Daily Market Analysis By Z Forex

[Z Forex]

UK inflation Boosted, EU inflation still on the increase, BoJ ready for intervention.

Yesterday, the fresh European Union(EU) inflation report re-evoke the market that global inflation continues to rise. EU inflation for the second estimation revised to %9.90 so close to two digit numbers. Also, core inflation in EU was confirmed %4.8. Therefore, risk off sentiment and rising US treasury yields support the DXY is trading above 112.80 level. US10-year bond is hovering around %4.16. The spread between US2-10year is still around 43bps.

Yesterday, FED’s Beige Book showed that economic activity has slowed and inflation pressures have somewhat eased. Also, UK inflation was released. It came stronger than expected. The headline reached to %10.1 YoY (previously %9.9). The core inflation boosted to %6.5 YoY vs %6.3 previously. In the UK, whispers come related to Liz’s resignation. There is a growing call for her resignation in the country. Thus, the pound dropped to 1.1200 level with the political uncertainties. In addition, gilts remained firm with 30-year gilt below at %4.00

In addition, Chicago Fed President Charles Evans said yesterday, “inflation is just much too high, and so we need to continue on the path that we’ve been indicating — at least that. And I’m hopeful that that will be enough.”

In this morning, Germany producer Price Index released. The data is still on the increase with %45.8 YoY. For the rest of the day, US Initial Jobless Claims and US Existing Home Sales Change will be announced.

EURUSD

The EURUSD is trading around 0.9785. Risk appetite is still in the favor of the Dollar Index. Yesterday, the inflation data estimated for the second this month and still upside risk is seen on the agenda for European region. On the other hand, ECB officials expects the ECB to hike 75bps at October and December meeting. Overnight Index swap (OIS) indicates a 150bps increase in target rate

Technically, above 0.9735 level the momentum continues to firm for the parity. Resistance is seen at 0.9800. Falling trend channel remains solid. More upside, resistance is around 0.9950 level. Then, at 1.00 (psychological level). The support for the pair is now seen at 0.9735, before the next at 0.9645.

Support: 0.9735 – 0.9645 – 0.9540

Resistance: 0.9800 – 0.9830 – 0.9950

GBPUSD

The pound was last seen at 1.1220 level. Yesterday, the political issues led the parity sell off. There is a growing call for PM Liz’s resignation. Also, inflation boosted to %10.1 YoY. Both politically and economically, the UK is facing hard times. Thus, gilt for 30Y is trading closely %4.00.

On the weekly chart of the pound, RSI 14 indicator is well-belowed oversold condition. Below 1.12 level, the pound has a negative sentiment. Also, political uncertainties make the pair more volatile. Support is at 1.1180 level. More downside 1.1120 is seen as support level. Resistance is seen around 1.1280, then 1.1345.

Support: 1.1180 – 1.1120 – 1.1050

Resistance: 1.1280 – 1.1345 – 1.1440

XAUUSD

The gold price is dropping further towards 1615 level. The US treasury yields are still on the increase. US10-year real rate reached 165bps. Yesterday, Fed officials give speech hawkish tunes. FED Kashkari said he can’t see how he would recommend pausing interest rate increases. Thus, both fundamentally and technical outlook for gold is bearish.

Technically, below 1655 level, the sentiment for gold price is negative. Support is seen at 1622. More downside, the support is at 1615 level. On the upside, the resistance is at 1634. On the additional upwards, 1642 is seen as crucial resistance.

Support: 1622 – 1615 – 1602

Resistance: 1634 – 1642 – 1654

 

[Z Forex]

The market mood is mixed. In UK, the leader will be elected this week. Xi Jinping was elected for a record third time five-year term.

The markets turned risk on mood closing of last week due to speculation that FED might slow tightening from December. After the news, FED futures are pricing a 75bps rate hike for November FOMC meeting with %91 probability on CME Fedwatch Tool. Yet, for December meeting it is priced for 50bps with %52 chance.

In Asian session, the news that former Boris Johnson withdrew from part leadership contest led to the pound make strong. In other words, Rishi Sunak is very close to UK’s next PM. If he is elected, the markets may see relief rally for the pound. Furthermore, Xi Jinping re-elected as general secretary of Communist Party of China for a record third time five-year term. Thus, the Chinese markets face an intense sell-off because the economists expect economic slowdown since the leader prefers ideology-driven policies.

Lastly, the Dollar index remain firm on mixed market sentiment. In addition, US 2-year treasury bond is retracing %4.42 and US10-year treasury bond is trading closely %4.15. On the data front, the PMIs for October comes today.



EURUSD

The EURUSD is trading around 0.9835. In Asian session, the pair reverses from 0.9900 level (50 Daily Simple Moving Average). Risk appetite is mixed today. This week, ECB rate decision will be followed. The market expects a 75bps rare hike, but Quantitative Tightening (QT) will be more important.

Technically, above 0.9720 level the momentum is positive for the EURUSD. Yet, the indicators for 4H chart shows the pair is overbought condition. Resistance is seen at 0.9900. Falling trend channel remains solid. More upside, resistance is around 0.9935, then 1.00 (psychological level). The support for the pair is now seen at 0.9825, before the next at 0.9720.

Support: 0.9825 – 0.97200 – 0.9630

Resistance: 0.9900 – 0.9935 – 1.0000

GBPUSD

The pound is hovering around 1.1345 level. Last week, UK Prime Minister Liz Truss resigned on Thursday after 44 days and she became the shortest-serving Prime Minister. Therefore, the strong volatility was seen on the pound. The crisis both politically and economically in the UK led to two names resign in just two months. In short, politics will remain front since conservatives will elect a new leader this week.

Back on the daily chart of the pound, support is at 1.1250 level. More downside, 1.1110 is seen as support level. Resistance is seen around 1.1410 (50DMA), then 1.1500 (psychological level).

Support: 1.1250 – 1.1110 – 1.0925

Resistance: 1.1410 – 1.1500 – 1.1680

XAUUSD

In Asian session, gold touched 1670 level one-week high level because of North and South Korea trade warning shots on maritime border. In short, geopolitical tension gives way to rise for gold price, but the downside pressure on yellow metals remains firm. On the other hand, hawkish FED bets give support to the Dollar Index and US treasury yields continue to rise again. The real yield for US10-year is 144bps. Therefore, gold price is challenging between critical region at 1615 -1684 level.

Technically, below 1665 level, the sentiment for gold price is negative. Support is seen at 1650. More downside, the support is at 1639 level. On the upside, the resistance is at 1674. On the additional upwards, 1684 is seen as crucial resistance.

Support: 1650 – 1639 – 1630

Resistance: 1674 – 1684 – 1696

UKOIL

Brent prices remain steady since OPEC+ reduce oil production by 2 million barrels per day from market on November only one week before US midterm election. Also, China released all together economic data today after a delay among the 20th Communist Party Congress last week. The GDP data published in China, increased by %3.9 YoY vs %3.3 expectation in Q3. Thus, it is said that growing economy give support the demand of Brent for a while.

Technically, brent oil is trading around 92.15 level. Below 91.25 (21-daily simple moving average), the momentum is negative for the black metal. The main resistance is at 93.10, then at 94.60. On the downside, 91.25 is seen as support level. If broken, the next will be at 88.80 level.

Support: 91.25– 88.80 – 87.00

Resistance: 93.10 – 94.60 – 95.70

 

[Z Forex]

Yuan continue to decline, UK’s new PM Rishi Sunak, the market is trading range bound.

The markets were mixed yesterday. In Europe and US stocks closed the first trading day positive, but heavy selling was seen in Hong Kong and China stocks because of disappointed by the absence of policy direction from Xi Jinping and a fresh standing committee which are completed with his loyalists. Also, Rishi Sunak became the new Prime Minister after the contenders Boris and Penny pulled out of the race. This may be the last chance for the Conservative Party to demonstrate the party can still be a credible government. Thus, the markets are now focusing on Sunak’s cabinet selection.

In Asian session, the Yuan continue to decline and hit another record low level at 7.30 since 2008. Now, the Dollar index is hovering around 112.00. Most of the currencies are trading range bound. Yet, US treasuries are still on the increase. US10-year yield is trading above %4.20 and the spread between US2-10year tightens to 29bps. In addition, PMIs released in mostly under 50, with a few negative disappointments. Still, the global recession is on the agenda.

Today’s economic calendar is relatively quiet, but Germany IFO business climate is the key focus in European session. Also, US consumer confidence will take center stage later in the day, then Richmond FED manufacturing data and house price index will be released.

EURUSD

The EURUSD is trading around 0.9872. Today’s economic calendar is relatively light. Yet, Germany IFO business climate is the key focus in European session.

Technically, the pair is still bearish trend channel. Above 0.9720 level, the momentum is positive for the EURUSD. Yet, the stochastic indicator for daily chart shows the pair is overbought condition. Resistance is seen at 0.9900/0.9910 region. Falling trend channel remains solid. More upside, resistance is around 1.00 (psychological level). The support for the pair is now seen at 0.9825, before the next at 0.9720.


Support: 0.9825 – 0.9720 – 0.9630

Resistance: 0.9900 – 1.0000 – 1.0000

GBPUSD

The pound is hovering around 1.1285 level. Yesterday, Rishi Sunak became the new Prime Minister after the contenders Boris and Penny pulled out of the race. For now,
politic uncertainties are over, but fiscal policy is challenging for the UK. The last chance for Sunak and his conservative party to show their skill. Therefore, cabinet selection will be watched closely.

Back on the daily chart of the pound, support is at 1.1245 level. More downside, 1.1180 is seen as support level. Resistance is seen around 1.1395 (50DMA), then 1.1500 (psychological level).

Support: 1.1245 – 1.1180 – 1.1060

Resistance: 1.1395 – 1.1500 – 1.1680

XAUUSD

Gold price is trading around 1650 level. The Dollar Index remain firm and US treasury yields are still on the increase. The real 10-year yield is around 138bps. Yesterday, the gold touched 1670 level with the news that Fed would start to slow its tightening pace in Dec. Thus, the yellow metals stay limited in a tight range between 1615 – 1666. If break the 21 Daily Moving Average at 1666, the momentum turns positive.

Technically, below 1666 level, the sentiment for gold price is negative. Support is seen at 1642. More downside, the support is at 1630 level. On the upside, the resistance is at 1666. On the additional upwards, 1675 is seen as crucial resistance.

Support: 1642 – 1630 – 1617

Resistance: 1666 – 1675 – 1684

UKOIL

Yesterday, PMIs for Europe, UK and America released in mostly under 50, with a few negative disappointments. Still, the global recession is on the agenda. Thus, the black metal is trading very tight range bound.

Technically, brent oil is trading around 92.75 level. Below 91.50 (21-daily simple moving average), the momentum is negative for the black metal. The main resistance is at 93.10, then at 94.60. On the downside, 91.25 is seen as support level. If broken, the next will be at 88.80 level.

Support: 91.50 – 89.30 – 88.70

Resistance: 93.10 – 94.75 – 96.00

 

[Z Forex]

The Dollar Index was sold off. Rishi Sunak becomes UK Prime Minister. Australia's CPI jumped to %7.3 YoY in Q3.

The Dollar Index declined firmly because of US Consumer confidence decreased sharply from 107.8 to 102.50 in October. Also, the Richmond FED Manufacturing index dropped sharply to -10.0 vs previously ‘zero’. Today, DXY is hovering around 110.80level (50DMA). In addition, the weakness in economic indicators led to FOMC rate moves on CME FedWatch Tool 50bps rate hike with the %50 probability. Yet, for November meeting a 75bps rate hike fully priced with the probability of %97. As a result, US10-year Treasury yield lost more than %3.0 yesterday. Today, the US10y bond yield is trading above %4.05 vs US2Y yield at %4.42.

Besides, Rishi Sunak becomes the third UK Prime Minister in two months. Thus, the political situation in the UK appears to have stabilized in a short time period. In addition, the inflation data from Australia released in the morning that it climbed to %7.3 YoY in Q3 vs %6.1 YoY in Q2.

For the rest of the day, we follow US new home sales and BoC interest rate decision. The BoC is expected to raise its policy rate by 75bps to %4.00 from %3.25.


EURUSD

The EURUSD is trading around 0.9880. Since the DXY softens with the weakness economic indicators, the pair press forward a potential to break out of the falling trend channel. The momentum is today positive, but eyes will be This on ECB rate decision which is released tomorrow. The market expects a 75bps rare hike, but Balance sheet shrinking could be considered as the next step of monetary policy normalization.

Technically, above 1.00 (psychological level) the volatility increases for the parity. Yet, the stochastic indicator for daily chart shows the pair is in overbought condition. Resistance is seen at 1.00. If breaks the falling trend channel, the resistance at 1.0090 (100DMA). The support for the pair is now seen at 0.9915 (50DMA), before the next at 0.9815.


Support: 0.9915 – 0.9815 – 0.9720

Resistance: 1.0000 – 1.0090 – 1.0195

GBPUSD

The pound is rallying above 1.1540 level. Rishi Sunak is officially UK’S new PM. Political situation for now is solved, but fiscal policy issues are still mixed. Thus, risks could be the downside and the pair stay within the range 1.09 – 1.15 for a while.

Back on the daily chart of the pound, support is at 1.1430 level. More downside, 1.1270 is seen as support level. Resistance is seen around 1.1680, then 1.1740.

Support: 1.1430 – 1.1270 – 1.1200

Resistance: 1.1680 – 1.1740 – 1.19000

XAUUSD

Yesterday, gold price recovered firmly, because the DXY softens and US10Y treasury yield dropped sharply to %4.05. Now, the yellow metal is trading above 1670 level, and the market sentiment is positive today. The real yield for US10-year is retracing 142bps. Therefore, gold price is trying to touch 50DMA at 1689.

Technically, above 1668 (21DMA) level, the sentiment for gold price is positive. Support is seen at 1650. More downside, the support is at 1639 level. On the upside, the resistance is at 1674. On the additional upwards, 1684 is seen as crucial resistance.

Support: 1655 – 1649 – 1638

Resistance: 1672 – 1689 – 1697

UKOIL

Brent prices is hovering around 93.00 level. The price stays range bound, because OPEC+ start reducing the production on November. However, former US Treasury Secretary Steven Mnuchin said on Wednesday that “I believe we have a recession in the US,” adding ‘I believe it will continue.’ In other words, global recession fears give ways to fall in oil demand for a while.

Technically, 91.95 (21-daily simple moving average), the momentum is negative for the black metal. The main resistance is at 93.05 (50DMA), then at 94.60. On the downside, 91.25 is seen as support level. If broken, the next will be at 88.80 level.

Support: 92.05– 91.00 – 88.80

Resistance: 93.10 – 94.40 – 95.60

 

[Z Forex]

DXY softens, US treasury market mood is mixed. In UK, the leader will be elected this week. Xi Jinping was elected for a record third time five-year term.

The dollar Index continue to decline because weakness economic data would provide FED to slow down the tightening pace sooner than earlier expected. In other words, hawkish FED bets expectations are on the decrease. Also, US Treasury Bond yields dropped, however, it should be noted that inflation remains FED's biggest problem. What else, investors also cautiously awaited policy decisions from the European Central Bank and the Bank of Japan this week.

In addition, IMF Managing Director Kristalina Georgieva said that central banks should keep raising interest rates until they reach “neutral level”. In other words, she explains that interest rates have to go up until the inflation comes flat. Furthermore, IMF forecast that tightening will continue until 2024 when central banks are “seeing the impact of their actions”.

Moreover, The Bank of Canada (BoC)announced a smaller-than-expected interest rate hike yesterday. BoC raised its policy rate by 50bps to 3.75%. It has increased rates by 350 basis points since March, one of its fastest tightening cycles ever. Yet, the bank said it was getting closer to the end of its historic tightening campaign as it forecast the economy would stall over the next three quarters.

Today, European Central Bank will announce its latest monetary policy decision. ECB is expected to hike rates by 75bps with the information about Quantitative Tightening timing. Then, US GDP numbers will be released at 15:30 (GMT+3).

EURUSD

The EURUSD is trading around 1.0075. The investors wait for ECB Policy rate decision. It is expected to announce a rate hike of 75bps. Yet, the main issue is about Quantitative tightening timing. If ECB president Lagarde says specific timing, then the pair will accelerate high-speed. If not, the pair meets the sell off because the rate hike is already priced.

Technically, above 0.9920 level the momentum is positive for the EURUSD. Yet, the daily RSI (14) indicator come to close overbought condition. Resistance is seen at 1.0095. More upside, resistance is around 1.0175. Falling trend channel is broken yesterday, but now it is seen as support. The support for the pair is first at 0.9925, before then at 0.9850.

Support: 0.9925 – 0.9850 – 0.9730

Resistance: 1.0095 – 1.0175 – 1.0265

GBPUSD

The pound is hovering around 1.1610 level. Since the political crisis is over, the pound make rally till the level 1.1645 with the optimism. Yet, fiscal policy is not certain. According to UK media outputs, new Prime Minister Rishi Sunak is reconsidering tax rises and major public spending cuts after a dramatic improvement in the state of the nation’s finances.

Back on the daily chart of the pound, resistance is at 1.1645 level. More upside, the resistance at 1.1740 (100DMA). The 14-day Relative Strength Index (RSI) has turned lower but remains comfortably above the midline. If the pair pull back suddenly, the first support at 1.1430, then 1.1380 (50DMA).

Support: 1.1430 – 1.1380 – 1.1270

Resistance: 1.1645 – 1.1740 – 1.1900

XAUUSD

Gold is trading around 1663 level, but the sentiment is today complicated. Also, the investors wait for the release of the US Gross Domestic Production (GDP) data. It is expected to announce growth, thus the hawkish FED expectations increase immediately. For the past several days, the Dollar Index softens, and US treasury yields continue to decrease. The real yield for US10-year is 146bps. Therefore, gold price is challenging between critical region at 1615 -1687 level.

Technically, below 1668 (21DMA) level, the sentiment for gold price is negative. Support is seen at 1649. More downside, the support is at 1639 level. On the upside, the resistance is at 1675. On the additional upwards, 1687 is seen as crucial resistance.

Support: 1657 – 1649 – 1639

Resistance: 1675 – 1687 – 1696

 

[Z Forex]

DXY recovers, Japan keeps the policy rate unchanged

The dollar Index is recovering because the US Gross Domestic Product (GDP) report showed the strength of the US economy. In other words, US Economy grew %2.6 YoY in the three months to September, better than anticipated. Also, European Central Bank (ECB) announced its monetary policy decision. As widely expected, the ECB increased the rate 75bps. Yet, the sound for growth and economic developments was disappointed. Additionally, the ECB introduced changes to the Targeted Longer-Term Refinancing Operations (TLTRO) III program. It means ECB tighten financial conditions further.

In Asia, the Tokyo inflation data climbed to %3.5 YoY in October. Also, the Japan Central Bank (BoJ) keep the policy rate unchanged (-%0.10). Furthermore, ‘The IMF cut Asia's economic forecasts on Friday as global monetary tightening, rising inflation blamed on the war in Ukraine, and China's sharp slowdown dampened the region's recovery prospects,’ said Reuters.

Today, the US Core PCE Price Index for September will be released, expected to rise to 5.2% versus 4.9% prior. A firmer print of the Fed’s preferred inflation gauge could add strength to the yields and hawkish Fed bets, which in turn will be favorable for the risk-safe assets ahead of the next week’s FOMC.

EURUSD

The EURUSD is trading below 1.0000 (psychological level). Yesterday, European Central Bank (ECB) announced its monetary policy decision. As widely expected, the ECB increased the rate 75bps. Yet, the sound for growth and economic developments was disappointed. Additionally, the ECB introduced changes to the Targeted Longer-Term Refinancing Operations (TLTRO) III program. It means ECB tighten financial conditions further. The interest rate on TLTRO III operations will be indexed to the average applicable key ECB interest rates over this period.

Technically, above 0.9920 level the momentum is positive for the EURUSD. Yet, the daily stochastic indicator is near overbought condition. Resistance is seen at 1.0095. More upside, resistance is around 1.0180. The support for the pair is first at 0.9920, before then at 0.9840.


Support: 0.9920 – 0.9840 – 0.9730

Resistance: 1.0095 – 1.0180 – 1.0265

GBPUSD

The pound is hovering around 1.1530 level. New UK Prime Minister is focusing on squeezing liquidity via fiscal policy. Still in UK, the inflation continues to increase. Also, DXY is recovering and according to the CME FedWatch tool, the chances of 75 basis points (bps) rate hike by the Federal Reserve (Fed) have dropped to %85.

Back on the daily chart of the pound, resistance is at 1.1595 level. More upside, the resistance at 1.1645. The 14-day Relative Strength Index (RSI) has turned lower but remains comfortably above the midline. If the pair pull back suddenly, the first support at 1.1375 (50DMA), then 1.1285.

Support: 1.1375 – 1.1285 – 1.1160

Resistance: 1.1595 – 1.1645 – 1.1740

XAUUSD

Gold is trading around 1656 level, but the sentiment is negative today. the Dollar Index is hovering around 110.62 level and US10-year treasury yields are below %4. However, the real yield for US10-year is decreasing and it is now 136bps.

Technically, below 1668 (21DMA) level, the sentiment for gold price is negative. Support is seen at 1649. More downside, the support is at 1639 level. On the upside, the resistance is at 1674. On the additional upwards, 1687 is seen as crucial resistance.

Support: 1649 – 1639 – 1630

Resistance: 1674 – 1687 – 1693

UKOIL

Brent prices is hovering around 95.70 level. Brent extends its gain yesterday up to 97.27, but the messages related to the growth and economy in Europe given by Lagarde in ECB meeting led to the black metal to lose momentum.

Technically, below 92.90 (21-daily simple moving average), the momentum is negative for the black metal. Also, the daily stochastic indicator is near overbought condition. The main resistance is at 96.80, then at 98.65. On the downside, 95.20 is seen as support level. If broken, the next will be at 92.90 level.

Support: 95.20 – 92.90 – 91.60

Resistance: 96.80 – 98.65 – 99.40

 

[Z Forex]

China PMI drops, FED & BoE’s decision will be announced.

This morning, manufacturing related data published in China. The October official services PMI falls to 48.7 vs 50.6 in September. Also, the October official manufacturing PMI drops at 49.2 (Reuters poll 50.0) vs 50.1 in September. However, the stocks are in green in Asia.

Last week, US economy grew by %2.6 in Q3. Interest rates may give way to to a further weakening in residential fixed investment, and under this outlook, Q4 growth data is likely to be somewhat weaker than the third quarter. Although the comparatively robust US growth points to the past period, the expectation of a 75bps rate hike, which can be called as a jumbo rate hike before the Fed meeting on November 2, continues. Also, ECB raises interest rates by 75bps as widely expected and the policy rate reached to %2.00 the rate. At the same time, the ECB changed the terms and conditions of the third series of TLTRO III, by adjusting the interest rates applicable from 23 November 2022, and offering banks additional voluntary early repayment dates. Additionally, BoJ kept policy rate unchanged. The Bank of Japan decided to keep the benchmark interest rate at -0.10%, in line with expectations

The key releases of the week will be the Fed's and BoE's interest rate decision. The US FOMC decision, which will be announced on Wednesday at 21:30, will be the most important agenda of the week. Expectations for an interest rate hike from the Fed are to raise the funding rate of %4.00 by 75bps rate hike. Similarly, 75 basis points rate hike decision expected from BoE meeting to be held on Thursday.


EURUSD

The EURUSD is trading below 1.0000 (psychological level). Last week, ECB increased the policy rate 75bps as widely expected. But, there is no explanation when the tightening will start. Thus, the investors bias turns negative. Still, the recession expectation in EU is on the agenda. Yet, the discourses of slower rates hike for FED keep buyers hopeful.

Technically, above 0.9925 level (21DMA) the momentum is positive for the EURUSD. Also, the daily stochastic indicator turns back overbought condition. Resistance is seen at 1.0000. More upside, resistance is around 1.0180. The support for the pair is first at 0.9925, before then at 0.9845.


Support: 0.9925 – 0.9845 – 0.9755

Resistance: 1.0000 – 1.0095 – 1.0185

GBPUSD

The pound is hovering around 1.1595 level. Last week, Rishi Sunak became new UK Prime Minister after Liz Truss resigned and he hold Jeremy Hunt as Finance Minister. Also, the new Budget is delayed to November 17 from October 31. Thus, the pound recovered itself since policy situation stabilized.

Back on the daily chart of the pound, resistance is at 1.1625 level. More upside, the resistance at 1.1740. The 14-day Relative Strength Index (RSI) is increasing near overbought condition. On the downside, the first support at 1.1375 (50DMA), then 1.1285.

Support: 1.1500 – 1.1375 – 1.1310

Resistance: 1.1625 – 1.1740 – 1.1900

XAUUSD

Gold is trading around 1641 level, but the sentiment is negative today. The Dollar Index is hovering around 110.85 level and US10-year treasury yields are below %4.03. while US2-year is last seen around %4.45 level. Last Friday’s data lead to the yellow metal sell off because PCE core deflator was up %5.1 YoY vs. previous %4.9 YoY. Also, Fed fund futures now suggest an equal chance of a 50bps move for Dec vs. 75bps. However, the real yield for US10-year is decreasing and it is now 133bps.

Technically, below 1668 (21DMA) level, the sentiment for gold price is negative. Support is seen at 1638. More downside, the support is at 1630 level. On the upside, the resistance is at 1647. On the additional upwards, 1668 is seen as crucial resistance.

Support: 1638 – 1630 – 1617/15

Resistance: 1647 – 1657 – 1668

UKOIL

Brent prices is hovering around 94.70 level. Oil market is likely to tighten after OPEC+ decision. Thus, the momentum for Brent oil is still bullish. Especially, since the EU’s oil embargo that will come into force in early December should likewise drive down the supply of oil from Russia.

Technically, below 93.15 (50-daily simple moving average), the momentum is negative for the black metal. Also, the daily stochastic indicator is near overbought condition. The main resistance is at 96.80, then at 98.65. On the downside, 95.20 is seen as support level. If broken, the next will be at 92.90 level.

Support: 93.30/15 – 91.20 – 88.80

Resistance: 96.40 – 96.90 – 98.85

 

[Z Forex]

PMIs will be the key data, +25bps from RBA this morning.

This morning, Australia Central Bank (RBA) increased the cash rate by 25bps from %2.65 to %2.85. This is the seventh straight rate hike and the level have not seen since April 2013. Inflation in Australia is on the increase and RBA thus forecasts the inflation rate at %8.00 this year. Also, The Caixin Manufacturing PMI released in China and the data rose to 49.2 in October previously 48.2 in September. The latest reading is above the previous one, but the impact of COVID controls lead to factory activity to shrink in China.

In addition, ECB officials continue to have a speech and they said they will take a significant interest rate hike step again in December. They also said that they continue to fight against inflation. Furthermore, ECB Governing Council Member Knot said that ‘we are still returning interest rates towards their neutral level for which we will also need the December meeting.

This week, two Central banks will have a meeting. FED is expected to continue with another 75bps rate hike to %3.75-%4.00. BoE also make 75bps rate hike to %3.00. The key data of the day will be the PMI Manufacturing from US, UK and Canada.


EURUSD

The EURUSD is trading around 0.9905 level. Since the DXY remains firm around 111.35 level, the parity is retracing somewhat. Hawkish expectations from FED officials give way to the market risk off mode. The 75bps rate hike for FED is already priced, but for December meeting the market is looking for a hope. The CME FedWatch tool shows that the probability of 75bps rate hike for December FOMC meeting is around %47. Also, the October inflation estimate in the Eurozone accelerated to a record high %10.7 YoY and core inflation also edged higher to %5.0 YoY from previous %4.8 YoY.

Technically, above 0.9885 level (50DMA) the momentum is positive for the EURUSD. Resistance is seen at 0.9960. More upside, resistance is around 1.0000 (psychological level). The support for the pair is first at 0.9885, before then at 0.9845. We follow consolidative action 0.9700 – 1.0200 range.


Support: 0.9885 – 0.9845 – 0.9785

Resistance: 0.9960 – 1.0000 – 1.0070

GBPUSD

The pound is trading around 1.1505 level. The pound is steady, but could still face the pressure from fiscal policy related issues. Also, the market waits for the interest rate decision on Thursday. Yet, the investors are now less sure of a 75bps rate hike because Rishi Sunak is new leader.

Back on the daily chart of the pound, resistance is at 1.1620/45 region. More upside, the resistance at 1.1720. The weekly 14-day Relative Strength Index (RSI) is returning back from oversold condition. On the downside, the first support at 1.1370 (50DMA), then 1.1290.

Support: 1.1370 – 1.1290 – 1.1060

Resistance: 1.1645 – 1.1720 – 1.1900

XAUUSD

Gold is trading around 1638 level. DXY is firmer ahead FOMC meeting. Also, US10-year treasury yield is trading around %4.03 level and 2Y is last seen around %4.45 level. but the sentiment is negative today. The Dollar Index is hovering around 110.85 level and US10-year treasury yields are below %4.03. while US2-year is last seen around %4.45 level, keeping the inversion to around -43bps. In addition, the real yield for US10-year is decreasing to 128bps, but FED is expected to announce a 75 bps rate hike with hawkish discourses. In other words, hawkish FED bets keep the gold bears hopeful.

Technically, below 1662 (21DMA) level, the sentiment for gold price is negative. Support is seen at 1630. More downside, the support is at 1617/15 region. On the upside, the resistance is at 1646. On the additional upwards, 1662 is seen as crucial resistance.

Support: 1630 – 1617/15 – 1605

Resistance: 1646 – 1662 – 1680

 

[Z Forex]

Hawkish FED on the stage. BoE policy decision will be followed.

FED hiked federal funds rate to %3.75-%4.00 with a 75bps rate hike as widely expected. In other words, FED continue to hike rates aggressively. However, the statement suggested policymakers would soon slow the pace of Quantitative Tightening (QT). After the statement released, the Dollar Index sold somewhat untill FED Powell speech. Then, Powell said inflation needs to be taken down ‘decisively’. Also, he added FED is ready to change the monetary policy as needed. He referred that slowing the pace of rate hikes will become necessary at some point, but that will may take time for inflation to come down. Critically, he said that the ultimate level of rates would be higher than previously expected. Hence, the optimism in the market was gone immediately. Losses quickly reversed because Powell speak hawkish. Dollar Index climbed 112.17 level. In addition, US treasury yields jumped to the highest levels.

In Asia, the market mood is pessimistic because the discourses related to exit Covid Zero turned up false. China announced a new lockdown, this particular one, involving the area around the world's largest iPhone factory. In addition, today the eyes will be on BoE’s policy rate decision. The BoE is expected to hike rate by 75bps and could bring in some volatility for Sterling. Also, today’s key data will be US Initial Jobless Claim and ISM services in U.S.


EURUSD

The EURUSD is trading around 0.9830 level. The pair is losing momentum because the spread for EU-USD 10-year yield reached -196bps after hawkish FED. Still, the news of Russia’s resuming its participation in the Black Sea grain-export deal probably provided some support to the EURUSD. The U -turn from Russia came after written guarantees from Ukraine that the corridor will only be used for grain export.

Technically, below 0.9835 level (21DMA) the momentum is negative for the EURUSD. Resistance is seen at 0.9835. More upside, resistance is around 0.9915. The support for the pair is first at 0.9780, before then at 0.9700. We follow consolidative action 0.9635 – 1.0090 range for the parity.

Support: 0.9780 – 0.9700 – 0.9635

Resistance: 0.9835 – 0.9915 – 1.0000

GBPUSD

The pound is trading around 1.1410 level. The risk off profile is seen in the market, so the DXY index is on the increase. On the other hand, the eyes will be on BoE’s policy rate decision today. The BoE is expected to hike rate by 75bps and could bring in some volatility for Sterling. If the BoE makes less than expected, the divergence FED-BoE will increase, and the markets sentiment change negatively.

Back on the daily chart of the pound, the main support is still at 1.1310/70 region (21DMA/50DMA). If the region breaks down, the next support will be at 1.1240. On the upside, the resistance at 1.1645. On the downside, the main support at 1.1360 (50DMA), then 1.1275.

Support: 1.1360/10 – 1.1240 – 1.1135

Resistance: 1.1565 – 1.1645 – 1.1740

XAUUSD

Gold is trading around 1638 level. DXY is on the increase after Hawkish FED. Also, US10-year treasury yield is trading around %4.11 level and 2Y is last seen around %4.63 level, but the sentiment is negative today because FED may reduce the size of hikes from December Meeting, but the inflation risks still on the agenda, so the Powell attached importance to that “ultimate level” of the terminal rate (peak rate) may be higher than projections. Additionally, the real yield for US10-year is increasing to 136bps.

Technically, below 1655 (21DMA) level, the sentiment for gold price is negative. Support is seen at 1630. More downside, the support is at 1617/15 region. On the upside, the resistance is at 1655. On the additional upwards, 1679 is seen as crucial resistance.

Support: 1630 – 1617/15 – 1605
Resistance: 1647 – 1655 – 1669

UKOIL

Brent prices is hovering around 95.85 level. the discourses related to exit Covid Zero turned up false. China announced a new lockdown involving the area around the world's largest iPhone factory.

Technically, below 93.55 (21DMA), the momentum is negative for the black metal. Also, the daily stochastic indicator is overbought condition. The main resistance is at 96.45 then at 98.00 (100DMA). On the downside, 93.55 is seen as support level. If broken, the next will be at 92.60 level (50DMA).

Support: 94.00 – 93.55 – 92.60

Resistance: 96.45 – 98.00 – 98.65

 

[Z Forex]

Last week, Central Banks continued to make rate hikes. FED increased its funding rate by 75bps to the range of %3.75 - %4.00. Also, BoE raised its policy rate to %3.00 by a 75bps rate hike as widely expected. It is the first Jumbo hike since 1989. However, the BoE officials revised the UK inflation forecast for the fourth quarter to rise %11.00.

Furthermore, unemployment rate increased in the U.S. Non-farm payrolls lifted up by 261K in October more than expected 200K. The labor force participation rate was %62.2 while the unemployment rate rose from %3.50 to %3.70. The average NFP for this year thus far is around 415K. Average hourly earnings rose by 4.7% YoY, indicating a slight slowdown from %5.00 in September. Employment gains in October were recorded in health care (53K), professional and technical services (43K) and manufacturing (32K).

Today, the dollar Index (DXY) is trading 111.10 level. UST yields were largely steady after the release with the 2y yield only slightly lower at %4.70 seen this morning. FED Fund futures now imply market expectations for the terminal rate to be around %5.1 by Jun 2023. The spread between US 2-10years is -54bps.

EURUSD

The EURUSD is trading around 0.9935 level. The pair is gaining momentum because the expectations for Covid19-zero policy will over in China. Today, the economic calendar is silence. Yet, Wall Street Journal published an article on ongoing US and Russia discussions to restrain a wider conflict over Ukraine. While there were no discussions on peace settlement, ongoing Also, EU-US 10y yield differential is last seen around - 185bps.

Technically, the momentum is positive for the EURUSD above 0.9740 level. Resistance is seen at 0.9975. More upside, resistance is around 1.0095. The support for the pair is first at 0.9910, before then at 0.9830. We follow consolidative action 0.9740 – 1.0165 range for the parity.


Support: 0.9910 – 0.9830 – 0.9740

Resistance: 0.9975/1.00 – 1.0095 – 1.0165

GBPUSD

The pound is trading around 1.1315 level. The risk on profile is seen in the market, so the DXY index is mixed. On the other hand, the focus will be on medium-term fiscal plan. The plan will release on November 17 by the Chancellor Hunt. Also, the eyes will be on the windfall taxes on energy firms and cuts in the Budget.

Back on the daily chart of the pound, above 1.1330 level the momentum will be positive. The main support is still at 1.1150. If that level breaks down, the next support will be at 1.1060. On the upside, the resistance at 1.1380, then at 1.1330.

Support: 1.1230 – 1.1150 – 1.1060

Resistance: 1.1380 – 1.1545 – 1.1695

XAUUSD

Gold is trading around 1668 level. DXY is decreasing China-related risk aversion. Also, US10-year treasury yield is trading around %4.17 level and 2Y is last seen around %4.70 level, but the sentiment is mixed today because the inflation data will be released in U.S. on Thursday. Additionally, the real yield for US10-year is increasing to 145bps.

Technically, below 1673 level (50DMA), the sentiment for gold price is negative. Support is seen at 1660/57 region. More downside, the support is at 1641. On the upside, the resistance is at 1680/84 region. On the additional upwards, 1700 is seen as crucial resistance.

Support: 1660/57 – 1641 – 1630

Resistance: 1680/84 – 1700 – 1714

UKOIL

Brent prices were positively affected last week as news of Beijing's zero-COVID policy spread. However, the upward movement in prices was limited after officials said that they were sticking to the country's policy. Brent prices in the new week will be determined depending on whether China changes its policy. We also follow US inflation data. If the inflation data is higher than expected the expectations that the FED's hawkish stance will increase may rise even higher and Brent prices may be suppressed as DXY will strengthen.

Technically, the momentum is positive for the black metal above 93.75 (21DMA). Also, the daily stochastic indicator is overbought condition. The main resistance is at 97.60 (100DMA). More upside, 0.9860 will be seen the next resistance. On the downside, 94.30 is seen as support level. If broken, the next will be at 93.65 level.

Support: 94.30 – 93.65 – 92.60

Resistance: 97.60 – 98.60 – 100.00

 

[Z Forex]

Yesterday, the markets are generally silence. The Dollar Index is falling, but US treasury yields are rising firmly. The 10-year US treasury bond yield is trading around %4.22 and US 2-year yield is hovering at %4.72.

Additionally, there is speculation that FED will ease the pace of quantitative tightening regardless of Powel’s hawkish speech last week. Also, the cases related to Covid in China are on the increase. Thus, restrictive measures may be taken.

Today, the focus will be on US mid-term elections, as well as the Bundesbank symposium.


EURUSD

The EURUSD is trading around the 0.9990 level. The pair is gaining momentum because the Dollar Index is retracing. Today, the economic calendar is silence. The only important data is related to Retail sales from Eurozone. The data is expected to announce better than previous by -%1.30 vs previous -%2.0 year-on-year in September. Also, EU-US 10Y yield differential is last seen around -189bps.

Technically, the momentum is positive for the EURUSD above 0.9750 level. Resistance is seen at 1.0030. More upside, resistance is around 1.0095. The support for the pair is first at 0.9920, before then at 0.9830. We follow the consolidative action 0.9750 – 1.0175 range for the parity.


Support: 0.9920 – 0.9830 – 0.9750

Resistance: 1.0030 – 1.0095 – 1.0175

GBPUSD

The Pound increased against Dollar on Monday and trading around 1.1470 level. The market focused the midterm elections and CPI inflation data. It can be supported FED’s policy on interest rates and DXY. Therefore, Pound’s uncertainties will disappear. On the other hand, the focus will be on medium-term fiscal plan. The plan will release on November 17 by the Chancellor Hunt. Also, the eyes will be on the windfall taxes on energy firms and cuts in the Budget.

Back on the daily chart of the pound, above 1.1330 level the momentum will be positive. On the upside, the resistance at 1.1545, then at 1.1640. The main support is still at 1.1330. If that level breaks down, the next support will be at 1.1230.

Support: 1.1330 – 1.1230 – 1.1150

Resistance: 1.1545 – 1.1640 – 1.1730

XAUUSD

Gold is trading around 1669 level. US Treasury yields are increasing because the number of new covid cases are on the increase in China. Hence, US10-year treasury yield is trading around %4.22 level and 2Y is last seen around %4.72 level, but the market is silence today because the mid-election will continue all day. Additionally, the real yield for US10-year widens to 148bps.

Technically, below 1673 level (50DMA), the sentiment for gold price is negative. Support is seen at 1657 level. More downside, the support is at 1641. On the upside, the resistance is at the 1682 level. On the additional upwards, 1700/1705 is seen as a crucial resistance region.



Support: 1657 – 1641 – 1630

Resistance: 1682 – 1700/1705 – 1714

UKOIL

Brent prices hovering two-month high at 97.00 - 98.00 region. Oil prices were positively affected as China’s oil imports increased to a five-month high in October that announced yesterday. Chinese authorities said there is no zero-COVID policy. Therefore, it is thought that the largest oil importer Chinese’s demand will be limited. It is also expected that the midterm elections and CPI inflation data in the U.S. and finally whether the FED maintains its hawkish outlook.

Technically, the momentum is positive for the black metal above 97.45 (100DMA). Also, the daily stochastic indicator is overbought condition. The main resistance is at 98.80 (yesterday high). More upside, 0.9880 will be seen the next resistance. On the downside, 96.50 is seen as support level. If broken, the next level will be at 95.20.

Support: 97.10 – 96.50 – 95.20

Resistance: 98.80 – 100.00 – 102.75

 

[Z Forex]

China inflation decreased more than expected. The results of Mid-term election will be followed.

In the U.S. the mid-term election results are followed closely with markets betting on Republicans to take back the House and create a gridlock in Washington. If so, Republicans looks to win back power in Congress, and stop Biden. Thus, the market is trading risk-on mood. Investors also await the October inflation report due on Thursday for hints on how much further the Federal Reserve may tighten financial conditions as it seeks to cool an overheating economy.

Additionally, this morning, China's annual inflation decreased to %2.10 YoY in October 2022 (previously % 2.8), compared with market consensus of % 2.50. This is the lowest figure since May because a slowdown in cost of both food and non-food.

Furthermore, the Dollar Index (DXY) softens, but US treasury yields remain firm. We follow 109-113 range for the DXY. The real rate for US10-year is still around 145bps. Also, the target rate probabilities for 14 Dec FOMC meeting are increasing at %43.20. Today’s key date include US Wholesale inventories, MBA Mortgage applications.

EURUSD

The EURUSD is trading above the parity at 1.0065 level. The pair is gaining momentum because the Dollar Index is falling. Also, optimism over Ukrainian Zelensky’s mention of being open to “genuine peace talks” with Russia give way to the pair to lift to 1.0095 level. In Eurozone, the economic calendar is silence today.

Technically, the momentum is positive for the EURUSD above 1.0000 (psychological level). Resistance is seen at 1.0095. More upside, resistance is around 1.0170/75 region. The support for the pair is first at 0.9970, before then at 0.9920. We follow consolidative action 0.9750 – 1.0210 range for the parity.


Support: 0.9970 – 0.9920 – 0.9885

Resistance: 1.0095 – 1.0170 – 1.0210

GBPUSD

Pound gains are being suppressed as DXY's decline ends. GBP/USD is hovering 15.45 level. The market focused on midterm elections and CPI inflation data. If Republicans chairs prevail against the Democrats, investors are less risk aversion. In addition, CPI inflation data will be closely monitored. Future data could be decisive for the Fed's policy rate and the dollar's value against the pound. On the other hand, the focus will be on medium-term fiscal plan. The plan will release on November 17 by the Chancellor Hunt. Also, the eyes will be on the windfall taxes on energy firms and cuts in the Budget.

Back on the daily chart of the pound, above 1.1380 level the momentum will be positive. On the upside, the resistance at 1.1595, then at 1.1640. The main support is still at 1.1380. If that level breaks down, the next support will be at 1.1330.

Support: 1.1430 – 1.1380 – 1.1290

Resistance: 1.1595 – 1.1640 – 1.1730

XAUUSD

Gold is trading around 1712 level. The yellow metal increases 1717 level (100DMA) one-month high yesterday. Bets for less aggressive FED rate hikes support the gold price and the number of new covid cases are also on the increase in China. Hence, US10-year treasury yield is trading around %4.14 level and 2Y is last seen around %4.66 level. Additionally, the real yield for US10-year widens to 145 bps.

Technically, above 1674 level (50DMA), the sentiment for gold price is positive. Support is seen at 1697 level. More downside, the support is at 1690. On the upside, the resistance is at 1717 (100DMA). On the additional upwards, 1728/30 is seen as crucial resistance region.

Support: 1697 – 1690 – 1682

Resistance: 1717 – 1728/1730 – 1740

UKOIL

Brent prices started to fall today with news of rising US crude oil stocks and China's increase in Covid-19 cases. While the expectation in US crude oil stocks increased by 1.1 million barrels, the data came as an increase of approximately 5.6 million barrels. In addition, the increasing number of cases in China strengthened the expectation that the zero-Covid policy would be abandoned. As a result, rising expectations of recession increase the expectation of a decline in black metal demand and put pressure on Brent prices.

Technically, the momentum is positive for the black metal above 93.80. On the downside, 9240 is seen as support level. If broken, the next level will be at 91.50. The main resistance is at 97.30 (100DMA). More upside, 0.9825 will be seen the next resistance.

Support: 93.80 – 92.40 – 91.50

Resistance: 97.30 – 98.25 – 99.55

 

[Z Forex]

DXY turns back, US inflation will be released today. The results of Mid-term election will be followed. Binance backed out of its plans to acquire FTX.

The Dollar Index (DXY) is trading around 110.00 level. Investors are looking ahead to a key US inflation report while constantly following mid-term election results. The mid-term election results are expected Republicans to take back the House and create a gridlock in Washington. On the other hand, the inflation data will be closely followed. If the prints come a hotter than expected, FED may do another 75bps rate hike for December meeting. Now, the headline inflation is at %8.20 and the expectation in October %8.00. Also, the core inflation is around %6.60 which is a 40-year high.

Additionally, the cases related to Covid19 are still on the increase. Thus, the restrictions and lockdowns are enforced over again. Besides, Russia's military has been ordered to pull out of the Ukrainian city of Kherson, the only regional capital it captured after invading in February. Also, news showed that Putin would not attend the G-20 summit.

Furthermore, Binance, the world's biggest cryptocurrency exchange, abandon a bailout deal of its smaller rival FTX. FTX had been struggling with a surge in withdrawals that caused a "liquidity crunch". In addition, The U.S. securities regulator is investigating crypto exchange FTX.com's handling of customer funds amid a liquidity crunch according to Reuters.

Today, FED officials Esther and Mester speak at events. Also, Thursday’s key date includes US CPI, US initial jobless claims.


EURUSD

The EURUSD is trading above the parity at 1.0040 level. The pair bounced off 0.9992 level yesterday, because the market is anxious ahead of US inflation data. Also, DXY is rising today due to the fact that FED officials continue to speak hawkish tone. Yesterday, Minneapolis FED chief Kashkari said We will do what we need to do to bring inflation back down’. On the other hand, Russia pulled out of Kherson. This is the opportunity for Western allies to start talks with Putin.

Technically, the momentum is positive for the EURUSD above 1.0000 (psychological level). Also, the daily stochastic indicator is overbought condition. Resistance is seen at 1.0095. More upside, resistance is around 1.0185 level. The support for the pair is first at 0.9930, before then at 0.9870. We follow consolidative action 0.9750 – 1.0210 range for the parity.


Support: 0.9930 – 0.9870 – 0.9765

Resistance: 1.0095 – 1.0185 – 1.0210

GBPUSD

Pound gains are quite limited and is hovering 14.05 level. The market focused on CPI inflation data. If the data comes lower than expectations FED’s hands relieve on interest rate policy. Thus, the Dollar can cease rising against pound. But on the contrary, DXY would reinforce rising and GBP start falling against Dollar. Also, UK wage growth and recruitments easing in October as KPMG and Recruitment and Employment Confederation’s report. The medium-term fiscal plan will release on November 17 by the Chancellor Hunt. The eyes will be on the windfall taxes on energy firms and cuts in the Budget.

Back on the daily chart of the pound, above 1.1330 level the momentum will be positive. On the upside, the resistance at 1.1410, then at 1.1640. The main support is still at 1.1330. If that level breaks down, the next support will be at 1.1235.

Support: 1.1330 – 1.1235 – 1.1150

Resistance: 1.1410 – 1.1575 – 1.1705/15

XAUUSD

The yellow metal touched 1722 level yesterday, because of the DXY’s weakness. Today, Gold is trading around 1710 level and the eyes will be on US inflation data. In addition, China’s covid numbers still pose problem for supply chain. On the other hand, Russia’s retreat from Kherson give hope about the normalization to the investors for a while. Lastly, US10-year treasury yield is trading around %4.09 level and 2Y is last seen around %4.60 level. Additionally, the real yield for US10-year widens to 145 bps.

Technically, above 1674 level (50DMA), the sentiment for gold price is positive. Support is seen at 1701 level. More downside, the support is at 1686. On the upside, the resistance is at 1722 level. On the additional upwards, 1730/34 is seen as crucial resistance region.

Support: 1701 – 1686 – 1673

Resistance: 1722 – 1730/34 – 1757

UKOIL

Brent prices ceased its rise with China's Covid-19 cases and the surprising rise in US crude inventories. Black metal reacted to rising demand decline and expectations of recession. Today, US CPI Inflation data will be released. With the interest rate policy to be determined by the FED according to the inflation data, the stagnation uncertainties can be lower. Brent prices will be shaped by the progress in China's Covid-19 case numbers and the CPI data to be announced.

Technically, the momentum is negative for the black metal below 93.70 (21DMA). On the downside, 92.35 is seen as support level. If broken, the next level will be at 91.50. The main resistance is at 93.70 level. More upside, 0.9565 will be seen the next resistance.

Support: 92.35 – 91.50 – 89.40

Resistance: 93.70 – 95.65 – 97.25

 

[Z Forex]

EURUSD

Optimism returned the market after failing US inflation data. The DXY dropped sharply. The inflation may have really begin to turn around and FED thus start the slowing pace of tightening. However, ECB said risks to the economic growth outlook are “clearly on the downside, especially in the near term”. Risks to the inflation outlook are “primarily on the upside” in the monthly economic bulletin. Also, European Comission releases Economic Growth Forecasts today.

Technically, the momentum is positive for the EURUSD above 1.0000 (psychological level). Also, the break of 1.0095 resistance confirms the bullish momentum. on the upside for %38.2 retracement of 1.1494 to 0.9534 at 1.0283, even as a corrective rise. Yet, the daily RSI indicator is overbought condition. The next resistance is seen at 1.0385 (200DMA). The support for the pair is first at 1.0165, before then at 0.9935 (50DMA).


Support: 1.0165 – 1.0040– 0.9935

Resistance: 1.0285 – 1.0385 – 1.0460

GBPUSD

The pound started off with quite a few gains and is hovering around 17.10. US Inflation data came in below expectations and DXY fell to 107. The pound will continue to rise against the dollar if supported by the growth data to be released today. Together with the macroeconomic data, the risk aversion behavior of investors against the dollar will be shaped. Wage growth and hiring in the UK eased in October, according to a report by KPMG and the Recruitment and Employment Confederation yesterday. Today, the growth rate in the UK will be followed closely.

Back on the daily chart of the pound, above 1.1730 level the momentum will be positive. On the upside, the resistance at 1.1845, then at 1.2050. The main support is still at 1.1520. If that level breaks down, the next support will be at 1.1460.

Support: 1.1520 – 1.1460 – 1.1330

Resistance: 1.1730 – 1.1845– 1.2050

XAUUSD

The yellow metal is increasing sharply and last seen at 1758 level. After the US inflation data released, the Dollar Index (DXY) dropped sharply. To put in another words, a cooler-than-expected US inflation report increased hopes for peak inflation and a slower pace of interest rates hikes from FED. The CME group FedWatch tool indicates that the target rate probabilities for the December meeting is 50bps rate hike with the %85 probability. US treasury yields also declined sharply since the investors updated expectations for the terminal rate lower, with the benchmark 10-year US yield decreasing toward %3.80 for the first time in over a month. Lastly, US10-year treasury yield is trading around %3.85 level and 2Y is last seen around %4.32 level. Additionally, the real yield for US10-year tightens to 124 bps.

Technically, above 1727 level, the sentiment for gold price is positive. Support is seen at 1747 level. More downside, the support is at 1727 level. On the upside, the resistance is at 1764 level. On the additional upwards, 17782 is seen as crucial resistance level.


Support: 1747 – 1727 – 1673

Resistance: 1764 – 1782 – 1803

UKOIL

Brent prices continues its rise with slow down U.S inflation data. Through lower-than-expected inflation data, the expectations of FED’s interest rate policy as rising 75bps is not on the table no longer. Black metal is supported with DXY falling but rising Covid-19 cases in China is maintain its importance. Largest importer Chinese demand is the best decider on black metal and zero-Covid policy is needed to be followed closely. Brent prices can continue its rising which is being stronger with lower-than-expected U.S inflation data, lower Chinese Covid cases and rising demand.

Technically, the momentum is negative for the black metal below 93.80 (21DMA). On the downside, 92.40 is seen as support level. If broken, the next level will be at 91.70/50 region. The main resistance is at 96.95 level. More upside, 98.30 will be seen the next resistance.

Support: 93.65 – 92.40 – 91.70

Resistance: 96.95 – 98.30 – 99.95/100.00

 

[Z Forex]

Risk appetite is mixed, G20 Summit is in focus.

The dollar index (DXY) is trading around 107.00 level, rising slightly from near three-month lows after that FED's Waller warned investors against getting too optimistic over one inflation report. He also said that the central bank “still got a way to go” with interest rate hikes. Furthermore, he stated that the Fed may slow the pace of rate increases in the upcoming meetings but highlighted that markets should focus on the terminal rate which is likely still “a ways off” rather than the pace of each move. Investors are betting that the central bank would moderate the size of their rate hikes to 50 basis points from December after a series of 75 basis point moves in the past four meetings. Also, US treasury yields are recovering with the hawkish explanations by FED's Waller. US10-year is hovering at %3.90 while US2-year is trading near at %4.42 In addition, the real rate yield narrows up to 128bps.

G20 summit will be in focus. Leaders come together in Bali, Indonesia. Eyes will be on Xi-Biden meeting. Today, the economic calendar will be silence, but some central banks' governor have a speech. Also, the investors will be keeping an eye on earnings reports from big retailers and the state of the crypto market after one of the biggest exchange FTX filed for bankruptcy.

EURUSD

The EURUSD is rocketing up to a high of 1.0364 on last week because the Dollar Index encountered sell off. In other words, China re-opening plays and the expectation of less aggressive Fed tightening from the market gave way to lift EUR above aggressively.

Technically, the momentum could be slower because the daily stochastic and RSI(14) are in overbought condition. Any pullback could meet support at 1.0230. The next support is seen at 1.0165. On the upside, the resistance for the pair is first at 1.0385, then at 1.0460. We look for consolidative trade within 1.0165 -1.0515.


Support: 1.0230 – 1.0165– 1.0030

Resistance: 1.0385 – 1.0460 – 1.0515

GBPUSD

The pound is trading around 1.1760. The pound touched 1.1858 on Friday closing because of DXY weakness. In addition, Rishi Sunak’s rise to power in the UK presents a new opportunity to resolve its standoff with EU over Northern Ireland’s trade arrangements. Thus, UK-EU Northern Ireland deal is “doable” by year-end. What is more, the eyes will be on the Budget in UK. The UK Chancellor Hunt will
announce the Autumn Budget on Thursday that will likely point to sharp spending cuts and tax increases to fill the £50billion fiscal hole in the UK public finances.

Back on the daily chart of the pound, above 1.1730 level the momentum will be positive. On the upside, the resistance at 1.1845, then at 1.2050. The main support is still at 1.1730. If that level breaks down, the next support will be at 1.1460.

Support: 1.1730 – 1.1460 – 1.1335

Resistance: 1.1860 – 1.1940– 1.2050

XAUUSD

The yellow metal is increasing sharply and last seen at 1760 level. After the US inflation data released, the Dollar Index (DXY) dropped sharply. Today, the DXY started the correction and trading near 107.00 level. Also, US treasury yields are gathering strength and US 10-year treasury yield is hovering around to %3.90 level while US 2-year treasury yield was last seen at %4.42. Additionally, the real yield for US10-year was last seen 128 bps.

Technically, above 1727 level, the sentiment for gold price is positive. Support is seen at 1758 level. More downside, the support is at 1747 level. On the upside, the resistance is at 1773 level. On the additional upwards, 1785 is seen as crucial resistance level.

Support: 1758– 1747 – 1673

Resistance: 1773 – 1785 – 1803

UKOIL

Brent price continues its rise with the rumors Chine re-opening. In other words, the expectations related to demand outlook for Brent will be on the increase by China which is the world’s top crude importer lead the black metal to remain firm. Also, lower-than-expected inflation data in U.S. gives way to the expectations of FED’s interest rate policy as rising 75bps is not on the table no longer. Thus, brent price is supported with DXY falling.

Technically, the momentum is mixed for the black metal below 96.80 (100DMA). On the downside, 95.20 is seen as support level. If broken, the next level will be at 93.95 (21DMA). The main resistance is at 96.95 level. More upside, 98.30 will be seen the next resistance.

Support: 95.20 – 93.95 – 91.75

Resistance: 96.95 – 98.30 – 99.55

 

[Z Forex]

Japanese Economy shranked, China’s retail sales dropped. G20 Summit is in focus.

The Japanese economy became narrow in Q3 by shrinking -%1.20, missing market consensus of a %1.10 growth annually because of global inflation pressure and a slump in the Japanese Yen. Also, China’s retail sales decreased by %0.50 YoY in October, previously %2.50 gain in September. Due to the increase in Covid19 infections and restrictions led to fall in consumption.

Today, the dollar index (DXY) is trading near 107.00 level, rising slightly from near three-month lows. Furthermore, FED officials signaled that US rates could end higher than previously anticipated and as US inflation expectations picked up for the first time in four months. G20 Summit in Bali focus today and tomorrow. Today, there are lots of central bankers speaking including ECB Guindos, BoE Ville and Fed Harker and Vice Chair Barr speaking as well as Fed Williams in Panel. Guindos, Villeroy, BoE Hue Pill, Fed Harker and Vice Chair Barr speaking as well as Fed Williams in Panel. Also, US PPI will be the key data that the investors focus on.

EURUSD

The EURUSD is trading 1.0365 (Friday’s high). The geopolitical risk decreases because Russian forces driven out of Kherson might have aided EUR’s climb on top of broader. Also, the Dollar Index is back above the 107.00 level, but non-permanent at that level.

Technically, the momentum is positive today. If the region 1.0385/90 is broken, the parity may test the level 1. 0430. The next at 1.0510. Any pullback could meet support at 1.0270 (yesterday’s low). The next support is seen at 1.0165. We look for consolidative trade within 1.0165 -1.0550.


Support: 1.0270 – 1.0165– 1.0030

Resistance: 1.0430 – 1.0510 – 1.0570

GBPUSD

The pound is trading around 1.1815. Recently macroeconomic data came highly strengthen from British side and these data supported pound against dollar. The employment data was announced shortly before is same direction last advances. Today, Pound traders’ ears are on the US producer price index. Pound can demonstrate rising against dollar through lower-than-expected inflation for producer. Besides, the eyes will be on the Budget in UK. The UK Chancellor Hunt will announce the Autumn Budget on Thursday that will likely point to sharp spending cuts and tax increases to fill the £50billion fiscal hole in the UK public finances.

Back on the daily chart of the pound, above 1.1710 level the momentum will be positive. On the upside, the resistance at 1.1860, then at 1.1990. The main support is still at 1.1710. If that level breaks down, the next support will be at 1.1650.

Support: 1.1710 – 1.1650 – 1.1475

Resistance: 1.1860 – 1.1990– 1.2245

XAUUSD

The yellow metal is increasing sharply and last seen at 1775 level. After the US inflation data released, the Dollar Index (DXY) dropped sharply. Today, the US producer price index is being waited. The DXY is looking for direction and if the data comes lower than expected, this direction may be towards down. Also, US treasury yields are gathering strength and US 10-year treasury yield is hovering around to %3.85 level while US 2-year treasury yield was last seen at %4.38. Additionally, the real yield for US10-year was last seen 127 bps.

Technically, above 1761 level, the sentiment for gold price is positive. Support is seen at 1761 level. More downside, the support is at 1751 level. On the upside, the resistance is at 1783 level. On the additional upwards, 1802 is seen as crucial resistance level.


Support: 1761 – 1751 – 1733

Resistance: 1783 – 1802 – 1845

UKOIL

Brent price fluctuates with Covid-19 cases in China and slowing growth. Also OPEC decreased its predictions about globally demand. Black metal ceased its rising yesterday and is hovering around 92.70. Expectations regarding the oil demand of China, the world's largest importer of crude oil, will be an important indicator for Brent's outlook. However, the Covid-19 case data from China is not yet at the desired level. In addition, the markets are waiting for the US producer price index data today. Lower-than-expected inflation data in the US will mean that the Fed's 75 basis point rate hike is no longer on the table. Thus, Brent price will be supported by falling DXY and increasing risk appetite.

Technically, the momentum is negative for the black metal below 93.90 (21DMA). On the downside, 92.35 is seen as support level. If broken, the next level will be at 91.75. The main resistance is at 93.90 level. More upside, 95.45 will be seen the next resistance.

Support: 92.35 – 91.75 – 91.00

Resistance: 93.90 – 95.45 – 96.95

 

[Z Forex]

COVID cases and restrictions or lockdowns in several cities in China.

This morning, the People's Bank of China (PBoC) hold its key lending rates unchanged at %3.65 while the five-year rate, a reference for mortgages, was maintained at %4.30. Still, the downward pressure on the yuan continue and a slowdown in economic activity due to rising COVID cases and restrictions or lockdowns in several cities is on the agenda. At the weekend, China reported the first Covid death in six months.

The dollar index continues to remain firm. Today, it was last seen at 107.30 level due to the fact Covid-related concerns in China. Also, FED officials continue to speak hawkish. Last week St. Louis FED President James Bullard said that the policy rate could reach the 5% to 7% range in order to bring down inflation according to Taylor-Rule for monetary policy. However, the investors are betting that the FED would deliver a 50-basis point rate hike in December, and a series of 25-basis point increases next year. UST2y10y inversion widens to -70bps with US10-year at 3.80% and US2-year near 4.51%

This week, the market will focus on FOMC meeting minutes, and some speaks by FED officials for signs on the size of the next interest rate hike in December. Today, Germany PPI data will be published, and ECB Holzmann is speaking today.



EURUSD

The EURUSD is decreasing this morning because of weaker risk appetite. Last Friday, ECB Lagarde said ECB will increase the interest rate to control the inflation. However, fears of broader lockdowns in China and political uncertainties in Malaysia continue to make pressure on the parity. Now, the EURUSD is trading around 1.0280 level. Today, Germany PPI data will be published, and ECB Holzmann have a speech.

Technically, the momentum is negative because DXY remain firm at 107.30 level after Covid-related concerns in China. For the first resistance, 1.0335 should be followed. Further bullish extension is likely to be slower. Also, the daily RSI is turning from the overbought condition. Any pullback could meet support at 1.0280. The next support is seen at 1.0205. We look for consolidation between 1.00 – 1.05.

Support: 1.0280 – 1.0205– 1.0140

Resistance: 1.0335 – 1.0410 – 1.0480

GBPUSD

The pound was seen around 1.1830 level. Due to the fact that the Covid cases are on the increase in China, the market runs risk-off mode. Also, the sterling is under pressure after UK Finance Minister Jeremy Hunt announced the spending cuts and tax hikes worth £55 billion. Today, the focus shifts toward the Bank of England (BoE) Deputy Governor Jon Cunliffe’s speech due later this Monday.

On the daily chart of the pound, above 1.1750 level the momentum will be positive. On the upside, the resistance at 1.1895, then at 1.1960. Also, the daily stochastics is turning back from overbought conditions. On the downside, the key support is still at 1.1750. If that level breaks down, the next support will be at 1.1680.

Support: 1.1750 – 1.1680 – 1.1595

Resistance: 1.1895 – 1.1960– 1.2030

XAUUSD

The yellow metal is hovering around 1746 level. After FED officials’ hawkish comments and China’s covid woes, the Dollar Index continue to recover the losses. In other words, the investors remain slow and sure amidst China’s covid restrictions and hawkish Fed outlook on the terminal rates. Also, US 10-year treasury yield is trading around to %3.80 level while US 2-year treasury yield was last seen at %4.51. Additionally, the real yield for US10-year was last seen 128 bps.

Technically, below 1745 level, the sentiment for gold price is negative. Support is seen at 1736 level. More downside, the support is at 1722 level. On the upside, the resistance is at 1756 level. On the additional upwards, 1765 is seen as crucial resistance level.

Support: 1736– 1722 – 1712

Resistance: 1756 – 1765 – 1776

UKOIL

Brent prices tested lowest value for last two months and hover around 87.10 level. Chinese Covid-19 cases support this decline. The city of Guangzhou, economically powerful city for China, has been in lockdown since increasing Covid-19 cases. Decreasing demand through the corresponding recession is to decide the direction of black metal. Also, this week, investors are waiting for the Fed's November meeting minutes to be released. Whether the Fed will increase its hawkish behavior will be decisive for risk appetite. Also, black metal followers are looking forward to OPEC's meeting on December 4. OPEC will decide on the production cut at this meeting.

Technically, the momentum is negative for the black metal below 92.30 (50DMA). On the downside, 84.40 (100WMA) is seen as support level. If broken, the next level will be at 83.65. The main resistance is at 88.90 level. More upside, 90.65 will be seen the next resistance.

Support: 85.80 – 84.40 – 83.65

Resistance: 88.90 – 90.65 – 92.30

 

[Z Forex]

Lockdowns in China. Risk appetite is negative.

In China, Covid cases are on the increase and new lockdowns are on the agenda. Yesterday, the daily record is broken again with the new more than 39.7K new Covid infections. Moreover, China PMI data will be followed closely on Wednesday. The economic activity may decrease because Covid curbs continue.

The dollar index is trading around 106.30 level. The safe haven demand is on the increase because protest against lockdowns in China continue. In addition, people call for the Communist Party and President Xİ Jinping to step down in Shanghai. Furthermore, local residents condemn the lockdowns in China.

This week, the market will focus on US Non-farm payrolls report and speeches by several FED officials. Today, the economic calendar is quiet. German Buba President Nagel have a speech.

EURUSD

EURUSD is trading around 1.0360 level. Risk-off mood remain in the forefront because the protests against lockdown in China is expanding. Also, Eurozone inflation data will also be in the spotlight. In October the data came at %10.60, but the European Central Bank (ECB)’s inflation target at %2.00. Still in Eurozone inflation pressure continue. Thus, ECB raised the rates 200bps since July to %1.50. For the next meeting (December 15), the market players expect at least 50bps rate hike, but some believe that ECB will raise 75bps hike.

Technically, below 1.0390 level, the momentum is negative. Support remains around 1.0295. Any pullback could meet support at 1.0220. The daily stochastics is turning lower overbought condition. On the upside, 1.0390 (200DMA) should be followed. Further bullish extension is likely to be slower since the risk sentiment is negative today. We look for consolidation between 1.00 – 1.05

Support: 1.0295 – 1.0220 – 1.0160

Resistance: 1.0390 – 1.0450 – 1.0480

GBPUSD

The pound has bounced back from a three-month high of 1.2155. It’s hovering 1.2065 today. DXY was limited falling due to uncertainties on global advances. This week, FED members’ speech and inflation data in Eurozone will be followed closely. The
British pound finds support with the decline in government bonds. This situation can be interpreted as a good sign for BOE's rate hike. The market has expectations on hawkish BOE but uncertainties about globally will direct BOE’s conducts on interest rate policy.

On the daily chart of the pound, below 1.2195 (200-DMA) level the momentum will be negative. The daily RSI (14) is so close to overbought conditions. On the downside, the key support is still at 1.2020. If that level breaks down, the next support will be at 1.1940. On the upside, the resistance at 1.2195, then at 1.2300.

Support: 1.2020 – 1.1940 – 1.1855

Resistance: 1.2195 – 1.2300 – 1.2360

XAUUSD

The yellow metal is trading around 1750 level. The risk appetite is decreasing because protests in China is expanding. In other words, Coronavirus fears are again on the increase. Hence, the DXY remain firm even as Treasury bond yields in US remain weak. Also, a 50bps rate hike priced by the investors for December meeting with the probability of %75. Today, US 10-year treasury yield was last seen around at %3.65 level while US 2-year treasury yield was at %4.43. Additionally, the real yield for US10-year came down at 112 bps.

Technically, above 1730 level, the sentiment for gold price is positive. Support is seen at 1746 region. More downside, the support is at 1739 level. On the upside, the resistance is at 1761 region. On the additional upwards, 1774 is seen as crucial resistance level.

Support: 1746 – 1739 – 1726

Resistance: 1761 – 1774 – 1786

UKOIL

Brent sales are raising its severity, hovering around 80.95, the lowest level in 11 months. Cases of Covid-19 continue to rise in China, and people have started protesting the government's strict policies as they don't like the lockdowns of cities. Black metal is under selling pressure due to demand concerns from the largest importer China, while at the same time it is under pressure due to price cap for Russian oil and the OPEC meeting. If OPEC decides to cut production and uncertainties about Russian oil clear, brent prices could limit its decline.

Technically, the momentum is negative for the black metal below 84.75 (100WMA). On the downside, 81.05 is seen as support level. If broken, the next level will be at 80.30. The main resistance is at 83.25 level. More upside, 84.75 will be seen the next resistance.

Support: 80.30 – 77.00 – 75.00

Resistance: 83.25 – 84.75 – 86.80

 

[Z Forex]

Risk appetite is mixed. China reopening rumors on the agenda.

The dollar index remains firm because FED officials give speech about that the rate will be hiked. Also, the Covid protests in China lead to the increase in demand for Dollar. Today, US10-year treasury yield is around %3.71 while US2-year bond yield is hovering around %4.47. The spread US10Y2Y widens -76bps. A negative 10-2 yield spread has historically been viewed as a precursor to a recessionary period, but has occurred 6-24 months before the recession occurring, and is thus seen as a far-leading indicator.

Besides, St. Louis FED President Bullard said yesterday that FED has a way to go on interest rate hikes and could keep hiking them and hold them until 2024 to fight inflation. He also stated that rates need to rise at least one percentage to between %5.00-%5.25. Still, the Fed is widely expected to slow the pace of tightening to 50 basis points in December meeting after delivering four straight 75 basis point increases. The investors also look ahead to a lot of US economic reports this week, as well as FED Chair Jerome Powell’s speech tomorrow.

In addition, the unemployment rate remained unchanged at %2.60 in October 2022 in Japan, but in August the data came at %2.50 which is the two-year low.

Furthermore, Cryptocurrency lender BlockFi has filed for Chapter 11 bankruptcy protection after the FTX’s bankruptcy. it said on Monday, the latest industry casualty after the firm was hurt by exposure to the spectacular collapse of the FTX exchange earlier this month.



EURUSD

EURUSD is trading around 1.0385 level. Risk-off mood remain firm because of the widespread of Covid protest in China. Despite the fact that the investors’ concerns that FED will be soon time to slow the pace of interest rate hikes, FED official continue to speak hawkish. Thus, we see the demand for the Dollar in the market. Besides, this week's economic calendar contains very important data. In particular, the inflation rate of the eurozone will be announced tomorrow. In October the data came at %10.60, but the European Central Bank (ECB)’s inflation target at %2.00.

Technically, below 1.0380 level, the momentum is negative. Support remains around 1.0220. Any pullback could meet support at 1.0220. The daily RSI is trading very close to overbought condition. On the upside, 1.0380 (200DMA) should be followed. Further bullish extension is likely to be slower since the risk sentiment is still negative. We look for consolidation between 1.0100 – 1.0560

Support: 1.0330 – 1.0220 – 1.0130

Resistance: 1.0465 – 1.0500 – 1.0560

GBPUSD

The pound is trading above 1.20 level. Yesterdays’ sell off after FED officials speech was remarkable. Still the risk aversion is in the spotlight because protests in China spread to multiple cities. Also, BoE’s Bailey has a speech today. The market has expectations on hawkish BOE, but uncertainties about globally will direct BOE’s conducts on interest rate policy. Please keep in mind that the next meeting for interest rate decision will be held on 15th December 2022.

On the daily chart of the pound, below 1.2170 (200-DMA) level the momentum will be negative. The daily stochastic is turning lower overbought conditions. On the downside, the key support is still at 1.1940. If that level breaks down, the next support will be at 1.1850. On the upside, the resistance at 1.2070, then at 1.2175.

Support: 1.1940 – 1.1850 – 1.1760

Resistance: 1.2070 – 1.2175 – 1.2280

XAUUSD

The yellow metal is trading around 1753 level. The risk appetite is still mixed. The Covid protests in China and FED official comments lead to the market to struggle for clear directions. Also, a 50bps rate hike priced by the investors for December meeting with the probability of %68. Today, US 10-year treasury yield was last seen around at %3.71 level while US 2-year treasury yield was at %4.47. Additionally, the real yield for US10-year is increasing 121 bps.

Technically, above 1730 level, the sentiment for gold price is positive. Support is seen at 1739 level. More downside, the support is at 1730 level. On the upside, the resistance is at 1763 level. On the additional upwards, 1774 is seen as crucial resistance level.

Support: 1739 – 1730 – 1723
Resistance: 1763 – 1774 – 1786

UKOIL

Brent is trading near 84.85 level. Due to the fact that China apply the strict Covid restrictions and ensue protests, the demand concerns from the largest importer China are on the decrease. Also, FED officials continue to speak hawkish, so the global recession expectations are increasing. In other words, weakened demand for the oil makes pressure on the price. Thus, OPEC+ may agree on another production cut in its next meeting to support oil prices.

Technically, the momentum is negative for the black metal below 84.75 (100WMA). On the downside, 82.35 is seen as support level. If broken, the next level will be at 80.60. The main resistance is at 86.95 level. More upside, 87.75 will be seen the next resistance.

Support: 84.65 – 82.35 – 80.60

Resistance: 86.95 – 87.75 – 89.90

 

[Z Forex]

FED Powell’s speech, USD GDP data and EU Inflation data will be followed.

The global markets had gone worse on Monday after protesters and police clashed over the forcible COVID restrictions. Thus, risk appetite is still mixed since the beginning of the week.

Today, the investors cautiously awaited Federal Reserve Chair Jerome Powell’s speech that could offer fresh clues on future rate hikes. However, FED officials signaling that interest rates will continue to rise well into next year as inflation remains stubbornly high. Also, the FED is expected to hike rates by an additional 50bps on Dec. 13-14 meeting. In addition, the odds of a 75-basis-point increase have risen over the past several weeks and now stand at a %37 probability. The swaps market is still pricing in a peak policy rate of 5.0%, with small odds of a 5.25% peak.

EURUSD

The EURUSD is trading around 1.0355 level. Still, the sentiment remains supportive of the Euro in that the European Central Bank remains committed to raising interest rates to combat high inflation. However, the investors feel uneasy about the geopolitics risk and raising COVID19 infections in China. Also, the investors now turn their attention to Powell’s appearance at the Brookings Institution for more guidance.

Technically, below 1.0375 level, the momentum is negative. Support remains around 1.0220. Any pullback could meet support at 1.0130. The daily stochastic is very close to oversold condition. On the upside, 1.0375 (200DMA) should be followed. Further bullish extension is likely to be slower since the risk sentiment is still mixed. We look for consolidation between 1.0100 – 1.0560

Support: 1.0320 – 1.0220 – 1.0130

Resistance: 1.0425 – 1.0510 – 1.0560

GBPUSD

Today is the last day of the month and eyes will also be on FED Powell’s speech. The pound is hovering around 1.1990 level The speech from Jerome Powell is expected to be less hawkish on interest rate guidance. In addition, inflation in UK do not show signs of meaningful slowdown yet. Thus, economists believe that the Bank of England is expected to advance the interest rate to %4.25 in the first quarter of 2023.

On the hourly chart of the pound, the pair is meeting recent lows in what could turn out to be a double bottom on the hourly timeframe. Yet, below 1.2160 (200-DMA) level the momentum will be negative. The daily stochastic have already turned lower overbought conditions. On the downside, the key support is still at 1.1940. If that level breaks down, the next support will be at 1.1850. On the upside, the resistance at 1.2070, then at 1.2160.

Support: 1.1940 – 1.1850 – 1.1760
Resistance: 1.2070 – 1.2160 – 1.2280

XAUUSD

The yellow metal was last seen at 1754 level. Still, there is mixed sentiment surrounding the apparent easing of unrest in China over coronavirus curbs. Thus, gold is treated between the range 1739-1763. Traders are also nervous while awaiting further important data from the US economy on Friday in the form of the Nonfarm Payrolls report. In addition, the speech from Fed Chair carries a significant impact as investors will get cues about a deceleration in the interest rate hike pace. Also, a 50bps rate hike priced by the investors for December meeting with the probability of %68. Today, US 10-year treasury yield was last seen around at %3.73 level while US 2-year treasury yield was at %4.70. Additionally, the real yield for US10-year is increasing 128 bps.

Technically, above 1730 level, the sentiment for gold price is positive. Support is seen at 1739 level. More downside, the support is at 1723 level. On the upside, the resistance is at 1763 level. On the additional upwards, 1774 is seen as crucial resistance level.

Support: 1739 – 1723 – 1709

Resistance: 1763 – 1774 – 1786

UKOIL

Brent is trading near 84.65 level. The OPEC+ remains worried about rising COVID19 infections in China and Russian oil sanctions. Hence, OPEC and its allies decide to keep oil output levels flat at their meeting on Sunday according to the Wall Street Journal. In addition, the meeting was planned to take place in person at OPEC’s headquarters in Vienna, but it will now be held remotely to avoid negative media scrutiny.

Technically, the momentum is negative for the black metal below 84.75 (100WMA). On the downside, 82.35 is seen as support level. If broken, the next level will be at 80.60. The main resistance is at 86.95 level. More upside, 87.75 will be seen the next resistance.

Support: 84.45 – 82.35 – 80.60

Resistance: 86.95 – 87.75 – 89.90