserve which took pains to telegraph its intent to lower rates earlier this month. The BoJ has surprised the markets in the past, which could be part of its effort to discourage yen speculators. The BoJ meets next on Dec. 19 and key data such as inflation and GDP will be important factors ahead of the rate decision at the December meeting. As well, 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. In the US, there are no major events on the data calendar but investors will be listening closely as a number of FOMC members make public remarks today. The Federal Reserve is expected to continue to trim rates, with the markets pricing in a cut of 25 basis points at 65%, according to the CME’s FedWatch. USD/JPY Technical There is resistance at 154.76 and 155.57 USD/JPY tested support at 1.5425 earlier. Below, there is support at 153.44

The British pound is lower on Monday. In the North American session, GBP/USD is trading at 1.2870, down 0.33% on the day. The pound is coming of a sixth straight losing week, declining 3.5% during that time. It’s a quiet day on the data calendar, with no US events and only one minor UK release. UK employment expected to decline The UK releases the employment report for the three months to September on Tuesday. Job growth soared by 373 thousand in the prior report, crushing the market estimate of 250 thousand. The labor market is expected to reverse directions, with a market estimate of -50 thousand. As well, the unemployment rate is projected to inch up to 4.1%, up from 4%. Wage growth excluding bonuses is expected to fall to 4.7% in the three months to September, down from 4.9% in the previous report. Wage growth has been easing but is still high and BoE policymakers are concerned about the possibility of a wage-price spiral. The strong growth in wages has contributed to high inflation in the services sector. The BoE holds its final policy meeting in December and Tuesday’s jobs report could impact market expectations. The BoE reduced rates by 25 basis points last week to 4.75% but with inflation falling to 1.7% in September, more rate cuts are likely on the way. A host of Federal Reserve members will deliver remarks on Tuesday and investors will be looking for clues about future rate moves. The Fed lowered rates by 25 basis points last week, a move that was well-telegraphed in advance. What will the Fed do at the December meeting? That is much less clear, as the markets have priced in a pause at 23%, a 25-basis cut at 2.9%, and a 50-basis cut at 22%, according to the CME’s FedWatch. GBP/USD Technical GBP/USD is testing support at 1.2870. Below, there is support at 1.2822 There is resistance at 1.2933 and 1.2981

The New Zealand dollar is showing limited movement on Monday. In the European session, NZD/USD is trading at 0.5967, up 0.07% on the day. The New Zealand dollar was trounced on Friday, falling 1%. New Zealand inflation expectations inch up to 2.1% New Zealand inflation expectations inched higher to 2.1% in the fourth quarter, up from 2.0% in Q3. Expectations for one-year ahead annual inflation declined to 2.05% from 2.40%. The Reserve Bank of New Zealand keeps a careful eye on inflation expectations are they can translate into real inflation. Inflation has been on a downtrend and fell to 2.2% in the third quarter, the first time in over three years that inflation is back in the target band of 1% to 3%. The RBNZ has been aggressive in its easing cycle in response to falling inflation. The central bank slashed the cash rate by 50 basis points to 4.75% last week and is expected to reduce rates by another 50 bp at the final meeting of the year on Nov. 27. The RBNZ is likely to continue trimming rates in 2025, with the pace and size of rate cuts largely dependent on inflation, employment and GDP. China’s CPI ticks lower China’s consumer prices rose 0.3% y/y in October, below the 0.4% gain in September and the lowest since June. This missed the market estimate of 0.4%. The monthly reading pointed to deflation, coming in at -0.3%, compared to 0% in September and lower than the -0.1% market estimate. China’s central bank announced in September aggressive stimulus to boost the sluggish economy and encourage more consumption, but the measures will take time to filter through the economy. NZD/USD Technical NZD/USD has pushed above resistance at 0.5987 and is testing resistance at 0.6002 There is support at 0.5957 and 0.5942

The New Zealand dollar is showing limited movement on Monday. In the European session, NZD/USD is trading at 0.5967, up 0.07% on the day. The New Zealand dollar was trounced on Friday, falling 1%. New Zealand inflation expectations inch up to 2.1% New Zealand inflation expectations inched higher to 2.1% in the fourth quarter, up from 2.0% in Q3. Expectations for one-year ahead annual inflation declined to 2.05% from 2.40%. The Reserve Bank of New Zealand keeps a careful eye on inflation expectations are they can translate into real inflation. Inflation has been on a downtrend and fell to 2.2% in the third quarter, the first time in over three years that inflation is back in the target band of 1% to 3%. The RBNZ has been aggressive in its easing cycle in response to falling inflation. The central bank slashed the cash rate by 50 basis points to 4.75% last week and is expected to reduce rates by another 50 bp at the final meeting of the year on Nov. 27. The RBNZ is likely to continue trimming rates in 2025, with the pace and size of rate cuts largely dependent on inflation, employment and GDP. China’s CPI ticks lower China’s consumer prices rose 0.3% y/y in October, below the 0.4% gain in September and the lowest since June. This missed the market estimate of 0.4%. The monthly reading pointed to deflation, coming in at -0.3%, compared to 0% in September and lower than the -0.1% market estimate. China’s central bank announced in September aggressive stimulus to boost the sluggish economy and encourage more consumption, but the measures will take time to filter through the economy. NZD/USD Technical NZD/USD has pushed above resistance at 0.5987 and is testing resistance at 0.6002 There is support at 0.5957 and 0.5942

The Australian dollar is lower on Friday after posting sharp gains a day earlier. In the European session, AUD/USD is trading at 0.6637, down 0.61% on the day. The Aussie has been swinging wildly in a week that included the US presidential election and central bank rate decisions in Australia and the US. The dust hasn’t yet settled from Donald Trump’s decisive election win on Tuesday. The US dollar has gained ground on the election news, on concerns that Trump’s trade policy could lead to tariffs and trade wars which could boost inflation and slow the pace of interest rate cuts. RBA’s Bullock: Trump impact on Australian inflation unclear What will a Trump presidency mean for Australia’s economy? Reserve Bank of Australia Governor Bullock couldn’t answer that question at an appearance before a Senate committee on Thursday. Bullock said a Trump presidency could send inflation in different directions and that the RBA had not changed its forecast that inflation won’t fall sustainably within the target band until 2026. The RBA has become an outlier among major central banks as it is yet to start cutting rates in response to lower inflation. The central bank held rates at 4.35% earlier this week, a move that was widely expected. Overshadowed by the dramatic US election, the Federal Reserve lowered the benchmark rate by 25-basis points on Wednesday. The decision was widely expected as the Fed had telegraphed its intentions well before the decision. This follows the jumbo 50-bp cut in September, which was largely driven by weak job numbers which spooked the markets on fears that the US economy was fast deteriorating. These concerns appear to have been exaggerated and with the Fed confident that it can steer the economy to a soft landing, the Fed would like to gradually cut rates in modest increments of 25 basis points. AUD/USD Technical AUD/USD is testing support at 0.6644. Below, there is support at 0.6600 There is resistance at 0.6724 and 0.6768

The Canadian dollar has steadied on Friday after a roller-coaster week. In the European session, USD/CAD is trading at 1.3889 at the time of writing, up 0.22% on the day. Canada’s job growth expected to slow With the tough battle against inflation largely won, the Bank of Canada has been a leader in the easing cycle among central banks, having cut rates three times this year. BoC policymakers are still keeping an eye on inflation but employment data is also in focus. The labor market has performed well despite high interest rates and a sluggish economy and the BoC needs the labor market to remain strong in order to ease the economy into a ‘soft landing’ and avoid a recession. The September employment report was impressive as job growth jumped by 46.7 thousand, which was much higher than expectations. The October release is expected at 25 thousand and the unemployment rate is projected to creep up to 6.6% from 6.5%. If the forecasts prove accurate, it would point to a gradually weakening labor market, which would allow the BoC to continue cutting rates in modest increments of 25 basis points. The BoC holds its last rate meeting of the year on Dec. 11. The Federal Reserve lowered the benchmark rate by 25-basis points on Wednesday. This is the second cut in the easing cycle after an oversized 50-bp chop in September. The move was widely expected and overshadowed by Donald Trump’s decisive and surprisingly easy win in the US election. The Fed plans to continue trimming rates but the size of the cuts will depend on the health of the economy, with employment and inflation data being the crucial factors which will determine the Fed’s rate path. USD/CAD Technical USD/CAD is testing resistance at 1.3884. Above, there is resistance at 1.3925 1.3819 and 1.3778 are the next support levels

The British pound has rebounded on Thursday. In the North American session, GBP/USD is trading at 1.2983, up 0.81% on the day. A day earlier, the pound took a drubbing, sliding 1.2%. BoE cuts rates by 0.25% There was no surprise as the Bank of England lowered the key interest rate by 0.25% to 4.75%. The markets had priced in the move at close to 100% and the Monetary Policy Committee voted 8-1 in favor of the cut, with one member voting to hold rates at 5%. The BoE has now lowered rates twice since its easing cycle in August. BoE policymakers had signaled that a rate cut was coming, as September inflation dropped sharply to 1.7%, the first time in over three years that inflation dropped below the BoE’s target of 2%. The central bank is expected to lower rates gradually in modest increments of 25 basis points in the coming months, but last week’s UK budget could complicate things. The budget included tax hikes and increased spending, which is expected to boost inflation. That could mean a pause at the next BoE meeting in December and a slower pace of rate cuts next year. The Federal Reserve meets later today, in the shadow of the dramatic US election, in which Republican Donald Trump cruised to a surprisingly easy victory over Democrat Kamala Harris. The Fed is virtually certain to trim rates by 0.25% to 4.5%-4.75%. With inflation easing, the Fed is expected to continue its rate-cutting cycle into 2025. GBP/USD Technical GBP/USD pushed above resistance at 1.2920 earlier and then tested resistance at 1.3007 There is support at 1.2793 and 1.2706

Markets anticipate a 25 bps rate cut, but the focus remains on Fed projections. Trump’s victory sparks market rally, Will the FOMC meeting add fuel to the rally? S&P 500 technical analysis hints at further upside toward the 6170 handle. Most Read: Gold Prices Plunge as Trump Triumphs: What’s Next for XAU/USD? The FOMC meeting today has taken a somewhat back seat to the US election this week. Of course that was to be expected, but markets do appear to have settled following the return to the White House for Donal Trump.  It appears attention may be shifting to the FOMC meeting today, even though a 25 bps rate cut is all but assured. Market participants have already repriced their expectation for rate cuts from December moving forward. Markets began pricing in less rate cuts following the election as concerns over tariffs and their potential impact on inflation became a possibility.  As things stand markets are still pricing in around a 66% chance of a 25 bps cut in December, which is down from the 77% prior to the election results.  Source: CME FedWatch Tool (click to enlarge) US Election to Impact Fed Decisions Moving Forward? Donald Trump is set to begin his term as the 47th President of the United States on January 20. The Federal Reserve will have today’s meeting and the December 18 meeting before Trump assumes office. The January 29 meeting may also come too soon for any change in fed policy in my opinion solely because any move like tariffs would take a while to be felt by the economy. The Fed will only make a move based on what the data shows them.  In the lead up to the election, Fed officials said that they don’t change monetary policy based on government proposals. Instead, they focus on the economic effects of those decisions and respond accordingly. A Trump Presidency has so far resulted in a rally for Wall Street Indexes propelling them to fresh highs. The US Dollar Index (DXY) at its highs was up around 2% on the day and enjoyed its biggest single day rally since sometime in 2016. The Fed cut today may not be enough to derail the DXY rally but may add further fuel to the rally in Wall Street Indexes. Barring a hawkish message from Trump I do believe that US Indexes may continue to move higher which is an ominous sign given that the usual Santa Rally has yet to even begin. Will the S&P 500 breach the 6000 handle after the FOMC release? Technical Analysis From a technical standpoint, The S&P is still on course to complete its move to target following the long-term triangle pattern breakout which took place on September 19. The first target after the breakout was the 5910 handle which was finally hit yesterday.  The next target lies above the 6000 mark at 6170, which could be hit in the weeks ahead as markets expect the usual ‘santa rally’.  There is however the possibility of a pullback based on the technical as the RSI is approaching overbought territory.  The FOMC meeting could help push the index above the 6000 handle before we get a pullback and then continue toward the 6170 target. This would be the ideal scenario but then again markets do not always play out as expected. Immediate resistance rests at the psychological 6000 handle before the 6170 mark becomes the area of focus.  Conversely, a move lower from here must navigate support at 5910 before the swing high at 5870 and support at 5757 comes into focus.  S&P 500 Daily Chart, November 7, 2024 Source: TradingView.com (click to enlarge) Support 5910 5870 5757 Resistance 6000 6170 6250 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The US dollar is on a tear against the major currencies after Donald Trump’s sweeping victory in the US presidential election. In the North American session, USD/JPY is trading at 154.62, up a massive 2.0% on the day. Trump elected as US President There are still plenty of votes to count in the US election but it looking increasingly likely that Republican Donald Trump has been re-elected as President. Trump and Democrat Kamala Harris were in a dead heat going into the election on Tuesday and there was concern that declaring a winner could take days or even weeks, which would have led to prolonged uncertainty. In what was a huge surprise to both sides, Trump cruised to victory. The win is even sweeter for the Republicans as they likely have won control of both the House of Representatives and the Senate. With the Republicans in charge, Trump’s agenda will be easier to push through Congress. It should be noted that at the time of writing, the vote count is incomplete and Harris has not conceded defeat. The US dollar has responded to the Trump win with sharp gains and the yen is in full retreat. Trump’s threats to slap stiff tariffs on China, Europe and Mexico would support the dollar, as tariffs would raise inflation and interest rates. If Trump’s policies lead to trade wars, market sentiment will fall, further boosting the dollar. The Bank of Japan released the minutes of its September meeting today. At the meeting, the BoJ kept rates at 0.25% and Governor Ueda said that BoJ would not rush to raise rates during market volatility. Those comments were a response to a stock market slide after weak US employment reports raised fears that the US economy was deteriorating much more quickly than expected. Those fears were unfounded and the markets don’t expect a BoJ rate hike before early 2025, although if the weak yen takes a dive, it could accelerate plans to raise rates. USD/JPY Technical USD/JPY has pushed past resistance at 151.86, 152.87 and 153.84. The next resistance line is 153.95 150.78 and 149.77 are providing support

Trump win sends US dollar soaring EUR/USD is getting hammered on Wednesday. In the North American session, the euro has tumbled by 1.90% and is trading at 1.0725. Earlier, the euro fell as low as 1.0682, its weakest level since June 28. The US dollar has surged against all of the major currencies after Republican Donald Trump cruised to a surprisingly easy victory. The election polls pointed to a dead heat between Trump and Democrat Kamala Harris and there were fears of recounts and court challenges if the result was close, which could have led to political instability for weeks. Instead, Trump won a clear and decisive victory and gave a victory speech earlier on Wednesday. The vote count isn’t over but the Republicans have won the Senate while the House of Representatives is too close to call. If the Republicans can hold onto the House, Trump will have a much easier path to push through his agenda. A Trump presidency 2.0 has raised fears of import tariffs, which Trump has used as a key weapon in trade policy in the past, particularly against China. Tariffs would make imports more expensive and trade wars would hurt the global economy. US stock markets have soared today on the election news, but if Trump makes good on his threat for new tariffs, investor confidence would likely fall and push the stock markets lower. In the eurozone, the services sector is expanding but at a weak pace. Eurozone Services PMI improved from 51.2 to 51.6 and the German Services PMI from 51.4 to 51.6. The50 level separates expansion from contraction. EUR/USD Technical EUR/USD has pushed below several support levels. 1.0767 and 1.0699 are the next support levels There is resistance at 1.0904 and 1.0973

Gold prices plummet as Trump’s election victory boosts the US dollar and Treasury yields. Market sentiment shifts towards higher interest rates, diminishing gold’s appeal. Technical analysis suggest bearish momentum is building, will safe haven demand return and underpin Gold prices? Most Read: US Dollar Index (DXY) Explodes Higher as Markets Prepare for a Trump Victory Gold prices in freefall as the US Dollar Index and US Treasury Yields surged following a Donald Trump election victory. The US Dollar Index and US 10 Yield are both trading at levels last seen in July with the former up around 1.7% on the day. The Republicans have secured the Senate as well while there is growing optimism of a clean sweep which would see them claim the House as well which in theory should underpin the US Dollar moving forward.  US Election Results Source: Edison Research, Reuters (click to enlarge) Market participants appear convinced that a Trump victory will lead to higher rates for longer, thus diminishing the appeal of the non-yielding precious metal. This coupled with renewed optimism that President Trump will be able to reach a peace deal in the Middle East has also weighed on Gold prices.  Looking at the rate probabilities for December and we can already see significant repricing of expectations. Prior to the elections markets were pricing in a 77% probability of a 25 bps cut in December, this has been revised down to 66% post election and could decline further should the republicans secure the House as well.  Source: CME FedWatch Tool (click to enlarge) 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.  The Federal Reserve meeting tomorrow is likely to have a limited impact on markets. The outlook moving forward by the Fed will be key for now, but markets may be hesitant to look too far ahead. The reason is simple, with Trump assuming office in January there is a chance that the Fed outlook may face significant changes in the new year if tariffs and inflation become topics of concern. 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 been flirting with overbought territory since the Middle of October before the accelerated selloff today. Looking at the daily timeframe and Gold is now trading below the long-term ascending trendline (inner) for the first time since it started way back in August. A daily candle close below this level could open up the potential for a deeper pullback. Gold (XAU/USD) Daily Chart, November 6, 2024 Source: TradingView (click to enlarge) Looking at a four hour chart, Gold had been showing signs that bullish pressure had been starting to wane. This was most notable by the multiple rejections of the 2750/oz handle, which faced multiple tests this past week.  Having broken below the 2700 handle, Gold selloff gathered momentum rushing toward the 2750 psychological level. A break of this handle opens up a run toward the 2639 support area before the 2624 comes into focus.  Given the speed of the selloff, the possibility of a retracement before continuation is also a possibility. A retest of the trendline could be ideal for market participants looking for a potential bearish continuation.  This would require a pullback toward the 200-day MA which lines up with the trendline and key level at 2685.75. Should momentum build, a deeper pullback toward 2700 would not rule out a further leg to the downside and would provide a potentially better risk to reward for potential shorts.  Gold (XAU/USD) Four-Hour (H4) Chart, November 6, 2024   Source: TradingView (click to enlarge) Support 2650 2639 2624 Resistance 2673 2685 2700 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The US Dollar Index (DXY) surged as markets anticipated a Donald Trump victory in the US presidential election. Market sentiment suggests a Trump presidency and Republican majority will boost the US economy, leading to a stronger US dollar in the medium term. Trump’s proposed policies on tariffs and tax cuts could impact US inflation and interest rates expectations. Most Read: Trump or Harris? Why the Nasdaq 100, S&P 500 Might Not Care Who Wins The US Dollar exploded to the upside as Donald Trump is expected to be confirmed as the 47th President of the United States in a remarkable comeback. Markets appeared buoyed by the news with Wall Street Indexes, the US Dollar and Bitcoin all rallying as results filtered through. US Dollar Strength to Continue? The US Dollar Index (DXY) had been on the back foot since the start of the week but roared to life in the Asian session. The DXY erased early week losses to hit a fresh high around 105.300 as the potential for a Trump clean sweep grows.  Currency Strength Chart (Strongest to Weakest): USD, CAD, NZD, CHF, AUD, GBP, JPY, EUR. Source: FinancialJuice The Strength in the US dollar is largely down to expectations that Donald Trump’s idea around tariffs could contribute to a renewed rise in US inflation and lead to less rate cuts moving forward. This is reflected by the OIS curve which has recorded some 10bp+ repricing across 2025 tenors. That embeds a policy rate close to 4.0% in June 2025, almost 100 bps higher than mid-September pricing. Market participants also seem to be of the opinion that a Trump Presidency and Republican majority will be good for the economy. The surprise for me here is that the US economy has actually been strong this year, which begs the question what changes are markets expecting?  There have been a few comments already from Trump, who has promised to lower taxes and pay down debt as well. This may prove to be a challenge but time will tell. Trump has also stated that he doesn’t wish to start more wars but rather end them, something which could have an impact on safe haven currencies like the CHF, JPY and of course Gold prices moving forward.   The Federal Reserve meeting on Thursday may be overshadowed by the election as markets have largely priced in a 25 bps cut. This meeting will also be too soon for any updates to the Feds projections due to changes in policy by a potential Trump Presidency.  Until announcements around tariffs and tax cuts are made and the implications begin, the Fed are likely to maintain their current stance. However, market participants as always are already moving to price in such eventualities and this in theory could keep the USD on the offensive moving forward. Intriguing times ahead for the US Dollar and global markets as the year-end approaches.  For all market-moving economic releases and events, see the MarketPulse Economic Calendar. Technical Analysis The DXY enjyed an impressive rally from the back end of September until October 24, before beginning a period of consolidation. This was followed be a brief pullback this week as markets prepared for the US election. The drop in the DXY could also be attributed to potential profit taking following the DXY’s impressive rally. Moving forward however, a lot will depend on whether the Republicans secure a clean sweep and control the house and congress. Such a move would make it easier for Trump to push through changes around tariffs and potential tax cuts which will be driving force for the US Dollar in the months ahead. The DXY briefly traded above the psychological 105.00 handle for the first time since July. The question now is whether the DXY will experience a pullback or push on and immediately gain acceptance above the 105.00 handle. I would suggest paying attention to what happens with the house, while a congress split could have severe implication for the DXY and other markets moving forward. A republican clean sweep however, will likely see the DXY gain acceptance above the 105.00 handle with the next areas of resistance resting around 105.63 and 106.00. Conversely, a push lower in the DXY would see the index face support at previous highs around 104.50 before the confluence area between 103.80 and 103.00 comes into focus. This could be a key area of support for the DXY as it holds the 100 and 200-day MAs as well as a few key levels and is a strong area of support. US Dollar Index (DXY) Daily Chart, Novemeber 6, 2024 Source: TradingView.com Support 104.50 103.80 103.00 Resistance 105.00 105.60 106.00 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

Wall Street Indexes rebounds on strong ISM Services PMI as election uncertainty lingers. Investors closely watch Congressional election results, as a unified government is seen as beneficial for stock market performance. Market volatility remains low as investors await election results and upcoming Federal Reserve and BoE decisions. Most Read: Silver (XAG/USD) Technical Outlook: Bullish Momentum Building? Wall Street Indexes rose in the early hours of the US session helped by a surprise US services activity print. Market participants continue to wait with bated breath on the outcome of the US Presidential election. The ISM Services PMI in the US unexpectedly jumped to 56 in October 2024, the highest since August 2022, from 54.9 in September and beating forecasts of 53.8. The strong gain was mostly driven by a rebound in employment. Concerns about political uncertainty grew compared to the previous month. Issues from hurricanes and labor problems at ports were often mentioned, but the impact of the longshoremen’s strike was less severe than expected because it was short-lived, according to Steve Miller, Chair of the ISM Services Business Survey Committee. The ISM data gave Wall Street Indexes a boost with the S&P 500 seeing all 11 sectors in the green with Industrials .SPLRCI, Consumer Discretionary .SPLRCD and Information Technology .SPLRCT adding more than 1.3%. On the earnings front, Palantir’s (PLTR.N) stock jumped 23% to a new high after the company increased its yearly revenue prediction for the third time. As the election has drawn closer Trump media continues its rally, with the group surging 14.4%. Big tech stocks also gained on the day, with Tesla increasing by 4% and Nvidia rising by 3.1%. Trump or Harris: Congressional Elections Results also Key As the election race heats up the latest polls are showing a tight race. There is growing attention to the congressional elections as well and this may be more important for market participants. The data suggests that US stocks perform better under a unified government as that would allow the President to make significant policy changes. A divided congress can at times be a hurdle for the incoming President especially with the opposing view on the economy and at times foreign policy. Source: LSEG Volatility has thus far been low this week as market participants weigh the various risks still ahead this week. After the elections we also have the Federal Reserve decision, the BoE and the University of Michigan sentiment preliminary numbers will be released on Friday.  Technical Analysis  Nasdaq 100 The Nasdaq 100 broke below the ascending channel but failed to push lower ahead of the election. Given the caution on display by market participants it is no surprise that US indexes have failed to push lower after last week’s selloff.  The Nasdaq has broken back above the lows of the ascending channel, however there is a chance that the US election could still be a shot in the arm for a deeper pullback. Given the excellent US stock market performance this year, I think markets may be oblivious to whoever wins the election. Rather we could just get a spike in volatility and liquidity before markets continue their trend. In the lead up to the election, many US voters were of the opinion that former President Trump is more pro free markets and better for the economy, however given the performance under the Biden administration markets might remain optimistic with a Harris victory. This makes the potential reaction by markets even more intriguing.  Either way, immediate resistance rests at 20484 and 20675 before the all-time highs around 20790 come into focus. Conversely, a break below last week’s low at 19918 brings the possibility of a retest of the 100-day MA which rests at 19671. A break below this level will lead to a third touch of the ascending trendline which rests just below the 100-day MA.  Nasdaq 100 Daily Chart, November 5, 2024 Source: TradingView (click to enlarge)  Support 19918 19750 19536 Resistance 20484 20675 (all-time highs) 20790 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The New Zealand dollar has moved higher on Tuesday. In the North American session, NZD/USD is trading at 0.5998, up 0.46% on the day. RBNZ says economy in weak shape The Reserve Bank of New Zealand released its semi-annual Financial Stability Report and the financial system received a favorable grade. That was it for the good news, as the report pointed to weak economic conditions that were hampering households and businesses. The report noted that rising unemployment was causing “acute” financial difficulties for some households and that businesses had been impacted by weak demand and high cost pressures. This had caused households to reduce spending and businesses to freeze investing. Although inflation and interest rates had fallen, “significant further weakening in the economy remains a risk.” The negative tone of the report could mean that the central bank will remain aggressive in its rate-cutting cycle. The RBNZ slashed rates by 50 basis points in October, lowering the cash rate to 4.75%. The final meeting of the year is on Nov. 27 and another 50-bp is likely, with a supersize 75-bp cut an outside possibility. The RBNZ will be keeping a close eye on Wednesday’s third-quarter employment report. Employment change is expected to decline by 0.4% after a 0.4% gain in the second quarter. As well, the unemployment rate is projected to jump to 5%, from 4.6% in the second quarter. With inflation easing, the RBNZ is keeping a closer eye on the labor market and if the deterioration in employment is worse than expected in Q3, the calls for a 75-bp cut at the next meeting will get louder. NZD/USD Technical NZD/USD has pushed above resistance at 0.5987 and is testing resistance at 0.6002 There is support at 0.5957 and 0.5942

The Australian dollar has posted strong gains on Tuesday. In the European session, AUD/USD is trading at 0.6624, up 0.59% on the day. RBA holds rates, stays hawkish Nobody should have been surprised that the Reserve Bank of Australia maintained interest rates on Tuesday. The hold was widely priced in by the markets and marked the eighth straight meeting that the central bank has maintained rates. The RBA has turned into an outlier among major central banks, most of which have responded to lower inflation by trimming rates. Australia’s inflation rates has also been on a downswing and headline CPI fell to 2.8% y/y in Q3 2024, within the RBA’s target of 2%-3%. Still, core CPI remains higher and services inflation has been sticky and is running at 4.6%. The RBA had a hawkish message for the markets at today’s meeting. The rate statement said that the Bank was “not ruling anything in or out”. Governor Bullock added at her press conference that there were “still some risks on the upside” and singled out services inflation as evidence that there was “still a significant amount of inflation in the system”. What can we expect from the RBA? The December meeting will probably see the central bank remain on the sidelines and an initial rate cut is not likely before February 2025. The rate path will depend greatly on inflation – if it continues to weaken, that would bolster the case for a rate cut. Another key factor will be the labor market, which has remained relatively strong despite a sluggish economy. If cracks appears in the labor market in the coming months, expectations for a rate cut will increase. AUD/USD Technical AUD/USD has pushed above resistance at 0.6595 and is testing resistance at 0.6611. Above, there is resistance at 0.6635 There is support at 0.6571 and 0.6555

The VIX (the implied volatility of the S&P 500) has inched higher above the 20 level in the past four sessions. The VVIX/VIX ratio has moved lower since 16 September, and past data suggests a potential short to medium-term corrective decline in the S&P 500. Watch the key intermediate support of 5,675 on the S&P 500. This is a follow-up analysis of our prior report “SPX 500: Second sign of downside volatility emerges, odds of medium-term corrective decline increase” published on 1 November 2024. Click here for a recap. Since our last publication, the S&P 500 has continued to languish as it failed to recapture its gapped down formed last Thursday, 31 October, and its 20-day moving average, both acting as an intermediate resistance at 5,810. The movement of the S&P 500 is now being bombarded with macro factors (the upcoming FOMC meeting on 7 November), firm-based risks (ongoing US Q3 earnings session), and political events (the outcome of the US presidential election and the balance of power status in Congress). Hence, market participants are cautiously hedging on potential negative tail-risk scenarios that could occur in the US stock market, triggered by these factors; either individually or by a concoction of it. These downside tail-risk protection strategies can be structured via options and or futures markets on stock market implied volatility instruments such as the VIX or the VVIX (implied volatility on the VIX aka VIX of the VIX). Also, such hedging activities are likely to create a potential reflexive feedback loop into the US stock market which in turn may impact the price actions of the major US stock indices negatively.  VIX has remained above 20 and the VIX/MOVE ratio is still above support Fig 1: Major trends of MOVE Index, VIX & VIX/MOVE ratio as of 5 Nov 2024 (Source: TradingView, click to enlarge chart) Since the week of 16 September 2024, the leading Merrill Lynch Option Volatility Estimate (MOVE) Index that reflects the level of volatility in U.S. Treasury futures has surged upwards significantly and cleared above a key medium-term resistance of 112.80. The VIX (the implied volatility of the S&P 500) has lagged but still tagged along the movement of the MOVE Index and in the past four sessions inched higher above 20 where it recorded a closing level of 21.95 as of Monday, 4 November (see Fig 1). In addition, the VIX/MOVE ratio has continued to print a series of “higher lows” and remained supported by an ascending trendline since July 2024 which suggests a potential looming outperformance of the lagging VIX over the MOVE Index. Hence, a breakout above VIX key intermediate resistance of 23.38 may trigger a negative feedback loop into the S&P 500 at least on a short to medium-term time horizon. The current VVIX value suggests a potential higher VIX   Fig 2: Medium-term trends of S&P 500 & VVIX/VIX ratio as of 5 Nov 2024 (Source: TradingView, click to enlarge chart) The VIX is calculated from S&P 500 options, and the VVIX is calculated from VIX options. Therefore, a higher movement of VVIX suggests the VIX might be more volatile in the future, which in turn can indicate a market belief that the S&P 500 might also be more volatile. If we take the relative movement of the VVIX against the VIX by plotting the ratio of VVIX/VIX along the movement of the S&P 500, we can see there are several past occasions since July 2023 that when the ratio of VVIX/VIX inched downwards (VVIX has a relatively higher value than the VIX), the S&P 500 staged a corrective decline of at least 6% thereafter during the periods of 27 July 2023 to 27 October 2023, 1 April 2024 to 19 April 2024, and 16 July 2024 to 5 August 2024. Also, after these prior three periods of corrective decline sequences occurred on the S&P 500, it managed to stage bullish reversals when the VVIX/VIX ratio declined further to hit a level of 4.83 (see Fig 2). In recent weeks, the VVIX/VIX ratio has steadily inched downwards since 16 September 2024 and as of 4 November, it has a value of 5.56 (still has room before hitting 4.83) which suggests the S&P 500 may stage a corrective decline towards the medium-term support of 5,390 (also the 200-day moving average) if the key intermediate support of 5,675 (also the 50-day moving average) is broken down.