Forex-novosti i prognoze od 11-11-2024

• USD/CAD edges higher to around 1.3925 in Tuesday’s early Asian session. 
• Traders brace for the US CPI inflation data, which is due on Wednesday. 
• The concerns about possible tariffs by the Trump administration weigh on the Canadian Dollar. 

The USD/CAD pair gains traction to near 1.3925 during the early Asian session on Tuesday, bolstered by the firmer US Dollar (USD) amid the strong return of the "Trump trade.” The Canadian September Building Permits are due later on Tuesday. The US October Consumer Price Index (CPI) inflation data will take center stage on Wednesday. 

The US Dollar Index (DXY), a measure of the USD's value relative to a basket of foreign currencies, jumps to fresh four-month peaks around 105.70. The Greenback strengthens against the Canadian Dollar (CAD) after US election results showed Trump's victory. Analysts expect the US president-elect Donald Trump could put upward pressure on inflation and bond yields while proceeding to cut rates at a slower and smaller pace, supporting the USD. 

However, traders will take more cues from the US inflation data this week for clarity about future US policy. The headline CPI is estimated to show an increase of 2.6% YoY in October, while the core CPI is projected to show a rise of 3.3% during the same period.  

On the other hand, investor worries about possible tariffs by a new White House administration, which could hurt the Canadian economy, exerting some selling pressure on the Loonie. “The BoC slashed policy rates 50 bps in October, but a more cautious path of 25 bps moves over the coming months is more sensible given the post-election uncertainty and heightened risk to the Canadian dollar,” said the BMO economists.

• Eurozone’s thin economic docket and German bond yield dip contribute to EUR’s decline.
• Upcoming Aussie data includes Westpac Consumer Confidence and NAB Business Confidence.
• EUR/AUD technicals suggest potential further downside with key support near 1.6100.

The Euro began the week on a lower note against the Australian Dollar, drops over 0.45% late during the North American session. A risk-off mood trade in the currency market, keept investors worried about possible tariffs by the upcoming Trump’s administration.  The EUR/AUD trades at 1.6207, after reaching a daily high of 1.6284.

EUR/AUD falls as traders eye potential tariffs under Trump and await key Australian data

A scarce economic docket in the Eurozone and Australia, left traders adrift to sentiment linked to the newly elected US President Donald Trump. However, European Central Bank (ECB) members Yannis Stoumaras commented ECB rates will hit 2% goal in September of 2025.

Another reason behind the Euro’s fall was the drop of the 10-year German Bund yield, down two basis points to 2.33%.

In the meantime, the Aussie’s economic docket will feature on Tuesday the release of the Westpac Consumer Confidence for November. October’s reading was 89.8, and any measure below that level, would indicate that Australians are feeling less optimistic on the economy.

Later, the Aussie’s NAB Business Confidence for October, would be revealed. September came at -2.

On the Eurozone area, the schedule will feature German’s inflation rate, which is expected to edge up 0.4% MoM, exceeding September’s 0%. On a yearly basis, October’s inflation is expected to rise to 2%, from 1.6%.

EUR/AUD Price Forecast: Technical outlook

The EUR/AUD remains consolidates, as shown in the daily chart. However, it’s slightly tilted to the downside, as the exchange rate persists below the confluence of the 20, 50 and 100-day Simple Moving Averages (SMAs). This and the Relative Strengt Index (RSI) falling deeper, hints the cross could crack the 1.6200 in the short term.

In that event, the first support would be the 1.6100 psychological level, followed by major support at 1.6005, October 2 swing low. On the other hand, if buyers reclaim 1,6300, the next resistance area would be the confluence of daily SMAs at around 1.6327/1.6332.

• EUR/USD fell to a fresh 30-week low on Monday.
• US markets were thinned by a holiday, but the Greenback still rose.
• Fiber traders will get a breather before key data drops in the latter half of the week.

EUR/USD slid to a fresh 30-week low on Monday, kicking off the first trading session of the week with a 0.6% decline. Fiber extended losses below the 1.0700 handle as Euro bulls evaporate as markets await key US Consumer Price Index (CPI) inflation and a fresh update to pan-European Gross Domestic Product figures, both of which are slated to publish during the back half of the trading week.

The Euro has only a mid-tier smattering of economic data on the economic calendar for the early half of the week, leaving Fiber traders to chew on the US’ upcoming CPI inflation print due on Wednesday. October’s headline US CPI is expected to accelerate to 2.6% YoY from the previous period’s 2.4%, with core CPI for the same period forecast to hold steady at 3.3% YoY. Thursday will follow up with US Producer Price Index (PPI) business-level inflation, which is also expected to tick higher to 2.9% YoY in October from 2.8%.

On the European side, hopeful Euro bulls will be looking for a hold (at best) in EU-wide GDP growth numbers slated for early Thursday. Quarterly EU GDP growth in the third quarter is forecast to hold steady at 0.4% QoQ, while annualized EU GDP growth is expected to hold steady at an unremarkable 0.9% YoY.

EUR/USD price forecast

The EUR/USD daily chart displays a strong bearish momentum, with the pair extending losses after a recent breakdown below the 200-day EMA at 1.0895. The price is now well below both the 50-day EMA at 1.0960 and the 200-day EMA, confirming the bearish trend in the short to medium term. This downward move signals that sellers are firmly in control, with the pair nearing the next support level around 1.0650. A sustained close below this support level could further accelerate the downside momentum.

The MACD indicator, situated below the chart, supports the bearish sentiment, as the MACD line is diverging from the signal line in the negative territory. The histogram has turned more negative, suggesting an increase in bearish momentum. However, it is worth noting that the MACD line remains relatively close to the signal line, indicating that momentum could still shift if buyers step in at key support levels. A bullish crossover on the MACD would be the first sign of a potential trend reversal, but as of now, such a signal remains absent.

In the near term, a break below the immediate support at 1.0650 could lead to further declines, potentially targeting the psychological level of 1.0600. Conversely, if EUR/USD finds buying interest around the current levels, it may retest the 1.0750-1.0800 resistance zone. However, with both the 50-day and 200-day EMAs trending lower, the path of least resistance appears to be to the downside. Traders will likely watch for any bullish signals to confirm a reversal, but the overall technical picture currently favors the bears.

EUR/USD daily chart

• GBP/USD settled below 1.2900 on Monday as Sterling flows tighten up.
• UK wages and jobs figures are due during Tuesday’s London market session.
• Key US CPI inflation data looms ahead in the midweek hump.

GBP/USD skidded back into familiar lows on Monday, squirting back below the 1.2900 handle as Cable traders brace for the latest round of UK wages and jobs data due early Tuesday. The US market session was a quiet affair, with markets tilting firmly into risk appetite but still bolstering the US Dollar into the high side.

The London market session will kick off Tuesday with a fresh print in UK Average Earnings for September and UK Employment Change for the rolling three-month period ended in October. UK Average Earnings are expected to tick up to 3.9% for the annualized three-month period ended in September, up slightly from the previous period’s 3.8%. On net job additions, the UK is expected to shed around 50K jobs, down sharply from the previous period’s net increase of 373K. The UK’s Claimant Count Change is also expected to rise in October, forecast to increase to 30.5K MoM compared to the previous print of 27.9K.

The US markets were thin with many institutions dark for the Veteran’s Day holiday, however US investors are expected to return to the fold during the midweek market session with a fresh update to US Consumer Price Index (CPI) inflation figures. October’s headline CPI is expected to accelerate to 2.6% YoY from the previous period’s 2.4%, with core CPI for the same period forecast to hold steady at 3.3% YoY. Thursday will follow up with US Producer Price Index (PPI) business-level inflation, which is also expected to tick higher to 2.9% YoY in October from 2.8%.

GBP/USD price forecast

The GBP/USD daily chart shows the pair trading just above a critical support level, marked by the 200-day EMA at 1.2860. This key moving average has been providing support, and the current candle’s proximity to this level suggests potential downside risk if the pair closes below it. The 50-day EMA, which sits around 1.3025, has been trending downward, indicating a bearish medium-term outlook. The price's position below this 50-day EMA also signals that bears maintain control, and any recovery toward this level could encounter strong resistance.

The MACD indicator below the chart supports the bearish bias, with the MACD line crossing below the signal line, indicating downward momentum. The histogram has turned slightly negative, reflecting a growing bearish sentiment. However, the MACD remains near the zero line, which suggests that momentum is not strongly established in either direction. If the histogram increases in size on the negative side, it would strengthen the bearish case and could lead to a deeper pullback.

In the near term, a decisive break below the 200-day EMA could trigger further losses, potentially opening the door toward the next support zone around 1.2750. On the other hand, if GBP/USD manages to hold above this key level and regains momentum, a bounce towards the 1.3000 mark and the 50-day EMA is possible. Overall, the pair appears vulnerable to downside risks, with bears likely eyeing a daily close below 1.2860 to confirm a more substantial bearish trend.

GBP/USD daily chart

• NZD/USD declines on Monday, trades near 0.5960.
• Pair moved sideways while remaining significantly beneath 20-day SMA.
• The pair is exhibiting a mixed technical outlook, with the RSI indicating steady selling pressure and the MACD histogram showing declining buying pressure.

The NZD/USD pair traded neutrally on Monday, around 0.5960, and remains well below the 20-day Simple Moving Average (SMA). The pair's technical outlook is mixed, as the Relative Strength Index (RSI) indicates rising selling pressure while the Moving Average Convergence Divergence (MACD) histogram shows declining buying pressure. The overall momentum appears to be neutral, and the pair is likely to remain range-bound in the near term.

The technical indicators provide a mixed outlook for the NZD/USD pair. The RSI, a measure of momentum, is in negative territory and continues to decline, indicating that selling pressure is gradually increasing. The MACD histogram, which measures trend strength and direction, is also decreasing and green, suggesting that buying pressure is declining.

However, the pair trades within a narrow range with no clear direction, keeping the overall outlook neutral in the near term. The multiple rejections last week of the 20-day SMA paints the outlook with red, but the indicators and candles suggests that the pair is set to move sideways in the near term. 

NZD/USD daily chart

• Silver prices break below 50-day SMA at $31.41, testing support at 100-day SMA at $30.28.
• Bearish momentum confirmed by RSI; further decline could target 200-day SMA at $28.55.
• Reclaiming $31.00 could see silver challenge resistance at 50-day SMA and November highs.

Silver price drops over 1.80% on Monday trading late in the New York session, trading below the $31.00 a troy ounce, amid worries about Trump’s second term could escalate a trade war. At the time of writing, the XAG/USD trades at $30.69, after hitting a daily high of $31.55.

XAG/USD Price Forecast: Technical outlook

The uptrend in Silver prices is intact, yet after falling below the 50-day Simple Moving Average (SMA) at $31.41, sponsored XAG’s leg down to test the 100-day SMA at $30.28. Indicators such as the Relative Strength Index (RSI) turned bearish, and drops further, an indication that if sellers clear the latest key support area between $30.00-$30.28, they would be in charge.

In that outcome, the next support would be the 200-day SMA at $28.55, followed by the September 6 low of $27.69

Conversely, if buyers reclaim $31.00, look for a test of the 50-day SMA. Once cleared, the next supply zone would be the November 7 high at $32.15.

XAG/USD Price Chart – Daily

• NZD/JPY rose by 0.58% to 91.65 during Monday's session.
• NZD/JPY gained ground, but the cross remains stuck within a clear trading range between 92.00 and 91.00.
• The RSI indicates that buying pressure has been building, while the MACD suggests that selling pressure has been flat.

The NZD/JPY pair rose by 0.58% to 91.65, continuing the positive momentum seen during Monday's session. However, the pair remains stuck within a clear trading channel between 92.00 and 91.00. The overall momentum seems to be mixed, as the pair has been unable to break out of its trading range. A bearish crossover completed between the 20 and 100-day Simple Moving Averages (SMA) might push the pair lower, according to recent technical analysis.

The technical indicators provide mixed signals for NZD/JPY. The Relative Strength Index (RSI) is currently at 55, which suggests that buying pressure is rising. However, the Moving Average Convergence Divergence (MACD) is currently flat, which suggests that selling pressure is flat. The overall outlook is mixed, as the trend is unable to break out of its trading range.

Despite positive momentum, the pair has not broken out of its trading range. Traders should monitor the pair's reaction at its current trading channel to gauge potential breakout or reversal signals.

NZD/JPY daily chart

• US Dollar Index revisits four-plus-month high buoyed by Republican victory in US election.
• Australian employment report anticipates a rise of 25K workers in October, which might influence the RBA's monetary policy action in December.
• The US will release inflation data this week, which might also shake up the pair.

The AUD/USD declined by 0.24% to 0.6570 in Monday's session as the US Dollar Index (DXY) strengthened to a four-month high, bolstered by the Republican victory in the US election last week. The Australian labor market report, due this week, is expected to show job growth of 25K in October, influencing the Reserve Bank of Australia's (RBA) decision on monetary policy in December. The Australian Wage Price Index for Q3, also scheduled for release this week, could add upward pressure on inflation.

AUD/USD has declined due to strong US economic data, hawkish US Federal Reserve (Fed) bets, and a broader strengthening of the US Dollar. The RBA's hawkish stance has not been enough to support the Aussie but might eventually limit its downside.

Daily digest market movers: Declining Australian Dollar leads employment data release

• Australian employment report expected to show slower job growth and steady unemployment rate.
• Australia's Q3 wage price index is expected to shed light on labor market conditions and inflation pressures.
• In the meantime, the RBA is likely to maintain a hawkish stance, and markets anticipate a 25 bps rate cut in May 2025.
• Inflation data from the US this week as well as Retail Sales will give further insights on the US economy.

AUD/USD technical outlook:  Pair continues its downward momentum

Amidst bearish technical indicators, the AUD/USD pair's decline extends today, aligning with the negative outlook. The Relative Strength Index (RSI) remains below 50, indicating selling pressure, while the MACD histogram's decreasing red bars suggest a lack of momentum. This confluence of signals points to a potential further decline in the near term, with support levels at 0.6570, 0.6550 and 0.6530.

The 200 and 20-day Simple Moving Averages (SMAs) completed a bearish crossover and  suggests that the pair could experience further declines in the near future.

• Gold experiences worst week in five months; DXY climbs to 105.57 on Trump trade fears.
• Treasury market closure limits safe-haven flows; investors brace for Fed rate outlook in December.
• Fed officials’ remarks, key US inflation data and Retail Sales to further impact Gold’s path.

Gold plummets more than 2.50% on Monday as the Greenback hits a four-month high. Expectations that Donald Trump’s second presidential term could spark an escalation on the trade war front is keeping the US Dollar on the front foot. The XAU/USD trades at $2,611 after reaching a daily high of $2,686.

The non-yielding metal printed its worst week in over five months, following the results of the US presidential election. The US Dollar Index (DXY), which tracks the performance of the buck against six peers, climbed 0.60% to 105.57.

The US Treasury market remains closed in observance of Veteran’s Day. In the meantime, US equity markets fluctuated despite reaching record highs.

Overnight news revealed that Blackrock and JPMorgan warned the US bond sell off is “far from over,” according to Bloomberg reports. “Trump’s fiscal plans may rekindle inflation and increase the budget deficit, while traders have pared bets for how deeply the Federal Reserve will cut interest rates,” was read on the report.

For the upcoming December meeting, the Federal Reserve (Fed) is expected to lower rates by 25 basis points, even though odds moved back from 80% a week ago to 65% chances.

Over the weekend, Minneapolis Fed President Neel Kashkari said, “We want to have confidence that inflation is going to go all the way back down to our 2% target.” He added that if growth and productivity remain strong, the Fed may not cut as much.

Rumors of Robert Lighthizer becoming the leader of the US trade office — a known supporter of Donald Trump’s tariffs — sparked fears among investors. Consequently, the golden metal edged lower on speculation that Fed Chair Jerome Powell would adopt a cautious approach regarding policy by reducing interest rate cuts next year, which would benefit the US Dollar.

Ahead this week, the US economic docket will influence Gold’s path. Traders will eye comments from Fed officials, along with key data releases on consumer and producer inflation and Retail Sales.

Gold price slumps as data boosts the Greenback

• Gold prices fell as US real yields, which inversely correlate against Bullion, had recovered and climbed two basis points to 1.978%.
• Last Thursday, the Fed cut interest rates, recognizing a robust economy, a cooling labor market, and a gradual disinflation trend. However, officials noted that inflation is "still somewhat elevated" as it nears the 2% target.
• Fed Chair Jerome Powell withheld specific guidance on future policy, leaving options open for upcoming meetings. He highlighted that the Fed can proceed gradually in reducing rates, given the economy’s strength. Powell also acknowledged that monetary policy remains restrictive, even after the rate cut, as the Fed aims to reach a neutral stance.
• Data from the Chicago Board of Trade, via the December fed funds rate futures contract, shows investors estimate 24 bps of Fed easing by the end of 2024.

XAU/USD Technical Outlook: Gold price tumbles with sellers eyeing $2,600

Gold price collapses to around $2,610, threatening to clear the latest intermediate support at $2,603, the October 10 low, which if cleared could pave the way for further downside. In that outcome, the next support would be $2,600, followed by the 100-day Simple Moving Average (SMA) at $2,534.

On the other hand, if Gold clears $2,700, buyers will eye the 20-day SMA at $2,718, ahead of $2,750, followed by the October 23 high at $2,758.

Momentum has shifted bearishly as the Relative Strength Index (RSI) distanced itself from its neutral line, a sign that XAU/USD might extend its losses.

The Greenback rose to fresh tops on the back of the firm resurgence of the “Trump trade”, while investors warmed up for the release of US data and a slew of Fed speakers due later in the week.

Here is what you need to know on Tuesday, November 12:

The US Dollar Index (DXY) advanced to new four-month peaks around 105.70 boosted by investors’ reassessment of potential Trump policies and the impact on the Fed’s easing cycle. The NFIB Business Optimism Index is next on tap seconded by the RCM/TIPP Economic Optimism Index, and Consumer Inflation Expectations. Additionally, the Fed’s Waller, Barkin, Kashkari, and Harker will be speaking.

EUR/USD collapsed to the 1.0630 region following the strong performance of the Greenback on Monday. The final Inflation Rate in Germany along with the Economic Sentiment tracked by the ZEW Institute in both Germany and the Euroland will take centre stage on the domestic calendar. In addition, the ECB’s Cipollone is due to speak.

GBP/USD added to Friday’s retracement and flirted once again with recent lows in the mid-1.2800s. The release of the UK’s labour market report will be at the centre of the debate.

USD/JPY made a firm reversal, set aside two straight daily pullbacks and retargeted the 154.00 barrier amidst a stronger US Dollar. The October’s Machine Tool Orders will be the only date release in “The Land of the Rising Sun”.

Further gains in the Greenback prompted AUD/USD to add to Friday’s deep decline and revisit the 0.6560 zone. The Westpac Consumer Confidence Change and the NAB Business Confidence are due.

Prices of WTI sold off to fresh two-week lows in the proximity of the $68.00 mark per barrel on the back of further Dollar’s strength and omnipresent demand concerns from China.

Prices of Gold weakened to multi-week lows and came at shouting distance from the key support at $2,600 per ounce troy in response to the continuous buying pressure in the Greenback. Silver prices faced the same destiny, retreating to five-week lows around $30.40 per ounce.

• The Canadian Dollar went nowhere fast, straining against familiar lows.
• Canada is thinly-represented on the economic calendar this week.
• Key US CPI inflation data this week will dominate market flows.

The Canadian Dollar (CAD) is tepid to kick off a new trading week, circling familiar lows against the Greenback as the USD/CAD chart settles into a congestion pattern. A lack of meaningful momentum behind the Loonie has left the Canadian Dollar in the lurch, struggling to hold onto territory at the top end of a long-term consolidation pattern.

Canada is drastically under-represented on the economic calendar this week, with only low-tier data on the offering. Canadian markets are still shuttered for the Remembrance Day holiday, giving Canadian institutions a long weekend. CAD markets will return to the fold on Tuesday, with little of note on the data docket to make much fuss about.

Daily digest market movers: Holiday markets make for a quiet CAD

• Canada is taking Monday off for a long weekend as the nation observes Remembrance Day.
• Overall market sentiment is fairly bullish, but lackluster CAD is struggling to gain ground against the safe haven US Dollar.
• Loonie traders will have to wait until next week’s Canadian Consumer Price Index (CPI) inflation update for any hope of CAD-centric data drivers to push markets in either direction.
• US CPI inflation due this Wednesday will likely push additional volume into Greenback flows.
• Despite waffling inflation figures, an easing CPI print is unlikely to bolster the Loonie: lackluster economic figures in Canada amid deflating inflation figures has the Bank of Canada (BoC) scrambling to cut rates at an accelerated pace, but the lead-in time required for rate cuts to have an effect has left investors wondering if its too little, too late from the Canadian central bank.

Canadian Dollar price forecast

The Canadian Dollar (CAD) has found itself trapped in a sideways pattern against the US Dollar which has plagued the USD/CAD chart since late-2022. The CAD has weakened appreciably against the US Dollar, sending USD/CAD up the charts over 4% from September’s lows near 1.3400. USD/CAD is knocking into 1.3960, a familiar ceiling for price action since the pair rose into the region in October of 2022.

A familiar congestion pattern could see technical traders stepping in to short the Greenback against the Loonie, but investors hoping to step into CAD bidding will need some sign of strength from either the BoC, the Canadian economy, or the Loonie itself, or ideally, all three.

USD/CAD daily chart

• US Dollar gains on Monday with the DXY above 105.50.
• The fundamental Greenback uptrend remains intact as the US economy continues to outperform other advanced economies.
• Key data releases this week include the US October CPI on Wednesday and Retail sales on Friday.

The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, is broadly gaining in Monday's session. The focus for traders is now on the US inflation data for October, which will be released later this week. A strong inflation reading could further boost the US Dollar as it would increase expectations that the Federal Reserve (Fed) might slow the pace of interest rate easing.

The DXY initially rose last Friday after positive UoM consumer confidence data and the Federal Open Market Committee’s (FOMC) announcement of a 25 bps rate cut. Despite concerns over easing labor market conditions, the Fed expressed optimism about economic growth. 

Daily digest market movers: US Dollar continues rising toward multi-month highs

• The fundamental US Dollar uptrend remains intact despite Trump's victory stalling the currency.
• The US economy is outperforming other advanced economies and is in a "sweet spot."
• The prospect of looser fiscal policy under Trump and limited Fed easing room point to a stronger Greenback.
• The US October CPI on Wednesday and Retail Sales on Friday, are this week's data highlights.
• There are also plenty of Fed speakers throughout the week including Chair Powell on Thursday.
• Growth remains solid in Q4 with the Atlanta Fed GDPNow model's estimate for Q4 GDP standing at 2.5% SAAR.
• The New York Fed’s Nowcast model is tracking Q4 growth at 2.1% SAAR.

DXY technical outlook:  Bulls gather momentum but approach overbought conditions

The DXY index advanced above the key resistance at 105.50 on Monday, reaching levels last seen in July. This bullish move has been supported by technical indicators that remain in positive territory. 

However, the indicators are approaching overbought levels, suggesting that the index may be due for a correction in the near term. Traders should monitor the index closely to see if it can maintain its momentum or if it will pull back in the coming days.

• The Dow Jones is set to close north of 44,000 for the first time ever as bulls continue to run.
• Equity markets have tilted fully into the buy side after Trump’s decisive election win.
• US CPI inflation print due in the mid-0week as markets eye more Fed rate cuts.

The Dow Jones Industrial Average (DJIA) lurched another 300-plus points higher on Monday, with equities on the climb in an extension of the bull run kicked off after last week’s Trump win at the election polls. Markets are deceptively thin on Monday with most of the US shuttered during the Veteran’s Day holiday. Still, bidders continue to push the Dow Jones into record territory regardless.

Last week saw presidential candidate Donald Trump sweep to a surprise win in the latest US presidential election and another rate trim from the Federal Reserve (Fed). Investors see everything coming up aces, with US jobs data continuing to beat expectations and pulverize previous fears of an economic hard landing scenario.

Later this week brings a fresh update to US Consumer Price Index (CPI) inflation figures. October’s headline CPI is expected to accelerate to 2.6% YoY from the previous period’s 2.4%, with core CPI for the same period forecast to hold steady at 3.3% YoY. Thursday will follow up with US Producer Price Index (PPI) business-level inflation, which is also expected to tick higher to 2.9% YoY in October from 2.8%.

Fed Chair Jerome Powell will also make an appearance on Thursday, where the head of the Fed will participate in a panel discussion hosted by the Fed Bank of Dallas. Audience questions are expected to run the gamut of trying to nail down a hint about the Fed’s plans for another rate cut in December. Investors should also expect a familiar slew of questions about Chair Powell’s intent to ‘step down’ as head of the Fed if incoming president-elect Donald Trump asks for it, something the President’s office has no power or authority to request.

Dow Jones news

Don’t tell the Dow Jones Monday is a holiday; two-thirds of the index’s listed securities are pushing into the green to kick off the new trading week. Salesforce (CRM) surged over 5.5% to $340 per share as the AI bid continues to trickle into companies in the utility tech space, despite a clear path forward on when or even how large-scale data models will generate excess revenue. Honeywell International also rose 2% to $224 per share, tapping into a fresh-two year high.

Dow Jones price forecast

The Dow Jones is firmly back on its bullish ways, tearing into new record high bids and poised for a close north of 44,000 on Monday. The major equity index is now up nearly 20% bottom-to-top in 2024, and has risen an eye-watering 47% since the last time price action touched the 200-day Exponential Moving Average (EMA) near 30,000 in October of 2022.

Traders interested in trying to mount a short position have their work cut out for them; the Dow is on pace to close in record territory for a fifth straight month, leaving a complete lack of technical entry points on the table. Traders carrying long interest might look to pare some bets when the Dow Jones taps 45,000 for the first time, as large round figures tend to create some congestion.

Dow Jones daily chart

• Mexican Peso plunges over 1.51% as Dollar Index hits four-month high, fueled by Trump policy expectations.
• Banxico likely to cut rates by 25 bps, with core inflation nearing target, adding pressure on Peso.
• Mexico’s Consumer Confidence improves, while Banxico decision and US inflation data to shape USD/MXN trend.

The Mexican Peso depreciates at the beginning of the week against the US Dollar as the latter refreshes four-month highs, according to the US Dollar Index (DXY). Investor angst concerning a second Trump presidency and protectionists policies underpins the American currency, which is set to rise further. The USD/MXN trades at 20.46, gaining over 1.51%.

Risk appetite remains strong with Wall Street posting solid gains, which usually underpins risk-sensitive currencies like the Peso. Nevertheless, rumors of Robert Lighthizer’s appointment to lead US trade policy sparked fears among investors. Lighthizer was a major supporter of Trump’s Chinese tariffs during his first term.

Consequently, the DXY, which tracks the performance of the American currency against another six, has risen by 0.54% to 105.51.

In the meantime, Mexico’s economic docket revealed that Consumer Confidence in October improved. At the same time, Industrial Production figures were mixed ahead of the Bank of Mexico (Banxico) monetary policy decision.

Banxico is projected to lower borrowing costs by 25 basis points following last week’s inflation data, which witnessed core inflation dipping from 3.91% to 3.80% YoY, closing in on the 3% goal.

Earlier, Mexican President Claudia Sheinbaum said that she would renew an agreement with food producers and retailers to keep prices of basic groceries affordable for consumers, according to Reuters.

Ahead this week, Mexico’s schedule will feature the Banxico policy decision. On the US front, Fed speakers, inflation on the consumer and producer sides and Retail Sales will dictate the US Dollar’s path moving forward.

Daily digest market movers: Mexican Peso collapses amid risk-on sentiment

• October’s Consumer Confidence in Mexico improved from 47.4 to 49.4.
• Industrial Production for September increased by 0.6% MoM vs. -0.5% contraction in August. In the 12 months to September, it shrank by -0.4%, the same as the previous month.
• On November 7, Mexico’s Economy Secretary, Marcelo Ebrard, commented that most of Mexico’s imports from China are made by around 50 companies and most of them are American. “Putting a tariff on those imports will only put those companies in danger, starting with the automotive industry,” Ebrard said.
• Minneapolis Fed President Neel Kashkari said, “We want to have confidence that inflation is going to go all the way back down to our 2% target.” He added that if growth and productivity remain strong, the Fed may not cut as much.
• Data from the Chicago Board of Trade, via the December fed funds rate futures contract, shows investors estimate 24 bps of Fed easing by the end of 2024.

USD/MXN technical outlook: Mexican Peso tumbles again as USD/MXN rises above 20.00

The USD/MXN uptrend remains in place, though buyers might encounter some stir resistance ahead. Despite hitting a daily peak of 20.57, bulls failed to challenge the year-to-date (YTD) high at 20.80. Once cleared, the next stop would be 20.82, followed by the 21.00 mark, ahead of March 8, 2022, peak at 21.46.

Conversely, sellers must regain the 20.00 figure, if they would like to challenge the 50-day Simple Moving Average (SMA) at 19.70. On additional weakness, the USD/MXN next support would be the psychological figure at 19.50, followed by the October 14 low of 19.23.

• EUR/GBP declined 0.27% on Monday to near 0.8270, its lowest since March 2022.
• The EUR/GBP pair remains in a strong downtrend, extending its losses over the past five trading days.
• The RSI indicator is showing that selling pressure is rising, while the MACD indicator also indicates a bearish momentum.

The EUR/GBP pair fell on Monday, extending its losses and approaching multi-year lows. The decline continues a five-day downward trend, with the pair reaching 0.8270 on Monday after a 0.27% drop. Technical indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) point to bearish conditions, with selling pressure rising and overall momentum biased to the downside.

In the technical analysis, the RSI is at 38 and trending down, indicating rising selling pressure. The MACD histogram is below zero and red, further emphasizing the bearish momentum. Within the price action sphere, EUR/GBP has support levels at 0.8250, 0.8230, and 0.8210, and resistance levels at 0.8330, 0.8370, and 0.8390. These levels can provide guidance for potential trading opportunities.

The EUR/GBP pair continues to trade under bearish pressure, extending its downtrend and reaching multi-year lows since March 2022. Technical indicators, such as the RSI and MACD, indicate that selling pressure is escalating, while the extended losing streak and recent decline suggest that the trend is likely to persist.

EUR/GBP daily chart

MidEast risk appears substantially underpriced. Traders have concluded that this chapter in the Middle Eastern conflict has concluded, resulting in a sharp erosion of the supply risk premia baked into energy markets, TDS’ Senior Commodity Strategist Daniel Ghali notes.

Middle Eastern conflict has settles into an unstable equilibrium

“Interestingly, OPEC's decision to delay their return of unwanted barrels by yet another month provided only a temporary boost to the supply risk baked into crude oil prices, but our decomposition of energy market returns suggest that another delay just won't cut it.”

“In this context, without a resurgence in geopolitical risk tied to oil supplies, the set-up would favor continued downside in prices. Yet, the Middle Eastern conflict has settled into an incredibly unstable equilibrium, and President-elect Trump threatens to tighten sanctions enforcement on Iran akin to the 'maximum pressure' regime that upended oil flows during his last term.”

“In our view, the right tail has fattened once again.”

• GBP/USD tilts downward; key support at 1.2833 could open path to 200-day SMA at 1.2816.
• Break below major support may shift bias bearish, targeting August low of 1.2664.
• Buyers need a close above 100-day SMA at 1.2992 to regain momentum toward 1.3099.

The Pound Sterling begins the week on the back foot, tumbling over 0.30% against the Greenback amid fears that US President-Elect Donald Trump might impose tariffs, deteriorated risk appetite. Hence, the risk-sensitive GBP/USD pair fell below the 1.2900 figure, trading at 1.2876.

GBP/USD Price Forecast: Technical outlook

From a technical perspective, the GBP/USD remains consolidated but slightly tilted to the downside. However, sellers must clear the November 6 swing low of 1.2833 to challenge the 200-day Simple Moving Average (SMA) at 1.2816. If those two support levels are cleared, the bias will shift bearish, and the pair can challenge major support at the August 9 daily low of 1.2664.

Conversely, GBP buyers need to lift the major above the 100-day SMA at 1.2992, shy of 1.30. Once surpassed, that could pave the way to testing the 50-day SMA at 1.3099.

Momentum remains bearishly biased as seen by the Relative Strength Index (RSI). Still it consolidated at around familiar levels, hinting that sellers are not fully in charge.

GBP/USD Price Chart – Daily

• USD/CAD aims above 1.3950 with the US Dollar strengthening on Trump’s victory.
• Investors await the US CPI data for October and the commentary from a slew of Fed speakers.
• The BoC is expected to cut interest rates again by 50 bps in December.

The USD/CAD pair gathers strength to break above the immediate resistance of 1.3950 in Monday’s North American session. The Loonie asset sees more upside as the US Dollar (USD) surges to a fresh four-month high, with the US Dollar Index (DXY) rising to 105.60.

The reasoning behind Greenback’s rally is the Republican Donald Trump’s victory in the United States (US) presidential elections. US fiscal deficit and inflationary pressures are expended to escalate given that Trump vowed to raise import tariffs and lower corporate taxes in election campaigns. The scenario could force the Federal Reserve (Fed) to maintain a hawkish guidance on interest rates.

This week, investors will pay close attention to the US Consumer Price Index (CPI) for October, which will be released on Wednesday and speeches from an array of Fed speakers for fresh interest rate guidance. Year-on-year headline inflation is estimated to have accelerated to 2.6% from 2.4% in September, with core CPI – which excludes volatile food and energy prices – rising steadily by 3.3%.

The impact of the inflation is expected to be weak on the Fed monetary policy action in December, unless there is a significant deviation with the consensus, as policymakers are confident about inflation remaining on track to bank’s target of 2%.

In the Canadian region, rising expectations of more interest rate cuts by the Bank of Canada (BoC) has weighed on the Canadian Dollar (CAD). BoC rate cut prospects have strengthened as Friday’s labor market data showed weak labor demand. The Canadian employment report showed that the economy added 14.5K workers, lower than estimates of 25K and from 46.7K in September. The Unemployment Rate remained steady at 6.5%, which was expected to accelerate to 6.6%.

The BoC reduced its key borrowing rates by 50 basis points (bps) by 3.75% in October and is expected to deliver a similar move in the December meeting.

• USD/CHF keeps rising on US Dollar strength
• It is close to meeting resistance from the 200-day SMA.

USD/CHF extends its short and medium-term uptrend and rises up to within spitting distance of the 200-day Simple Moving Average (SMA). 

USD/CHF Daily Chart 

It will probably encounter tough resistance at the 200 SMA which could pullback as a result. 

Given the technical analysis theory that “the trend is your friend”, however, it is likely to eventually resume its uptrend. 

A decisive break above the 200 SMA at 0.8818 would probably result in a continuation up to the next target at 0.8873 (July 30 swing high).  

The Relative Strength Index (RSI) momentum indicator is not yet overbought suggesting the pair has more upside potential before it gets overextended. 

Despite market optimism that change could be afoot, it is uncertain if German politicians will satisfy the market’s desire for increase fiscal spending on areas such as energy, defence and Ukraine, Rabobank’s Senior FX Strategist Jane Foley notes.

EUR to move towards 1.05 on a 3-month view

“The timing of this uncertainty is very much in focus in view of the US President-elect’s position on Nato and Ukraine. Despite the US’s large budget deficit, the topic of fiscal prudence was not on the agenda during the US presidential election campaign.”

“Trump stance on fiscal policy and tariffs is suggestive of higher inflationary pressures in the US which, in Rabo’s view, is likely to cut short the Fed’s easing cycle. If German politicians continue to struggle to boost growth in Europe’s largest economy, the market is more likely to assume that the baton will be passed to the ECB.”

“The ECB has indicated that it is more confident that inflation is falling sustainably back towards the 2% target and is already widely expected to cut rates next month, for the third consecutive meeting.  Interest rate differentials suggest further downside pressure for EUR/USD. We see the currency pair moving to 1.05 on a 3-month view.”

• Silver price slumps below $31.00, weighed down by US Dollar’s rally.
• Trump’s victory has improved the US Dollar’s long-term outlook.
• Silver price sees more downside towards $29.00.

Silver price (XAG/USD) slides below the key support of $31.00 in Monday’s North American session. The white metal weakens as the US Dollar (USD) rallies on optimism over Republican Donald Trump’s victory in the United States (US) presidential elections.

Trump vowed to raise import tariffs by 10% universally and lower corporate taxes in his election campaign, a scenario that would boost fiscal deficit and inflationary pressures. This would force the Federal Reserve (Fed) to turn hawkish on interest rates. The impact will be favorable for the US Dollar (USD) and bond yields. Usually, higher yields on interest-bearing assets increase the opportunity cost of holding an investment in non-yielding assets, such as Silver.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, surges above 105.60. 10-year US Treasury yields soar to 4.37%. This week, investors will be focused on speeches from a slew of Fed officials for fresh interest rate guidance. According to the CME FedWatch tool, the Fed is expected to cut interest rates by 25 basis points (bps) again to 4.25%-4.50% in the December meeting.

Meanwhile, an absence of China’s stimulus package allocation has also weighed on the Silver. Silver, as a metal, has applications in various industries such as power, Electric Vehicles, and mining, etc, and a smaller-than-expected stimulus boost has weakened Silver’s appeal.

On Friday, the National People's Congress (NPC) unveiled a 10 trillion yuan debt package to stabilize economic growth.

"It may be disappointing for those who were expecting the NPC meeting to approve a massive fiscal package, but the expectation is unrealistic because the policy goal is to achieve the GDP growth target and reduce tail risks, not to reflate the economy in any meaningful way," analysts at Macquarie said.

Silver technical analysis

Silver price declines toward the upward-sloping trendline around $29.00, plotted from the February 28 low of $22.30. The white metal weakened after breaking below the horizontal support plotted from May 21 high of $32.50.

The near-term trend of the Silver price has weakened as it establishes below the 50-day Exponential Moving Average (EMA), which trades around $31.60.

The 14-day Relative Strength Index (RSI) slides to near 40.00. A bearish momentum will trigger if the RSI (14) drops below the same.

Silver daily chart

• EUR/CAD has broken below the base of a multi-month price pattern. 
• It is likely to go lower if the break is decisive and it can pierce below the 200-day SMA. 

EUR/CAD has broken out of the rectangular price pattern it has been forming since August.

EUR/CAD Daily Chart 

A bearish close on Monday (today) would confirm a decisive breakout from the pattern. The usual method for determining the follow-through after a breakout would be to take the height of the range and extrapolate it lower by 61.8% – or in the case of an optimistic forecast 100%. 

In the case of EUR/CAD this gives a minimum  downside target of 1.4684. A break clearly below the green 200-day Simple Moving Average (SMA) would provide confirmation. The SMA lies at 1.4839, however, a break below 1.4820 would confirm a clear break and probably confirm a continuation lower to the aforementioned conservative target. 

The 100% target for the pattern lies at 1.4555.

The goal of a restrictive US trade policy is to reduce the US current account deficit. That seems to me to be the sense of the tariff threats in economist terms. The incoming administration seems to want to do everything to make US companies more profitable: low corporate taxation, the lifting of environmental and consumer protection rules, etc. can probably be subsumed under this heading. In addition, US fiscal policy is likely to become much more expansionary, Commerzbank’s Head of FX Research Ulrich Leuchtmann notes.  

A more expansionary US fiscal policy is on its way

“The capital account and the current account are two sides of the balance of payments. The two balances are always equal in size. That equality is not based on abstract economic theory and does not hold ‘in equilibrium’, but it holds for simple accounting reasons. Every second and to the cent. The reported statistics do not reflect this truism, but only because official statistics cannot capture all transactions.”

“The combination of a business-friendly US economic policy, an expansive US fiscal policy and a restrictive Fed monetary policy leads to USD strength and thus (because (1.) in such a situation capital flows increasingly into the USA and (2.) the strong dollar worsens the price competitiveness of the US economy) to higher deficits in the US current account.”

“Sooner or later, the various aspects of Trumponomics could lead to contradictions. That's when it comes down to the crunch. What is more important to the administration? Reducing the current account deficit? Or government spending and business-friendly economic policy? If the Fed doesn't give in and allow inflation, I can well imagine the Trump administration intervening in the FX market and the US Treasury accumulating foreign exchange reserves to weaken the USD.”

• EUR/GBP breaks below support from the floor of a six-week range. 
• The pair resumes its long-term bear trend. 

EUR/GBP has broken decisively below the base of a six-week range (red dashed line on chart) and is in free fall. 

EUR/GBP Daily Chart 

 

The pair is likely to fall substantially lower as the bearish trend resumes. The usual technical method of determining how far, is to take the height of the prior range and extrapolate it lower. A conservative estimate lies at the Fibonacci 61.8% extrapolation, at 0.8225. 

A more optimistic forecast at the 100% extension, at 0.8171. 

• Gold weakens as a result of a stronger US Dollar on Monday. 
• President-elect Donald Trump’s Dollar positive policies and competition from Bitcoin are factors pressuring Gold. 
• Rumors Trump has offered known protectionist Robert Lighthizer the job of chief of trade is also weighing. 

Gold (XAU/USD) in fall continues to fall, trading in the $2,660s – nearly $25 down from last week’s close. A stronger US Dollar (USD) is mainly to blame, with the trade-weighted US Dollar Index (DXY) up almost half a percent so far on the day. Perceptions that President-elect Donald Trump’s economic policies will be positive for the Greenback are the main driver. Since Gold is mainly priced and traded in USD, a stronger Dollar causes its price to fall.

Trump’s love of what he described as “the most beautiful word in the dictionary” (tariff) is expected to increase the prices of goods and inflation. Whilst this alone is not US Dollar positive, it will make the US Federal Reserve (Fed) slow down the rate at which it cuts interest rates. Relatively elevated interest rates attract greater foreign capital inflows, which is, in turn, positive for USD. Trump’s penchant for lower taxes is also likely to stoke inflation further, compounding the effect. 

Gold rattled by Lighthizer rumor

Gold may be further pressured by rumors that Trump has offered the job of US Trade Representative to Washington attorney Robert Lighthizer, a known protectionist hawk.  Lighthizer held the same role during Trump’s 2016 - 2020 administration and is known for advocating a tough protectionist stance – especially regarding China. The story of his appointment first broke in the Financial Times (FT) on Friday, and although it was later contradicted by a Reuters’ article claiming one of their sources had said it was “untrue”, rumors persist. 

With a Republican in the White House, a majority in the US Senate, and the Republicans edging closer to winning a majority in the US Congress, the ability of Trump to push through his radical economic agenda and tax cuts seems assured. The Republican party has so far won 214 seats in Congress to the Democratic party’s 203, with only 18 outstanding, according to the Associated Press. The threshold for a majority is 218.

Competition from alternative assets such as Bitcoin (BTC) is also likely bearish for Gold. BTC hit a new all-time high on Monday, above $82,000, due to expectations that Trump will relax crypto regulation. Stocks could also seem attractive initially if Trump brings down corporation tax and loosens regulation. Gold is likely to suffer as a consequence of portfolio managers pivoting into these riskier assets. 

The perception that Trump will be able to bring an end to the Ukraine-Russia war, which he boasted he could settle “in one day – 24 hours,” may also be reducing safe-haven flows into Gold. 

Technical Analysis: XAU/USD resumes short-term bear trend

Gold starts falling again after temporarily recovering during its November sell-off. The precious metal is in a short-term downtrend, which, given it is a principle of technical analysis that “the trend is your friend,” is likely to extend. 

XAU/USD 4-hour Chart

A break below the $2,643 November 7 low would confirm a continuation lower, probably to the next target at the trendline for the long-term uptrend at $2,605.

Gold price is not oversold according to the Relative Strength Index (RSI), so more downside is possible.

The 50-day Simple Moving Average (SMA) at $2,646 could provide additional support and prove a tough nut to break.

The precious metal remains in an uptrend on a medium and long-term basis, with a material risk of a reversal higher in line with these broader up cycles at some point in time.

During the election campaign, Donald Trump and his supporters announced high tariffs: 60% on imports from China, 10%, 20% or more on all other imports. There is now widespread discussion about whether this will actually happen or whether it was just electioneering bluster. The threat of higher tariffs may also serve as leverage to persuade trading partners to make concessions, Commerzbank’s Head of FX Research Ulrich Leuchtmann notes.  

Trump administration to force partners to end subsidies

“Materially relevant concessions will most likely be unavoidable. What might these be? Let's take a look at the arsenal of trade policy. Above all, we find: concessions by the US trade partners to end subsidies on the production of tradable goods, and quotas (i.e. upper quantity limits) for exports to the USA.”

“If, for example, an aircraft manufacturer in Europe receives government subsidies that enable it to offer its aircraft at a lower price than a US aircraft manufacturer, US airlines can purchase aircraft at a favorable price. If the subsidies are discontinued, the US airlines will have to pay more for the acquisition of their aircraft, will have to raise ticket prices as a result, and thus contribute a little to higher US inflation.”

“In market economies, the government has to issue licenses that are acquired by companies planning to send goods to the US. I think it is clear that this is quite similar to a tariff. The only difference is that the revenues go to the government of the exporting country, not to the US government. Otherwise, the effect is the same as with US import tariffs.”

• The US Dollar trades in the green across the board on Monday.
• The focus will be on the US inflation data for October later this week. 
• The US Dollar index pops above 105.00 and is ready to test resistance levels. 

The US Dollar (USD) starts the week on the front foot and strengthens on Monday,  with the US Dollar Index (DXY) edging higher above the 105.00 level. The positive undertone for the Greenback is supported by the increasing likelihood that the Republican Party will win a majority in the US Congress after President-elect Donald Trump has already won the presidency and the Republicans secured a majority in the US Senate. The vote count for the House of Representatives is still ongoing, with only four more seats needed for the Republicans to win it. 

The US economic calendar is empty on Monday in observance of Veteran's Day. Stock markets in the US will remain open, but bond markets will be closed. 

Later in the week, investors will pay close attention to speeches from several Federal Reserve (Fed) officials, including Fed Chair Jerome Powell, and the US Consumer Price Index (CPI) data for October, which will be published on Wednesday.

Daily digest market movers: Off to a positive start

• Due to the Veterans’ Day bank holiday, expect low volatility and volumes as US bond markets remain closed on Monday. 
• All equities are off to a good start this week. European equities are surging over 1%, while US equity futures are in positive territory ahead of the opening bell. 
• The CME FedWatch Tool is pricing in another 25 basis points (bps) rate cut by the Fed at the December 18 meeting by 68.5%. A smaller 31.5% chance is for rates to remain unchanged. 
• The US 10-year benchmark rate trades at 4.30%, and the bond market remains closed on Monday.

US Dollar Index Technical Analysis: Here comes resistance again

The US Dollar Index (DXY) pushes higher on Monday after headlines over the weekend that President-elect Trump has won the last remaining swing state in the US election and has secured a substantial landslide victory. Should the House of Representatives, where counting is still ongoing, fall in the hands of the Republicans, expect another push higher in the DXY once the headline breaks and is confirmed by several media outlets. 

The first level to watch out for on the upside is 105.53 (April 11 high), a very firm cap resistance, with 105.89 (May 2 high) just above. Once that level is broken, 106.52, the high of April and a double top, will be the last level standing before starting to talk about 107.00.

On the downside, the round level of 104.00 and the 200-day Simple Moving Average (SMA) at 103.86 should refrain from sending the DXY any lower. 

US Dollar Index: Daily Chart

The Turkish lira (TRY) exchange rate has been relatively stable in recent weeks, even versus the strong US Dollar (USD). But, it may be beginning to drift weaker over the past couple of days. One reason is the combination of a downgrade to the inflation outlook by the central bank (CBT) and fresh remarks from President Tayyip Erdogan during a trip abroad that he thinks that interest rates and inflation can fall together in Turkey, Commerzbank’s FX analyst Tatha Ghose notes.  

Erdogan’s remarks are prone to be especially misinterpreted

“For CBT to have to raise, not only the 2024, but also the 2025 inflation forecast further this late in the monetary policy cycle is not at all ideal. True, only the end-2024 forecast appears high in absolute terms at 44% while the end-2025 forecast appears more reasonable at 21%. But, who is going to have any confidence in the latter number when inflation forecasts are still being serially revised up every quarter?”

“Fresh month-on-month increase in prices is still running at a relatively 40% annualised pace. This month-on-month rate would have to converge to target much before we can expect to see the year-on-year rate converging. It is implicit within CBT’s latest inflation report that this is taking longer than previously thought. That is bad news, and once again brings us back to the crucial issue of President Erdogan’s remaining patience with high interest rates.”

“To be fair, we do not get the sense that Erdogan was demanding low interest rates like he has done before, but rather was backing Simsek to be the right person to achieve good economic results. Still, his remarks are prone to be especially misinterpreted by the media and by the FX market because he has long history in this regard. It is unhelpful for him to elaborate details of the relationship between inflation and interest rate, citing examples of countries or situations when both can be low.”

Japanese parliament will vote in a special session this afternoon to decide on who will take premiership. Prime ministerial vote can take up to two rounds, where in the first round, lawmakers of different political party typically vote for their respective leaders making it unlikely for any candidate to secure a clear majority. Pair was last at 153.73 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Daily momentum is mild bearish

“In this case, top two candidates will go into a run-off (in the second round) that only requires a simple majority to win. There is some uncertainty if PM Ishiba will win enough votes to lead a new government as the new PM. LDP and Komeito need support from some in the opposition to pass major legislation, including an extra budget to fund an economic stimulus package.”

“Assuming no major upset. i.e. Ishiba may still win and a minority government may suffice with opposition DPP and JIP as partners on confidence and supply agreement. Point to note is that these opposition partners had earlier critique BoJ for raising rates.”

“USD/JPY inched higher this morning. Daily momentum is mild bearish while RSI rose. Consolidation likely. Resistance here at 154.80 (recent high) and 156.50 (76.4% fibo). Support at 151.70 levels (21, 200 DMAs), 150.70 (50% fibo).”

• Crude Oil further declines, breaking below the psychological $70.00 level. 
• Traders still see concerns over Chinese demand and OPEC’s impasse as key issues leading to oversupply. 
• The US Dollar Index jumps after President-elect Donald Trump enlarged his victory. 

Crude Oil slides by more than 1% on Monday, piling on Friday’s losses and within touching distance of a seven-day low, ahead of the publication of the monthly OPEC report on Tuesday. Traders are already writing off the report as a non-event after OPEC already sidetracked on its production normalization last week by extending the measure by a month. Far from enough, traders also worry about Chinese demand for Oil once President-elect Donald Trump imposes tariffs on the country’s products. 

The US Dollar Index (DXY), which tracks the performance of the Greenback against six other currencies, extends gains on Monday after headlines over the weekend that President-elect Donald Trump secured an additional swing state to its victory. All eyes are now on the count for the House of Representatives, where the Republicans are just four seats shy of the majority after already securing the Senate. Meanwhile, traders gear up for the US Consumer Price Index (CPI) on Wednesday.  

At the time of writing, Crude Oil (WTI) trades at $69.00 and Brent Crude at $72.60.

Oil news and market movers: OPEC report to be a blank

• The monthly OPEC report is due Tuesday near 12:00 GMT. 
• Several markets and asset classes are closed or trading at low volumes for this Monday on Veteran’s Day.
• Saudi Aramco reportedly will only sell around 36 million barrels of contractual supplies for December, against 42 million barrels in November, Reuters reports. 
• Russian officials and business executives have held talks about merging the country’s biggest Oil companies into a single producer, the Wall Street Journal reported.

Oil Technical Analysis: Bearish again 

Crude Oil prices are snapping lower again in search of a fresh one-week low. Traders’ expectations for any answers from OPEC on the oversupply issue look very minimal. The risk is that any form of communication from OPEC triggers more downside in Oil prices. 

On the upside, The 55-day Simple Moving Average (SMA) at $70.66  is the first to be considered  before the hefty technical level at $73.98, with the 100-day Simple Moving Average (SMA) and a few pivotal lines. The 200-day SMA at $76.77 is still quite far off, although it could get tested in case tensions in the Middle East arise. 

Traders need to look much lower, towards $67.12, a level that held the price in May and June 2023, to find the first support. In case that level breaks, the 2024 year-to-date low emerges at $64.75, followed by $64.38, the low from 2023.

US WTI Crude Oil: Daily Chart

From central bank policy last week, we switch to inflation and GDP data in the Central and Eastern Europe (CEE) region this week. Today, we start with Czech October inflation, where our economists expect a further rise from 2.6% to 2.9% year-on-year, slightly above market and Czech National Bank expectations. And core inflation should also be higher from 2.3% to 2.6%. Tomorrow will also see the release of inflation in Romania, where we expect a decline from 4.6% to 4.4% YoY and in Hungary from 3.0% to 3.6%, both in line with the market, ING’s FX analyst Frantisek Taborsky notes.  

Market is more focused on the regional angle

“Current account numbers for September in Poland, Czech Republic and Romania will be published on Wednesday. On Thursday, we will see third quarter GDP numbers in Poland and Romania. Poland should see the YoY pace slow from 3.2% to 2.5%, while Romania sees an acceleration from 0.9% to 1.7% YoY. On Friday, we'll see final inflation numbers in Poland confirming a rise to 5.0% in October and the CNB will release minutes from last week's meeting, which could tell us more about the likelihood of a pause in December.”

“As FX finds its place in the new post-election environment, we retain a bearish bias for the CEE region. We view Thursday's market correction and rally as a post-election positioning adjustment but believe CEE cannot escape the negative global outlook. Lower EUR/USD will be the main driver of weakness for CEE FX, but we should also see more negative news from the economy.”

“Rates are still too high across the board despite the rally in recent days and the market has room to price in more rate cuts due to weaker data and a possible dovish ECB move. CEE shorts in USD-crosses seem to be the main direction in the region for now, while EUR-crosses are finding their way. Still, PLN should have some chance to outperform in the region in the medium term due to economic differences and the stage in the cutting cycle. But for now, we believe the market is more focused on the regional angle.”

• AUD/USD trades sideways below 0.6600 with a focus on US/Aussie data.
• Trump’s victory keeps the US Dollar on the frontfoot.
• The Australian jobless rate is expected to remain steady at 4.1%.

The AUD/USD pair trades in a tight range slightly below the key resistance of 0.6600 in Monday’s European session. The Aussie pair consolidates as investors await the United States (US) Consumer Price Index (CPI) and the Australian Employment data for October, which will be released on Wednesday and Thursday.

Market sentiment appears to be asset-specific as risk-perceived currencies are facing pressure, while US equities gain sharply. S&P 500 futures have posted significant gains in the European session. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, revisits a more than four-month high of 105.45.

Economists expect the annual headline inflation data to have accelerated to 2.6% from 2.4% in October, with core CPI rising steadily by 3.3%.

The Greenback remains broadly firm on Republican Donald Trump’s victory in the US presidential elections who is expected to raise import tariffs universally by 10%, a scenario that will boost inflationary pressures and fiscal deficit, which will force the Federal Reserve (Fed) to return to hawkish interest rate stance.

Meanwhile, the Australian employment report is expected to show that the economy added 25K workers in October, lower than 64.1K in September. The Unemployment Rate is expected to remain steady at 4.1%. The employment data will influence market expectations for the Reserve Bank of Australia (RBA) monetary policy action in the December meeting. Last week, the RBA left its key Official Cash Rate (OCR) unchanged at 4.35% but maintained a hawkish guidance on interest rates.

The Pound Sterling (GBP) traded a touch softer last week, despite larger magnitude of decline seen in other FX including EUR, CHF. GBP was last at 1.2888 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

BoE keeps well GBP supported

“Hawkish BoE was one factor that kept GBP supported. Governor Bailey stressed on the need to make sure inflation stays close to target. Also, labour government’s budget may add to inflation, alongside Trump’s tariff plans. These reinforced our view that the BoE may have to stick with its gradual approach on lowering rates.

Daily momentum is flat while RSI shows little signal. Consolidation likely. Support here at 1.2870 (50% fibo) and 1.2820 (200 DMA). Resistance at 1.2990/1.30 (38.2% fibo retracement of Apr low to Sep high, 21, 100 DMAs), 1.3100 levels (50 DMA). Week’s data docket brings labour market data (Tuesday) and activity/GDP data (Friday).

Surge in momentum suggests further US Dollar (USD) strength, but the pace and extent is likely to be more moderate. The level to watch is 7.2400, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

USD to reach 7.2400 near term

24-HOUR VIEW: “Our view for USD to rise above 7.2200 yesterday did not turn. After reaching a high of 7.2133, it staged an unexpectedly sharp drop, reaching a low of 7.1420. The decline appears to be excessive, and USD is unlikely to weaken much further. Today, USD is more likely to trade in a range between 7.1350 and 7.1770.”

1-3 WEEKS VIEW: “USD soared by 1.48% two days ago, closing at 7.2040. Yesterday (07 Nov, spot at 7.2020), we indicated that ‘The surge in momentum suggests further USD strength, but severely overbought conditions suggest the pace and extent is likely to be more moderate.’ We indicated that ‘The level to watch on the upside is 7.2400,’ and ‘should USD breach 7.1300, it would indicate that the rally is ready to take a breather.’ We did not anticipate the sharp pullback that reached a low of 7.1420. Although momentum has slowed, we will continue to hold the same view as long as 7.1300 is not breached.

US Dollar (USD) net long positions have decreased. Euro (EUR) net short positions have decreased. GBP net long positions have decreased for the fifth consecutive week and JPY net short positions have increased, Rabobank’s FX analysts Jane Foley and Molly Schwartz note.

GBP is the only G10 currency to have outperformed the USD

“USD net long positions have decreased, driven by a decrease in long positions. The US presidential election was held on November 5th, and Donald Trump was announced as President-elect on November 6th, accompanied by a GOP-majority in the Senate. Congressional results have not been finalized, but the GOP has already flipped two seats previously held by the Dems.”

“EUR net short positions have decreased, driven by a decrease in short positions. Eurozone aggregate CPI inflation registered a slightly firmer than expected 2.0% y/y last week. The market is currently pricing in only 17.2% of a 50bp cut at the December 12th EUR is the second worst performing G10 currency month-to-date in the spot market, depreciating 1.84% against USD.”

GBP net long positions have decreased for the fifth consecutive week, driven by a decrease in long positions. GBP is the only G10 currency to have outperformed the USD year-to-date. JPY net short positions have increased, driven by an increase in short positions. JPY continues to be the worst performing G10 currency year-to-date, depreciating 6.97% against USD.

The Euro EUR continued to trade near recent lows, weighed by fresh concerns of political uncertainty in Germany (Chancellor Scholz dismissed Finance Minister and called for confidence vote on 15 Jan) and ongoing concerns of Trump win on European security and exports to US (due to potential tariffs). Pair was last seen at 1.0675 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Further downside towards 1.05 levels

“Daily momentum turned bearish while RSI fell. Support at 1.0670/80 levels (recent low) before 1.06 (2024 low). Breach below this support will open way for further downside towards 1.05 levels. Resistance at 1.0780, 1.0830/40 levels (21 DMA, 61.8% fibo retracement of 2024 low to high), 1.0870 (200 DMA).”

“But given that quite a handful of negative news maybe factored into the price of EUR in the near term, further downside may require additional catalyst. But looking out into forecast horizon, the path of least resistance may be skewed to the downside.”

The Pound Sterling (GBP) is doing quite well as the market continues to only price in a very modest easing cycle and the UK, by nature of its trade deficit with the US, may not be front and centre in the looming trade war, ING’s FX analyst Chris Turner notes.  

EUR/GBP can reach 0.8200 before year-end

“Away from US politics, the focus in the UK this week will be data and Bank of England speeches. Wage and employment data is in focus tomorrow, while BoE Governor Andrew Bailey makes an important Mansion House speech Thursday evening.”

“Given that the UK economy has been performing quite well and Donald Trump's policies could prove inflationary, Bailey may not want to repeat his narrative that UK rates could be cut faster than expected. But let's see.”

“EUR/GBP is starting to look comfortable below 0.8300, and 0.8200 is very possible for EUR/GBP before year-end.”

Sharp pullback appears to be overextended; instead of continuing to weaken, the US Dollar (USD) is likely to trade in a range of 152.50/153.85. In the longer run, upward momentum has slowed sharply and quickly; a break of 152.50 would mean that USD is likely to trade in a range instead of heading higher, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

Sharp pullback appears to be overextended

24-HOUR VIEW: “When USD was at 154.55 yesterday, we indicated that ‘the overbought USD rally could extend above 155.00 before pausing.’ However, USD did not rise above 155.00. Instead, it pulled back sharply to 152.69. The pullback appears to be overextended, and USD is unlikely to weaken much further. Today, USD is more likely to trade in a range between 152.50 and 153.85.”

1-3 WEEKS VIEW: “We highlighted yesterday (07 Nov, spot at 154.55) that’ the spike in momentum suggests USD could continue to rise, possibly to 156.00.’ The subsequent steep pullback was surprising, and upward momentum has slowed sharply and quickly. From here, if USD breaks below 152.50 (no change in ‘strong support’ level), it would mean that USD is likely to trade in a range instead of heading higher.”

EUR/USD remains relatively soft near 1.07, ING’s FX analyst Chris Turner notes.  

EUR can break below 1.0670/80 to 1.0600

“In the background is the focus on German federal elections, with the latest reports suggesting a no-confidence vote could be held in December and a snap election as early as February.”

“It seems a leap of faith at this stage to expect a complete turnaround in the German fiscal position and instead the onus will be on the European Central Bank to support the eurozone economy. Our team favours a 50bp ECB rate cut in December compared to the current 28bp priced.”

“Two-year EUR:USD swap rate differentials remain exceptionally wide at 170bp in the dollar's favour and make the case that it will only be position-adjustment that generates any EUR/USD strength this week. We struggle to see that dominating, and instead see EUR/USD unable to hold gains over 1.0750 before breaking below 1.0670/80 to 1.0600.”

• USD/JPY surges above 153.50 amid uncertainty over scope for further BoJ policy-tightening
• Japan’s growth outlook appears to be weak as Shigeru Ishiba fails to form a majority government.
• Trump’s victory has dampened Japan’s export sector outlook.

The USD/JPY climbs above 153.50 in European trading hours on Monday. The asset strengthens as the Japanese Yen (JPY) has weakened across the board amid growing uncertainty over when the Bank of Japan (BoJ) will hike interest rates again.

The BoJ Summary of Opinions (SOP) for the October policy meeting showed that officials were divided over the timeframe for further policy tightening. Market experts believe that political uncertainty and likely consequences of Republican Donald Trump’s victory in the United States (US) presidential elections on Japan’s economic outlook have limited the scope for BoJ to deliver more rate hikes.

Liberal Democratic Party (LDP) leader Shigeru Ishiba is elected as prime minister again on Monday but has to lead with a minority government, given that its part lost its lower house majority held since 2012, a scenario that is unfavorable for smooth implementation of government policies.

Meanwhile, Trump’s landslide victory in the US, who is expected to take both the Senate and the House of Representatives is expected to weigh on Japan’s export sector. Trump vowed to raise import tariffs by 10% universally, which will weaken the scale of exports from Japan, being one of the leading trading partners to the US.

Trump’s victory has kept the US Dollar (USD) on the front foot. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, inches closer to a four-month high of 105.45.

This week, investors will focus on the US Consumer Price Index (CPI) data for October, which will be published on Wednesday. Economists expect the annual headline inflation to have accelerated to 2.6% from 2.4% in September, with core figures growing steadily by 3.3%.

As long as 0.5955 is not breached, the New Zealand Dollar (NZD) could edge higher to 0.6075, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

The next level to watch is 0.5955  

24-HOUR VIEW: “Yesterday, we highlighted that NZD ‘could drop to 0.5900 before the risk of a more sustained recovery increases.’ However, NZD rebounded from a low of 0.5933 to 0.6037, closing sharply higher by 1.41% at 0.6023. The sharp rebound appears to be running ahead of itself, and instead of continuing to advance, NZD is more likely to trade in a 0.5980/0.6040 range.”

1-3 WEEKS VIEW: “NZD dropped to a 3-month low of 0.5912 two days ago. Yesterday (07 Nov), when NZD was at 0.5935, we highlighted that ‘Although the increase in momentum indicates further NZD weakness, conditions remain oversold due to the recent month-long decline.’ We pointed out that ‘the potential of any weakness may be limited.’ We also pointed out that ‘as long as 0.6015 is not breached, NZD could drop to 0.5875 before a rebound is likely.’ We did not expect NZD to rebound so quickly and sharply, as it soared to 0.6037. Downward momentum has faded. Upward momentum is beginning to build, albeit tentatively. From here, as long as 0.5955 is not breached, NZD could edge higher to 0.6075. Currently, the chance of a sustained break above this level is not high.”

People's Bank of China (PBOC) Governor Pan Gongsheng said on Monday that they “will make every effort to maintain the overall stability of the financial system.”

Additional quotes

A quick take on global FX markets this Monday morning sees the US Dollar (USD) largely holding onto gains made on the back of the likely Republican clean sweep, while China's fiscal stimulus has so far failed to move the needle on recovery prospects elsewhere in the world. Friday also saw the USD move a little stronger late in Europe after the Financial Times reported that Donald Trump is again lining up Robert Lighthizer to run his trade policy, ING’s FX analyst Chris Turner notes.  

DXY can break above 105.50 near term

“On the subject of Lighthizer, he apparently encouraged Trump to intervene and sell the USD to support US manufacturers during the last Trump administration. No doubt such speculation will occasionally emerge during Trump's next term – especially if the USD strengthens a lot. But Trump's policy set is a positive one for the USD and the former president rejected calls for intervention when last in office." 

“We disagree and think this clean election result can boost US consumer and business sentiment at the same time as it weighs on business sentiment elsewhere in the world. Remember one of the big negative impacts of tariffs is its uncertainty weighing on business investment. We see the USD strengthening into year-end.”

“After today's Veterans Day Holiday, the US focus this week will be on whether the Republicans win the House and what should be sticky US core CPI and a firm October retail sales reports, all of which look USD positive. We could see some more DXY consolidation in this 104.50-105.50 range but would expect an upside breakout at some stage.”

Downward momentum has faded; outlook is unclear, and the Pound Sterling (GBP) could trade in a range between 1.2850 and 1.3055, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

GBP can trade in a range between 1.2850 and 1.3055

24-HOUR VIEW: “GBP dropped sharply to 1.2835 on Wednesday, and then rebounded. Yesterday (Thursday), we highlighted that GBP ‘could retest the 1.2835 low before stabilisation is likely.’ Our view was incorrect, as GBP soared, reaching a high of 1.3009. GBP then pulled back from the high, closing at 1.2986. The pullback in overbought conditions indicates that instead continuing to advance, GBP is more likely to trade sideways between 1.2930 and 1.3010.”

1-3 WEEKS VIEW: “We shifted from a neutral to negative GBP stance yesterday (07 Nov, spot at 1.2890), indicating that “the breach of the 1.2900 support suggests GBP could continue to weaken.’ However, we pointed out that ‘there is a weekly support at 1.2800.’ We added, ‘To maintain the rapid buildup in momentum, GBP must remain below 1.3000.’ Our view was invalidated quickly, as GBP staged a strong rebound that broke above 1.3000 (high has been 1.3009). The buildup in downward momentum has faded. The rapid but short-lived swings have resulted in an unclear outlook. For now, GBP could trade in a range, likely between 1.2850 and 1.3055.”

The US Dollar (USD) saw a late comeback into Friday NY close as there appeared to be some disappointment with China stimulus. Trump's threat on tariff remains one of the biggest risks that markets are concerned about, but we do not know how long it takes for those policies to be in place after all, President inauguration only takes place on 20th Jan. DXY was last at 105.40 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

The focus is on US CPI on Wednesday

“And we do not know for sure if election threats/ promises become reality. Tariff risk and Trump policy uncertainty may keep USD supported on dips but in the event of a delay to implementing tariffs or even in the scenario it doesn’t materialise, then further unwinding of Trump trade may also be likely.”

“Daily momentum is showing a mild bearish bias while RSI fell. Support at 103.70/80 levels (21, 200 DMAs, 50% fibo retracement of 2023 high to 2024 low). Resistance at 105.60 levels (76.4% fibo).”

“This week, the focus is on US CPI on Wed. Consensus expects core to hold steady at 3.3% while headline CPI may come in higher at 2.6%. The uptick may raise doubts if Fed will still cut rates in Dec. But we expect Fed to cut in Dec amid cooling job market. Moreover, post-FOMC last week, Powell commented that the election will have no near-term effect on monetary policy decisions.”

Price action suggests further Euro (EUR) weakness; the levels to watch are 1.0665 and 1.0600, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

Levels to watch are 1.0665 and 1.0600

24-HOUR VIEW: “Yesterday, we held the view that ‘as long as 1.0800 is not breached, EUR could drop to 1.0665 before stabilisation can be expected.’ We were also of the view that ‘a sustained break below this level seems unlikely.’ Instead of dropping to 1.0665, EUR rebounded strongly, reaching a high of 1.0824 in NY trade. The strong bounce is likely part of a broader range trading phase. Today, we expect EUR to trade between 1.0740 and 1.0840.”

1-3 WEEKS VIEW: “We highlighted yesterday (07 Nov, spot at 1.0730) that the steep selloff from two days ago suggests ‘further EUR weakness.’ We pointed out, ‘The support levels to watch are 1.0665 (low in Jun) and the year-to-date low of 1.0600 in April.’ While we did not quite expect EUR to rebound strongly, we will maintain our view as long as 1.0870 is not breached (no change in ‘strong resistance’ level from yesterday).”  

• The Mexican Peso weakens on rumors Donald Trump has offered the job of trade representative to Robert Lighthizer. 
• The former US trade rep is known for his protectionist stance and could squeeze Mexico in future talks.  
• The Peso is further weighed by concerns the Republicans will win a majority in Congress, giving them a “clean sweep”.  

The Mexican Peso (MXN) edges lower in its key pairs on Monday after ending last week on a negative note. The Peso lost 1.86% against the US Dollar (USD) on Friday after the Financial Times (FT) published a story about President-elect Donald Trump offering US attorney and known protectionist Robert Lighthizer the job of US Trade Representative, a post he held under Trump’s previous administration. Lighthizer is known to be a tough negotiator after representing the US in the current free trade agreement negotiations between the United States (US), Mexico, and Canada, the USMCA. 

MXN weakened on fears that he will take an equally tough stance when the agreement comes up for renegotiation in 2026. In the run-up to the election, Trump vowed to hit Mexican auto imports with massive tariffs in an attempt to curb the number of cheap Chinese electric vehicles made in Mexico flooding the US market. 

Mexican Peso declines on rumors of Lighthizer appointment

The Mexican Peso weakened overall at the end of last week after the FT reported that Donald Trump had offered Robert Lighthizer the job of US new trade chief. However, an article in Reuters on Friday said the opposite: one of its sources in the White House had called the rumors “untrue,” and Lighthizer had not been invited to take the role.

Another potential risk for the Peso emanating from north of the border is the increasing likelihood that the Republican party will win a majority in the US Congress. Republicans have already won the presidency and a majority in the US Senate. If they also secure a majority in Congress, it would give them a so-called “clean sweep”, with much greater powers to push through their legislative agenda without resistance. In addition, six out of the nine US Supreme Court justices have been appointed by Republicans, suggesting they also have the balance of power in an important counterweight to the legislator. 

Votes for Congress are still being counted. However, the Republican party has won 214 seats to the Democratic party’s 203, with only 18 outstanding, according to the Associated Press. The threshold for a majority is 218.

According to forecasts by El Financiero, a Republican majority in Congress with Trump as President could lead the Peso to weaken even further against the USD. They estimate a band of between 21.14 and 22.26 for USD/MXN in such a scenario. The pair currently trades in the 20.00s. 

If the Republicans fail to win a majority in Congress, however, the pair is likely to end up in a range between 19.70 and 21.14, says El Financiero. 

On the economic data front, the Peso could see volatility later in the week when the Bank of Mexico (Banxico) meets on Thursday for its November policy meeting. Although recent inflation data came out higher than expected, experts still see a good chance of Banxico cutting the bank rate by 0.25% to 10.25%. Such a move would be negative for the Peso since lower interest rates attract lower foreign capital inflows. 

Monday sees the release of the Industrial Production data for September and Consumer Confidence for October, while in the US bond markets are closed for the Veterans’ Day public holiday.

Technical Analysis: USD/MXN potentially unfolding abc pattern higher

USD/MXN recovers from the base of its rising channel and starts to extend higher in line with the broader uptrend. 

USD/MXN Daily Chart 

The pair seems to be renewing its short-term uptrend. It is already in an established medium and long-term uptrend. As the old technical analysis saying goes “the trend is your friend”, suggesting the odds favor more upside to come. 

The bullish thesis is further supported by the 4-hour chart, which shows a possible three-wave ‘abc’ pattern, or “Measured Move,” unfolding. Waves ‘a’ and ‘b’ look to have been completed, and there is a possibility that wave ‘c’ is about to stretch higher. 

USD/MXN 4-hour Chart 

This final wave ‘c’ should be at least a Fibonacci 61.8% of wave ‘a’, indicating a likely endpoint at 20.40. A break above the top of wave ‘a’ at 20.28 would provide verification. 

For more confidence that the uptrend has resumed, traders should wait for a break above the 20.80 high of November 6. Such a move would probably confirm more gains ahead, with 21.00 as the next key target and resistance level (round number, psychological support). 

• The Pound Sterling trades in a tight range as investors await the UK Employment data for the three months ending September.
• The UK Unemployment Rate is estimated to have increased to 4.1%.
• The US Dollar will be influenced by the US inflation data for October.

The Pound Sterling (GBP) exhibits a mixed performance against its major peers on Monday, in a calm start of the week as investors keep their powder dry ahead of the United Kingdom (UK) labor market data for the three months ending September, which will be released on Tuesday. The jobs data could significantly influence market expectations for the Bank of England (BoE) monetary policy decision in the December meeting. 

Economists expect that the Unemployment Rate rose to 4.1% in the three months to September from 4.0% in the quarter ending August. Investors will also pay close attention to the Average Earnings data, a key measure of wage growth that drives consumer spending. The growth in earnings has been a major contributor to high inflation in the services sector, which is closely tracked by BoE officials for decision-making on interest rates.

The Average Earnings Excluding bonuses are expected to have grown by 4.7%, slower than the former reading of 4.9%. Softer wage growth would lift expectations of more interest rate cuts by the BoE as it will suggest a further decline in inflation in the service sector. On the contrary, higher wage growth would do the opposite. Average Earnings including bonuses are estimated to have accelerated to 3.9% from the prior release of 3.8%.

Last week, the BoE reduced its interest rates by 25 basis points (bps) to 4.75%, as expected. BoE Governor Andrew Bailey signaled a more gradual policy-easing approach and emphasized that the bank is committed to bringing inflation down sustainably to the desired rate of 2%.

Daily digest market movers: Pound Sterling weakens against US Dollar

• The Pound Sterling drops to near 1.2900 against the US Dollar (USD) in London trading hours on Monday. The GBP/USD pair declines as the US Dollar extends Friday’s recovery and aims to revisit a four-month high. The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, climbs above 105.30.
• The Greenback strengthens on expectations of higher investment and spending in the United States (US) as Republicans look set to take control of both the Senate and the House of Representatives, a scenario that would allow the Trump administration to implement fiscal policies quickly. 
• The expected change in government policies, from higher import tariffs to lower taxes, would boost the US fiscal deficit and inflationary pressures, a scenario that could force the Federal Reserve (Fed) to opt for a restrictive policy stance. However, Fed Chair Jerome Powell pushed back expectations of any near-term impact on the monetary policy last Thursday after the central bank cut interest rates by 25 basis points (bps) to 4.50%-4.75%.
• This week, a slew of Fed officials are lined up for commentary on Thursday’s interest rate decision and guidance for monetary policy action in the last meeting of this year in December. In addition to Fed speeches, investors will also focus on the US Consumer Price Index (CPI) data for October, which will be published on Wednesday. The CPI report is expected to show that the annual headline inflation accelerated to 2.6% from 2.4% in September, with core figures growing steadily by 3.3%.

Technical Analysis: Pound Sterling falls to near 1.2800

The Pound Sterling trades at a make or a break against the US Dollar near the breakdown region of the rising channel pattern. The near-term trend of GBP/USD remains bearish as the 20-day and 50-day Exponential Moving Average (EMAs) around 1.3000 and 1.3035, respectively, are declining. However, the pair remains well-supported by the 200-day Exponential Moving Average (EMA) around 1.2860.

The 14-day Relative Strength Index (RSI) hovers near 40.00. A bearish momentum would resume if the RSI (14) fails to hold above this level.

Looking down, the August low at 1.2665 will be a major cushion for Pound Sterling bulls. On the upside, the Cable will face resistance near the psychological figure of 1.3000.

Silver prices (XAG/USD) broadly unchanged on Monday, according to FXStreet data. Silver trades at $31.28 per troy ounce, broadly unchanged 0.10% from the $31.25 it cost on Friday.

Silver prices have increased by 31.47% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 85.25 on Monday, down from 85.92 on Friday.

(An automation tool was used in creating this post.)

China’s Consumer Price Index (CPI) slowed further to 0.3% y/y in October (Bloomberg est: 0.4%; September: 0.4%). Core CPI (excluding food & energy) barely rose even though it inched higher to 0.2% y/y from 0.1% y/y in September. Services inflation ticked higher to 0.4% y/y (September: 0.2%) but consumer goods inflation moderated to 0.2% y/y (September: 0.5%) in October.

Prices near flat in October

Headline CPI and PPI weakened in October. The moderation in food prices, lower gasoline prices and the rapid cooling of travel demand after the National Day holidays kept prices in check. PPI was weighed by falling prices of some international commodities, but the National Bureau of Statistics attributed the narrowing pace of m/m decline to the government’s stimulus measures and domestic enterprise promotional activities.

We lower our forecast for China’s headline CPI to 0.4% (from 0.5%) and 0.9% (from 1.2%) for 2024 and 2025 respectively. We also revise down our forecast for the PPI to -2.2% (from -2.0%) in 2024 and -1.2% (from -0.9%) in 2025 as headwinds from US-China trade tensions are expected to increase next year following Trump’s re-election.

We expect the PBOC to keep its easing bias. Chinese banks have lowered their loan prime rates (LPR) by a larger-than-expected 25 bps in October and PBOC indicated another 25-50 bps reduction to banks’ reserve requirement ratio (RRR) by year-end to stabilise growth. The lower interest rates will support issuance of CNY10 tn in local government bonds in the multi-year debt swap plan approved last Friday (8 November).

• NZD/USD tests the upper boundary of the descending channel near the nine-day EMA at 0.5980 level.
• The 14-day RSI remains below the 50 level; a further decline toward the 30 mark would strengthen bearish bias.
• The pair may depreciate toward the lower boundary of the descending channel at 0.5880 level.

The NZD/USD pair remains subdued for the second consecutive day, trading around 0.5960 during European hours on Monday. Analysis of the daily chart highlights a strong bearish bias, as the pair remains within a descending channel pattern.

The 14-day Relative Strength Index (RSI), a key momentum indicator, stays below the 50 level, indicating sustained bearish momentum. A further dip toward the 30 level would intensify this downward trend for the NZD/USD pair.

Additionally, the nine-day Exponential Moving Average (EMA) remains below the 14-day EMA, signaling continued weakness in short-term price momentum for the NZD/USD pair.

On the downside, NZD/USD may navigate the region around the psychological level of 0.5900, followed by the lower boundary of the descending channel at 0.5880 level. A break below the descending channel could strengthen the bearish bias and lead the pair to revisit the throwback support at the 0.5850 level.

Regarding the resistance, the NZD/USD pair finds an immediate barrier at the upper boundary of the descending channel at the nine-day EMA at 0.5980 level, followed by the 14-day EMA at 0.5994 level.

A break above the 14-day EMA would improve the price momentum and support the NZD/USD pair to explore the area around the psychological level of 0.6100 level.

NZD/USD: Daily Chart

• USD/CAD gains positive traction for the second successive day on Monday amid a bullish USD.
• Subdued Oil prices undermine the Loonie and lend support amid bets for a jumbo BoC rate cut.
• Traders await the US consumer inflation and Fed Chair Jerome Powell’s speech later this week.

The USD/CAD pair attracts buyers for the second successive day on Monday and sticks to its modest intraday gains, around the 1.3925 region through the first half of the European session. Spot prices draw support from a combination of factors and remain within the striking distance of the highest level since October 2022 retested last week.

Crude Oil prices struggle to gain any meaningful traction amid the disappointment over China's fiscal stimulus and softer-than-expected Chinese inflation figures, which tempered hopes for a fuel demand recovery in the world's top importer. Meanwhile, Friday's mixed Canadian employment figures do little to dent market expectations about a more aggressive easing by the Bank of Canada (BoC). This, in turn, is seen undermining the commodity-linked Loonie, which, along with a bullish US Dollar (USD) buying, pushes the USD/CAD pair higher at the start of a new week. 

The USD Index (DXY), which tracks the Greenback against a basket of currencies, climbs back closer to a four-month top touched last week amid the optimism over US President-elect Donald Trump's expansionary policies. Furthermore, Trump's pledge to impose a universal 10% tariff on imports from all countries is expected to boost inflation and restrict the Federal Reserve (Fed) to ease its monetary policy more aggressively. This remains supportive of elevated US Treasury bond yields, which, along with the cautious market mood, continues to benefit the safe-haven buck.

The USD bulls, however, could pause for a breather ahead of the release of the US consumer inflation figures and speeches by a slew of influential FOMC members, including Fed Chair Jerome Powell later this week. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the Greenback and the USD/CAD pair remains to the upside. Hence, any corrective pullback might still be seen as a buying opportunity and remain limited in the wake of a partial holiday in the US and Canada.

• GBP/JPY appreciates due to uncertainties regarding the future BoJ interest rates outlook.
• LDP’s Shigeru Ishiba has been re-elected as Japan's Prime Minister, securing 221 of the 465 votes in the lower house of parliament.
• BoE’s Bailey emphasized that monetary policy will remain tight until the risks of persistent inflationary pressures are reduced.

GBP/JPY breaks its two days of losses, trading around 197.90 during the European session on Monday. The Japanese Yen (JPY) faces challenges due to uncertainty surrounding the Bank of Japan’s (BoJ) interest rate hikes in the future. The BoJ Summary of Opinions for the October meeting highlighted divisions among policymakers regarding the timing of future interest rate hikes.

Some members of the Bank of Japan expressed concerns about global economic uncertainties and rising market volatility, particularly around the Yen's depreciation. Still, the central bank has suggested it might increase its benchmark policy rate to 1% by the latter half of the 2025 fiscal year.

Liberal Democratic Party’s (LDP) Shigeru Ishiba has been re-elected as Japan's Prime Minister, receiving 221 out of 465 votes in the lower house of parliament. This follows last month’s election, in which Ishiba’s LDP, along with its coalition partner Komeito, lost their parliamentary majority.

The Bank of England (BoE) lowered interest rates by 25 basis points on Thursday. BoE Governor Andrew Bailey noted that, if the economy develops as anticipated, interest rates will continue to decrease gradually. However, Bailey stressed that monetary policy will remain tight until the risks of persistent inflationary pressures are reduced.

The Office for Budget Responsibility recently revised its inflation forecast for 2025, raising it to an average of 2.6%, up from the 1.5% estimate in March. This adjustment is closely aligned with the BoE’s August projections, which forecast inflation at 2.4% in one year, 1.7% in two years, and 1.5% in three years.

• EUR/USD remains edgy as investors await a slew of Fed speakers for fresh interest rate guidance.
• The Euro weakens as Trump’s policies are expected to weigh on the Eurozone’s exports.
• This week, investors will focus on the US inflation data for October.

EUR/USD trades cautiously near more than four-month low around 1.0700 in Monday’s European session. The major currency pair remains on tenterhooks as the election of Republican Donald Trump as US President has strengthened the US Dollar’s (USD) outlook in the long run. The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, edges higher to near 105.00.

Trump vowed to raise import tariffs and lower taxes in his election campaign, which would add to United States (US) inflationary pressures and boost debt levels. According to a November 6-7 Reuters poll, 62% of respondents – including 94% of Democrats and 34% of Republicans – said that Trump's policies likely "will push the US national debt higher."

Trump's tax cut proposals could add $7.5 trillion to the nation's debt over the next decade, according to the nonpartisan Committee for a Responsible Federal Budget.

This week, investors will pay close attention to speeches from a slew of Federal Reserve (Fed) officials to get fresh cues about the likely monetary policy action in December. According to the CME FedWatch tool, there is a 65% chance that the central bank will cut interest rates again by 25 basis points (bps) to 4.25%-4.50% in December. This would be the second quarter-to-a-percent interest rate cut by the Fed in a row, as it also reduced its key borrowing rates last week.

On the economic front, investors will focus on the US Consumer Price Index (CPI) data for October, which will be published on Thursday. The impact of the inflation data is expected to be nominal on the interest rate outlook as Fed officials are confident about the disinflation trend towards the bank’s target of 2%. However, a significant deviation from the consensus could impact the same.

Daily digest market movers: EUR/USD is under pressure amid Euro’s weak outlook

• EUR/USD remains on tenterhooks as the Euro’s (EUR) outlook is uncertain due to expectations of a global trade war after Trump’s victory in the US presidential election. In the election campaign, Trump warned that the European bloc would have to pay a big price for not buying enough American exports.
• The impact of Trump’s victory is noticeable on European economic leaders. Speaking at the European Union (EU) Summit on Friday, former European Central Bank (ECB) President Mario Draghi said, "The sense of urgency today is greater than it was a week ago," Reuters reported.
• Domestic problems in the Eurozone’s major members have also weakened the Euro’s appeal. The collapse of the German three-party coalition has come at a time when the economy is going through a rough phase. The nation managed to dodge a technical recession after expanding surprisingly by 0.2% quarterly in Q3, according to data released by the Federal Statistics Office of Germany on October 30. However, political uncertainty could lead to postponement of government spending and investments.
• Meanwhile, investors look for fresh cues about the ECB’s likely interest rate action in the December meeting. ECB policymaker and head of Austrian National Bank Robert Holzmann said there is no reason for the central bank to not cut interest rates next month at current point of time, however, the decision will be based on the economic data, which will be available in December.

Technical Analysis: EUR/USD remains lower near 1.0700

EUR/USD trades in a tight range near the more than four-month low around 1.0700. The near-term trend of the major currency pair remains bearish as the 20-day and 50-day Exponential Moving Averages (EMAs) near 1.0840 and 1.0910, respectively, continue to decline.

The 14-day Relative Strength Index (RSI) wobbles near 40.00. A bearish momentum would resume if the RSI (14) slides below that level.

The upward-sloping trendline around 1.0800, plotted from the April 16 low at around 1.0600, will act as a key resistance zone for Euro (EUR) bulls. Looking down, the shared currency pair could decline to the year-to-date (YTD) low of 1.0600.

• AUD/JPY gains ground due to uncertainties regarding the future BoJ interest rates outlook.
• BoJ's Summary of Opinions highlighted divisions among policymakers regarding the timing of future rate hikes.
• The Australian Dollar faced challenges as China's latest stimulus measures fell short of investors’ expectations.

AUD/JPY retraces its recent losses from the previous session, trading around 101.20 during early European hours on Monday. The upside of the AUD/JPY cross is attributed to lower Japanese Yen (JPY) following the release of the Bank of Japan's (BoJ) Summary of Opinions. The BoJ’s October report highlighted divisions among policymakers regarding the timing of future interest rate hikes.

Some members of the Bank of Japan expressed concerns about global economic uncertainties and rising market volatility, particularly around the Yen's depreciation. Still, the central bank has suggested it might increase its benchmark policy rate to 1% by the latter half of the 2025 fiscal year. 

In Japan, Prime Minister Shigeru Ishiba’s Cabinet resigned en masse before the Diet (parliament) during an extraordinary Cabinet meeting on Monday morning. With the ruling coalition of the Liberal Democratic Party (LDP) and Komeito now holding less than a majority in the House of Representatives, Monday’s vote is expected to lead to a runoff between Ishiba and Yoshihiko Noda, the leader of the major opposition party, the Constitutional Democratic Party.

The Australian Dollar (AUD) edged higher despite a generally cautious outlook due to concerns over Donald Trump’s proposed tariff increases on Chinese goods, which could impact Australian markets as China is one of its largest trading partners. 

Further weighing on the Australian Dollar were China’s latest stimulus measures, which fell short of investor expectations and dampened demand prospects for Australia’s top trading partner. On Friday, China announced a 10 trillion Yuan debt package aimed at easing local government financing pressures and supporting sluggish economic growth; however, the package stopped short of including direct economic stimulus initiatives.

• USD/CHF climbs to near 0.8770 in Monday’s early European session. 
• The victory of Donald Trump in the US presidential elections provides some support to the USD. 
• SNB’s Martin said the central bank had made "absolutely no commitment" to its future course of action. 

The USD/CHF pair extends its upside to around 0.8770, the highest since August 1 during the early European trading hours on Monday. The upward movement of the pair is bolstered by the strength of the US Dollar (USD) as traders await the US inflation data and Federal Reserve (Fed) speakers this week. 

Analysts expect that Trump's policies would put upward pressure on US inflation and bond yields while slowing the Fed’s path to ease policy. This, in turn, lifts the Greenback against the Swiss Franc (CHF). "Given this, we still expect that the Fed will cut another 25bp at the December meeting, but thereafter will only cut once per quarter, in contrast to our previous forecast for a 25bp cut every meeting," said JPMorgan economist Michael Feroli.

Traders will take more cues from the US Consumer Price Index (CPI), which is due on Wednesday. The headline CPI is expected to show an increase of 2.6% YoY in October, while the core CPI is estimated to show a rise of 3.3% YoY during the same period. In case of the hotter-than-expected outcome, this could further reduce the possibility of a December rate reduction, supporting the USD. 

The Swiss National Bank (SNB) Vice Chairman Antoine Martin said on Monday that the central bank is not locked into more interest rate cuts in December, adding that everything will depend on conditions when we assess the situation in December. The markets anticipate the SNB to cut at least 25 basis points (bps) from the current 1% level at its next meeting on December 12.

Here is what you need to know on Monday, November 11:

Markets remain cautiously optimistic at the start of a new week, following a record-setting rally on Wall Street last week. Disappointment with China’s 10 trillion yuan ($1.4 trillion) fiscal stimulus package and soft inflation data raise concerns over economic prospects, sagging investors’ confidence.

China’s CPI rose 0.3% last month from a year earlier, slowing from September's 0.4% rise and the lowest since June, data from the National Bureau of Statistics (NBS) showed on Saturday, missing a 0.4% increase estimated.

Meanwhile, the ‘Trump trades’ optimism seems to have returned, lifting the US equity futures and the benchmark 10-year Treasury bond yields. However, the US Dollar (USD) extends its upside consolidative phase against its major rivals, as traders refrain from placing fresh bullish bets on the Greenback ahead of Wednesday’s US Consumer Price Index (CPI) data release.

Looking ahead, it is a relatively quiet economic calendar In Europe while US traders observe a partial market holiday on Veterans Day. US bond markets are closed but stock markets will remain open this Monday.

Across the G10 FX board, the Japanese Yen (JPY) is the weakest so far, undermined by the uncertainty over the Bank of Japan’s (BoJ) interest rate hike timing. The BoJ published the Summary of Opinions from its October monetary policy meeting, which showed that “board members advise caution and taking time in raising rates.” USD/JPY holds sizeable gains to trade at around 153.50 following the BoJ’s Summary of Opinions.

AUD/USD attempted a tepid recovery, which remains capped at 0.6600 amid China concerns. At the same time, NZD/USD defends bids near 0.5975 after New Zealand's two-year inflation expectations, seen as the time frame when RBNZ policy action will filter through to prices, increased slightly to 2.12% in Q4 from 2.03% seen in Q3 2024 of this year.

EUR/USD lost its upside traction, returning to the red toward 1.0700 in the last hours. The Euro received a fresh lift in early Asia from European Central  Bank (ECB) Governing Council member Robert Holzmann’s comments. Holzmann said that a December interest rate cut is a possibility but by no means guaranteed.

GBP/USD holds lower ground after testing the 1.2900 round figure, as traders stay unnerved heading toward Tuesday’s UK labor market data,

USD/CAD gyrates at around 1.3911 amid light trading due to Remembrance Day in Canada on Monday. WTI Oil licks its wounds near the $70 mark, reeling from China’s stimulus disappointment and waning storm threat in the US.

Gold remains depressed below $2,700, lacking a clear impetus, as markets digest the past week’s Donald Trump’s US presidential victory and the Federal Reserve (Fed) rate cut.

FX option expiries for Nov 11 NY cut at 10:00 Eastern Time via DTCC can be found below.

EUR/USD: EUR amounts

• 1.0700 1.2b
• 1.0780 1.2b
• 1.0850 948m

USD/CHF: USD amounts     

• 0.8525 1.5b

AUD/USD: AUD amounts

• 0.6650 608m

USD/CAD: USD amounts       

• 1.3740 1.3b
• 1.4065 1.4b

NZD/USD: NZD amounts

• 0.5940 606m

 Swiss National Bank (SNB) Vice Chairman Antoine Martin said on Monday that the “SNB had made "absolutely no commitment" to its next course of action.”

Additional quotes

Market reaction

USD/CHF was last seen trading 0.21% higher on the day at 0.8770. 

• EUR/JPY strengthened as the BoJ's Summary of Opinions highlighted divisions among policymakers over the timing of future interest rate hikes.
• Japanese Prime Minister Shigeru Ishiba faces a parliamentary leadership vote today, following the loss of ruling LDP lower house majority.
• Deutsche Bank analysts have warned that higher US tariffs could negatively affect the Eurozone’s export sector.

EUR/JPY rises to near 164.50 during the Asian trading session on Monday, driven by a weakening Japanese Yen (JPY). This movement follows the release of the Bank of Japan's (BoJ) October Summary of Opinions, which highlighted divisions among policymakers regarding the timing of future interest rate hikes.

Some BoJ members raised concerns about global economic uncertainties and the increasing market volatility, particularly in relation to the JPY's depreciation. Nevertheless, the central bank has indicated that it may raise its benchmark policy rate to 1% by the latter half of the 2025 fiscal year.

Meanwhile, Japanese Prime Minister Shigeru Ishiba faces a parliamentary leadership vote today, after the ruling Liberal Democratic Party (LDP) lost its lower house majority, which it had held since 2012. Ishiba may now seek to form a new government with support from minor parties, according to The Associated Press.

In Germany, Chancellor Olaf Scholz appointed a new finance minister following the dismissal of the previous one, a move that effectively dissolves the ruling coalition. This decision has sparked calls from opposition parties and business leaders for new elections to restore stability amid the growing political uncertainty.

Analysts at Deutsche Bank have warned that higher tariffs from the US could put pressure on the Eurozone’s export sector, potentially affecting economic growth and the Euro. They highlighted the high level of uncertainty surrounding various factors, including the precise impact of the US tariffs, the timing of their implementation, and how Europe will respond.

• GBP/USD softens to around 1.2910 in Monday’s early European session.  
• The negative view of the pair prevails below the 100-day EMA, with the bear RSI indicator. 
• The initial support level for the pair emerges at 1.2875; the immediate resistance level is located at 1.2983. 

The GBP/USD pair weakens to near 1.2910 during the early European session on Monday. The stronger US Dollar (USD) following Donald Trump’s election win continues to undermine the major pair as traders expect the inflationary impulses will keep the US Federal Reserve (Fed) from cutting rates as much as they otherwise would have. 

On the other hand, the Bank of England (BoE) reiterated that “a gradual approach to removing policy restraint remains appropriate. Monetary policy will need to continue to remain restrictive for sufficiently long.” Less dovish remarks from the UK central bank could help limit the INR’s losses in the near term. 

According to the daily chart, GBP/USD keeps the bearish vibe unchanged on the daily timeframe, with the price holding below the key 100-day Exponential Moving Average (EMA). Furthermore, the downward momentum is reinforced by the 14-day Relative Strength Index (RSI), which is located below the midline around 43.85, indicating the path of least resistance is to the downside. 

The initial support level for GBP/USD emerges at 1.2875, the low of November 7. Further south, the next contention level is located in the 1.2850-1.2840 zone, representing the lower limit of the Bollinger Band and the low of October 31. 

On the bright side, the 100-day EMA at 1.2983 acts as an immediate resistance level for the major pair. The crucial upside barrier is seen at the 1.3000 psychological level. A decisive break above this level could see a rally to 1.3048, the high of November 6. 

GBP/USD daily chart

• Silver remains depressed below the 50-day SMA for the second straight day on Monday.
• The technical setup favors bearish traders and supports prospects for additional losses.
• Weakness below the $31.00 mark should pave the way for a slide to the 100-day SMA.

Silver (XAG/USD) trades with a negative bias for the second straight day on Monday, albeit it lacks follow-through selling and manages to hold above the $31.00 mark through the Asian session. The white metal, meanwhile, remains close to over a three-week low touched last Wednesday and seems vulnerable to prolonging its recent corrective decline from a 12-year peak. 

From a technical perspective, acceptance below the 50-day Simple Moving Average (SMA) validates the bearish outlook. Adding to this, oscillators on the daily chart have been gaining negative traction and suggest that the path of least resistance for the XAG/USD is to the downside. That said, it will still be prudent to wait for some follow-through selling below the $31.00 mark before positioning for a slide towards testing the 100-day SMA, currently pegged near the $30.35 region.

This is followed by the $30.00 psychological mark, below which the XAG/USD could accelerate the fall toward the next relevant support near the $29.50-$29.45 area.  The downward trajectory could extend further towards the $29.00 mark en route to the very important 200-day SMA, currently around the $28.70-$28.65 region. 

On the flip side, the $32.00 round figure now seems to have emerged as an immediate strong hurdle, above which the XAG/USD could climb to the $32.35-$32.40 supply zone. A sustained strength beyond might trigger a short-covering move and lift the white metal to the $33.00 mark. The positive momentum could extend further towards the next relevant barrier near the mid-$33.00s.

Silver daily chart

Gold prices fell in India on Monday, according to data compiled by FXStreet.

The price for Gold stood at 7,246.08 Indian Rupees (INR) per gram, down compared with the INR 7,285.18 it cost on Friday.

The price for Gold decreased to INR 84,516.86 per tola from INR 84,972.85 per tola on friday.

FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

(An automation tool was used in creating this post.)

• USD/CAD appreciates as Trump’s proposed fiscal policies could heighten inflation risks, prompting the Fed to adopt hawkish stance.
• Michigan Consumer Sentiment Index rose to 73.0 in November, exceeding 70.5 prior and expected 71.0 readings.
• The commodity-linked Canadian Dollar faces challenges due to lower crude Oil prices.

USD/CAD seems to extend its gains as US Dollar (USD) appreciates as traders anticipate a less dovish stance from the Federal Reserve (Fed), as Donald Trump is likely to pursue his campaign promises to enact substantial tariffs, including a 10% increase on imports and a reduction in corporate taxes. The USD/CAD pair trades around 1.3920 during the Asian session on Monday.

Trump’s fiscal policies could lead to higher investment, spending, and labor demand, elevating inflation risks. This could prompt the Fed to adopt a more restrictive monetary policy. However, Fed Chair Jerome Powell stated on Thursday that he doesn’t anticipate Trump’s potential return to the White House impacting the Fed’s near-term policy decisions.

On Friday, the preliminary University of Michigan Consumer Sentiment Index rose to 73.0 in November, up from 70.5 in October and exceeding the market’s expectation of 71.0. This upbeat data has broadly strengthened the Greenback.

The upside of the USD/CAD pair could also be supported by the weaker commodity-linked Canadian Dollar (CAD), which could be attributed to lower crude Oil prices, given the fact that Canada is the largest Oil exporter to the United States (US).

West Texas Intermediate (WTI) Oil price continues to decline for the second consecutive day, trading around $69.90 per barrel during the Asian hours on Monday. The drop in crude Oil prices comes as China's latest stimulus measures disappointed investors. Additionally, Oil prices have eased after eased concerns over potential supply disruptions from Storm Rafael in the US Gulf of Mexico.

• Gold price drifts lower for the second straight day and is pressured by a combination of factors.
• The Trump trade optimism continues to underpin the USD and weighs on the precious metal. 
• A positive risk tone also undermines the safe-haven XAU/USD despite more Fed rate cut bets.

Gold price (XAU/USD) adds to last week's heavy losses and remains under some selling pressure for the second successive day on Monday. The US Dollar (USD) holds steady below a four-month peak touched last week in the wake of optimism over Donald Trump's anticipated expansionary policies and turns out to be a key factor undermining the commodity. Furthermore, President-elect Trump has vowed to cut corporate taxes, which remains supportive of the risk-on mood and contributes to driving flows away from the safe-haven precious metal.

Meanwhile, expectations that Trump's policies could spur economic growth and inflation and restrict the Federal Reserve's (Fed) ability to cut interest rates more aggressively keep the US Treasury bond yields elevated. This, in turn, exerts additional pressure on the non-yielding Gold price, though bets for further Fed rate cuts could offer some support. Traders might also opt to move to the sidelines ahead of this week's release of the latest US consumer inflation figures and speeches by influential FOMC members, including Fed Chair Jerome Powell on Friday. 

Gold price continues to be weighed down by the Trump trade optimism and the risk-on mood

• Gold price registered its steepest weekly decline in over five months in the wake of a broad-based US Dollar rally and a sharp rise in the US Treasury bond yields following Donald Trump's victory in the US presidential election.
• The so-called Trump trade euphoria continues to act as a tailwind for the Greenback and exerts some downward pressure on the Gold price for the second successive day on Monday amid the upbeat mood around the equity markets.
• The Federal Reserve last week lowered its benchmark overnight borrowing rate by 25 basis points and signaled plans to ease monetary policy further, with traders still pricing in a 65% chance of another interest rate cut in December. 
• Minneapolis Fed President Neel Kashkari said that the central bank wants to have confidence and needs to see more evidence that inflation will go all the way back to the 2% target before deciding on further interest rate cuts.
• President-elect Trump’s protectionist push is expected to exacerbate global trade tensions and trigger a worldwide trend of restrictive trade practices, which could strain global markets and offer support to the safe-haven XAU/USD.
• Investors might also refrain from placing aggressive directional bets ahead of this week's release of the US consumer inflation figures on Wednesday, the US Producer Price Index on Thursday and US Retail Sales figures on Friday.
• Apart from this, investors will closely scrutinize comments from a slew of Fed officials, including Fed Chair Jerome Powell, for more signals about the rate-cut path, which will drive the USD and provide a fresh impetus to the commodity.

Technical Outlook: Gold price could find support near 50-day SMA, around $2,647-2,646 area

From a technical perspective, any further decline is likely to find some support near the $2,660 zone ahead of the 50-day Simple Moving Average (SMA), currently pegged near the $2,647-2,746 region. Some follow-through selling below last week's swing low, around the $2,643 area, will be seen as a fresh trigger for bearish traders. Given that oscillators on the daily chart have been losing positive traction, the Gold price might then accelerate the fall toward the October monthly swing low, around the $2,605-2,602 region.

On the flip side, momentum back above the $2,700 mark now seems to confront stiff resistance near the $2,718 region ahead of the $2,740-2,745 supply zone. A sustained strength beyond the latter will suggest that the corrective pullback has run its course and lift the Gold price beyond the $2,750 static resistance, towards the $2,758-2,790 zone, or the record high touched on October 31.

• WTI prices depreciated as China’s latest stimulus measures fell short of investor expectations, further weakening demand outlooks for Oil.
• China announced a 10 trillion Yuan debt package that does not include direct economic stimulus measures.
• Oil prices fall due to easing concerns over potential supply disruptions from Storm Rafael in the US Gulf of Mexico.

West Texas Intermediate (WTI) Oil price continues to decline for the second consecutive day, trading around $69.90 per barrel during the Asian hours on Monday. The drop in crude Oil prices comes as China's latest stimulus measures disappointed investors, further weakening demand expectations from the world’s largest Oil importer.

On Friday, China announced a 10 trillion Yuan debt package aimed at easing local government financing pressures and supporting economic growth, but the package did not include direct economic stimulus measures, which added to market concerns. Additionally, lower-than-expected Chinese economic data released on Saturday highlighted deflation risks, despite Beijing’s stimulus efforts in late September.

China’s Consumer Price Index (CPI) rose by 0.3% year-over-year in October, slightly below market expectations and down from September’s 0.4%. The month-over-month CPI fell by 0.3%, a sharper decline than the anticipated 0.1% drop, following a flat reading in September. Meanwhile, China’s producer prices dropped by 2.9% year-over-year, a steeper decline compared to the 2.8% fall in the previous month.

Oil prices have eased after concerns over potential supply disruptions from Storm Rafael in the US Gulf of Mexico subsided. As of Sunday, more than a quarter of US Gulf of Mexico Oil production and 16% of natural gas output remained offline, Reuters cited the offshore energy regulator.

However, crude Oil prices could gain momentum as Donald Trump is expected to tighten sanctions on OPEC+ members Iran and Venezuela, potentially reducing Oil supply to global markets. Additionally, Oil markets are being supported by strong demand from US refiners, who are anticipated to operate their plants at over 90% of their crude processing capacity, amid low inventories.

• The Indian Rupee trades sideways in Monday’s Asian session.  
• Foreign equity inflows drag the INR lower, but lower crude oil prices and likely RBI intervention could cap its downside. 
• Investors brace for India’s October CPI inflation report, which is due on Tuesday. 

The Indian Rupee (INR) flats lines on Monday after falling to a record low in the previous session. The local currency remains vulnerable amid the sustained outflows from local stocks and expectations of a stronger Greenback and higher US bond yields after Donald Trump won the US election.

On the other hand, the decline in crude oil prices might help limit the INR’s losses as India is the world's third-largest oil consumer. Additionally, the routine intervention by the Reserve Bank of India (RBI) to sell USD might prevent the INR from significant depreciation in the near term. Traders will keep an eye on India’s October Consumer Price Index (CPI), which is due on Tuesday. On the US docket, the CPI inflation report will be released on Wednesday. 

Daily Digest Market Movers: Indian Rupee trades flat amid multiple headwinds

• Foreign investors have withdrawn more than $1.5 billion from Indian equities so far in November, adding to the $11 billion outflow in October.
• Benchmark Indian equity indexes Nifty 50 and BSE Sensex ended down by 0.2% and 0.1% on Friday, respectively, marking the fifth weekly decline in six weeks. The Nifty is down 8.1% from its record high in late September.
• The Indian CPI inflation is expected to rise to 5.80% YoY in October from 5.49% in September. 
• The preliminary University of Michigan's Consumer Sentiment Index improved to 73.0 in November from 70.5 in October, better than the market expectation of 71.0. This figure is the highest in seven months.  
• Minneapolis Fed President Neel Kashkari said the US economy has remained remarkably strong as the Fed progressed in beating back inflation, but the US central bank was still “not all the way home,” per Bloomberg.

Technical Analysis: USD/INR’s constructive outlook remains in place, eyes on overbought RSI

The Indian Rupee trades on a flat note on the day. The bullish outlook of the USD/INR pair remains in play, with the pair holding above the key 100-day Exponential Moving Average (EMA) on the daily timeframe. However, additional consolidation should not be ruled out before positioning for any short-term USD/INR appreciation as the 14-day Relative Strength Index (RSI) is over the midline near 77.75, indicating an overbought condition.

A sustained buying momentum could take USD/INR to the next upside barrier at 84.50. Further north, the next hurdle emerges at the 85.00 psychological level.

On the downside, a move below the lower limit of the trend channel and the high of October 11 in the 84.05-84.10 zone could pave the way for a selloff to 83.83, the 100-day EMA. The additional downside level to watch is 83.46, the low of September 24. 

• The Australian Dollar faced downward pressure from concerns over Trump’s tariffs on Chinese goods.
• The AUD faced challenges as China's latest stimulus measures fell short of investors’ expectations.
• Trump’s fiscal policies could heighten inflation risks, prompting the Fed to adopt a more restrictive policy stance.

The Australian Dollar (AUD) gains ground on Monday despite a generally negative outlook driven by concerns over Donald Trump’s proposed tariff increases on Chinese goods, which could impact Australian markets, one of China's largest trading partners. US markets will be closed for the Veteran’s Day Bank Holiday.

The AUD also faced potential downward pressure from lower-than-expected Chinese Consumer Price Index (CPI) data released on Saturday. Additionally, China's latest stimulus measures fell short of investor expectations, further dampening demand prospects for Australia’s largest trading partner and weighing on the Australian Dollar.

On Friday, China announced a 10 trillion Yuan debt package designed to alleviate local government financing pressures and support struggling economic growth. However, the package stopped short of implementing direct economic stimulus measures.

Australia's 10-year government bond yield dropped to around 4.6%, reflecting a decline in US bond yields following the Federal Reserve's widely anticipated 25 basis point interest rate cut. Last week, the Reserve Bank of Australia (RBA) kept its interest rate unchanged at 4.35%. The central bank emphasized that underlying inflation remains too high and is not expected to return to its target until 2026.

Daily Digest Market Movers: Australian Dollar faces challenges due to potential Trump’s tariff

• Federal Reserve Bank of Minneapolis President Neel Kashkari stated on Sunday that the US economy has shown remarkable resilience as the Fed continues its efforts to curb inflation. However, Kashkari noted that the Fed is still “not all the way home.” He also mentioned that the Fed aims to be confident that inflation will fully return to the 2% target and needs additional evidence before considering another rate cut.
• Morgan Stanley divides the Trump administration's macroeconomic policies into three key areas: tariffs, immigration, and fiscal measures. The report predicts that tariff policies will be prioritized, with an anticipated immediate imposition of 10% tariffs globally and 60% tariffs specifically on China.
• Analysts suggest that if Trump’s fiscal policies are implemented, they could lead to higher investment, spending, and labor demand, elevating inflation risks. This could prompt the Fed to adopt a more restrictive monetary policy, potentially strengthening the US Dollar and putting additional pressure on the AUD/USD pair.
• However, Fed Chair Jerome Powell stated on Thursday that he doesn’t anticipate Trump’s potential return to the White House impacting the Fed’s near-term policy decisions. “We don’t guess, speculate, and we don’t assume what future government policy choices will be,” Powell noted after the bank decided to lower interest rates by 25 basis points to a range of 4.50%-4.75%, as expected.
• Fed Chair Jerome Powell also emphasized that the Fed will continue to assess economic data to decide on the "pace and destination" of future rate changes, highlighting that inflation has been gradually slowing toward the Fed's 2% target.
• China’s Consumer Price Index (CPI) rose 0.3% year-over-year in October, slightly below market expectations and down from September’s 0.4%. This marks the ninth consecutive month of consumer price inflation but represents the lowest rate since June. Month-over-month, the CPI dropped by 0.3%, a sharper decline than the expected 0.1% decrease, following a flat reading in September.
• On Friday, the preliminary University of Michigan Consumer Sentiment Index rose to 73.0 in November, up from 70.5 in October and exceeding the market’s expectation of 71.0.
• US Initial Jobless Claims rose to 221,000 for the week ending November 1, according to a Thursday report from the US Department of Labor (DoL). This figure aligned with initial estimates and was up from the previous week’s revised total of 218,000 (originally reported as 216,000).

Technical Analysis: Australian Dollar trades below 0.6600, nine-day EMA

The AUD/USD pair trades around 0.6590 on Monday. Daily chart analysis indicated short-term downward pressure as the pair is positioned below the nine-day Exponential Moving Average (EMA). Additionally, the 14-day Relative Strength Index (RSI) has broken below the 50 mark, further suggesting that a bearish sentiment is prevailing.

In terms of support, the AUD/USD pair may approach its three-month low at 0.6512, which was recorded on November 6, followed by key psychological support at 0.6500.

On the upside, the immediate resistance appears at the nine-day EMA at 0.6604, followed by the 14-day EMA at 0.6616. A breakthrough above these EMAs could lead the AUD/USD pair to revisit its recent high at 0.6687 level, followed by the psychological level of 0.6700.

AUD/USD: Daily Chart

• NZD/USD gains traction to near 0.5965 in Monday’s Asian session. 
• RBNZ two-year inflation expectations increase to 2.12% QoQ in Q4.
• Trump trades might lift the USD and cap the upside for NZD/USD. 

The NZD/USD pair rebounds to around 0.5965 on Monday during the Asian trading hours. The pair edges higher after an uptick in the Reserve Bank of New Zealand’s (RBNZ) inflation expectations. However, the renewed Greenback demand due to the return of Donald Trump to the White House might drag NZD/USD lower. The attention will shift to the US October Consumer Price Index (CPI), which is due on Wednesday. 

New Zealand’s two-year inflation expectations, seen as the time frame when RBNZ policy action will filter through to prices, increased slightly to 2.12% in Q4 from 2.03% recorded in Q3, according to the Reserve Bank of New Zealand’s (RBNZ) latest monetary conditions survey on Monday. Meanwhile, the NZ average one-year inflation expectations dropped to 2.05% in Q4 versus 2.40% prior. The New Zealand Dollar (NZD) attracts some buyers in the immediate reaction to the uptick in inflation expectations.

Nonetheless, analysts expect the US Dollar (USD) to continue its rally against its rivals as Trump’s plans might raise inflationary pressures and would lower the chances of sustained US Federal Reserve (Fed) rate cuts next year. "A Trump administration likely means more spending, a hotter economy, and high bars for international trade—all things that spell strength for the dollar," noted Helen Given, associate director of trading at Monex USA.

Additionally, the stronger US economic data continue to underpin the USD. The US consumer sentiment reached a seven-month peak in early November, as the University of Michigan’s Consumer Sentiment Index jumped to 73.0 from 70.5 in October. This figure beat the estimation of 71.0 and registered the highest reading since April. 

 

• The Japanese Yen weakened after the BoJ summary showed that policymakers were divided on rate hike timing. 
• Japan's Prime Minister Ishiba faces a leadership vote, which adds another layer of uncertainty and weighs on the JPY.
• The Trump optimism continues to underpin the USD and further contributes to the USD/JPY pair’s move up. 

The Japanese Yen (JPY) drifted lower against its American counterpart during the Asian session on Monday after the Bank of Japan (BoJ) Summary of Opinions from the October meeting showed that policymakers were divided on rate hike timing. This comes on top of the domestic political landscape, which is expected to make it difficult for the BoJ to tighten its monetary policy further and undermine the JPY. Apart from this, the prevalent risk-on environment and fear that US President-elect Donald Trump might again hit Japan with protectionist trade measures further dent demand for the safe-haven JPY. 

Meanwhile, expectations that Trump's policies would boost inflation and restrict the Federal Reserve's (Fed) ability to ease policy aggressively act as a tailwind for the US Dollar (USD). This, in turn, is seen as another factor lending support to the USD/JPY pair. That said, the recent verbal intervention by Japanese authorities might hold back the JPY bears from placing aggressive bets and cap gains for the currency pair. Investors might also prefer to move to the sidelines ahead of this week's important US macro releases, including the latest consumer inflation figures, and Fed Chair Jerome Powell's scheduled speech. 

Japanese Yen is pressured by domestic political uncertainty and doubts over further BoJ rate hikes

• The Summary of Opinions from the Bank of Japan's October 30-31 meeting revealed that members discussed the potential impact of changes in the US economy and policies as the central bank moves toward further interest rate increases.
• Japan's Prime Minister Ishiba faces a leadership vote in parliament today after the ruling Liberal Democratic Party (LDP) lost its lower house majority held since 2012 and might now be looking to form a government with the support of minor parties.
• Meanwhile, the prospect of a fragile minority government in Japan raises doubts about the BoJ's ability to hike interest rates further, which, along with the upbeat market mood, undermines the safe-haven Japanese Yen at the start of a new week.
• The US Dollar is seen consolidating its recent strong gains and remains well within the striking distance of a four-month high touched in the euphoric market reaction to Donald Trump's victory in the US presidential election last Wednesday. 
• Federal Reserve Bank of Minneapolis President Neel Kashkari said that the central bank wants to have confidence and needs to see more evidence that inflation will return to the 2% target before deciding on another interest rate cut.
• Investors now look to this week's release of the US consumer inflation figures on Wednesday and the US Producer Price Index (PPI) on Thursday, which will be followed by the prelim Q3 GDP print from Japan and US Retail Sales figures on Friday. 
• Apart from this, speeches by influential FOMC members, including Fed Chair Jerome Powell on Friday, will play a key role in influencing the USD price dynamics and determining the next leg of a directional move for the currency pair. 

Technical Outlook: USD/JPY seems poised to appreciate further while above the 200-day SMA

The USD/JPY pair, so far, has managed to hold above the very important 200-day Simple Moving Average (SMA) resistance breakpoint, which should act as a key pivotal point. This, along with positive oscillators on the daily chart, suggests that the path of least resistance for spot prices is to the upside. Any further move-up, however, is likely to confront some resistance ahead of the mid-153.00s. A sustained strength beyond could be seen as a fresh trigger for bulls and pave the way for a move towards reclaiming the 154.00 mark en route to the 154.70 area, or the multi-month top touched last week.

On the flip side, the Asian session low, around the 152.60 area, now seems to protect the immediate downside. Some follow-through selling could drag the USD/JPY pair below the 152.00 round figure, towards the 151.70 region (200-day SMA). A convincing break below the latter will suggest that the recent strong move up from the September low has run out of steam and shift the near-term bias in favor of bearish traders.

New Zealand's (NZ) inflation expectations were a mixed bag on a 12-month and a two-year time frame for the fourth quarter of 2024, the Reserve Bank of New Zealand’s (RBNZ) latest monetary conditions survey showed on Monday.

Two-year inflation expectations, seen as the time frame when RBNZ policy action will filter through to prices, increased slightly to 2.12% in Q4 from 2.03% seen in Q3 2024 of this year.

NZ average one-year inflation expectations extended its decline to 2.05% in Q4 vs. 2.40%  in the third quarter of 2024. 

NZD/USD reaction to inflation expectations

The New Zealand Dollar (NZD) picks up a fresh bid on an uptick in inflation expectations. At press time, NZD/USD is adding 0.07% on the day to trade near 0.5970. 

The People’s Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead on Monday at 7.1786, as compared to Friday's fix of 7.1433 and 7.1813 Reuters estimates.

• EUR/USD remains under pressure as the US Dollar appreciates amid likelihood of Trump increasing import tariffs and reducing corporate taxes.
• Trump’s fiscal policies could heighten inflation risks, potentially prompting the Fed to adopt a more restrictive monetary policy stance.
• German Chancellor Olaf Scholz dissolved the ruling coalition, leading to new elections to restore stability amid political uncertainty.

The EUR/USD pair continues to face downward pressure for a second consecutive session, hovering around 1.0720 during Monday’s Asian trading hours. The pair is weighed down by a stronger US Dollar (USD) and political uncertainties in Germany.

Investors are anticipating a less dovish stance from the Federal Reserve, as Donald Trump is likely to pursue his campaign promises to enact substantial tariffs, including a 10% increase on imports and a reduction in corporate taxes.

Analysts suggest that if Trump’s fiscal policies are implemented, they could lead to higher investment, spending, and labor demand, elevating inflation risks. This could prompt the Fed to adopt a more restrictive monetary policy, potentially strengthening the US Dollar and putting additional pressure on the EUR/USD pair.

However, Fed Chair Jerome Powell stated on Thursday that he doesn’t anticipate Trump’s potential return to the White House impacting the Fed’s near-term policy decisions. “We don’t guess, speculate, and we don’t assume what future government policy choices will be,” Powell noted after the bank decided to lower interest rates by 25 basis points to a range of 4.50%-4.75%, as expected.

On Friday, the preliminary University of Michigan Consumer Sentiment Index rose to 73.0 in November, up from 70.5 in October and exceeding the market’s expectation of 71.0. This upbeat data has broadly strengthened the Greenback.

In Germany, Chancellor Olaf Scholz appointed a new finance minister after dismissing the previous one, effectively dissolving the ruling coalition. This move has prompted calls from opposition and business leaders for new elections to bring stability amid the political uncertainty.

Analysts at Deutsche Bank noted that higher tariffs from the US could strain the Eurozone’s export sector, potentially impacting economic growth. “Uncertainty is high on many levels, from the exact impact of US tariffs to the timing of their implementation to how and when Europe responds,” they stated.

European Central Bank (ECB) Governing Council member Robert Holzmann said on Sunday that a December interest rate cut is a possibility but by no means guaranteed, per Bloomberg. 

Key quotes 

"As things look at the moment, it is possible (that there will be a cut in December). There is nothing at the moment that would argue against that but that does not mean it will automatically happen.”

"We do not have the latest forecasts and data. We will receive those in December. We will decide on that basis, yes or no.”

"It can be assumed that Trump will implement his plans to introduce tariffs - high against China, not quite as high against other parts of the world and Europe, but still significant.” 

Market reaction

At the time of writing, EUR/USD was down 0.03% on the day at 1.0715. 

Federal Reserve Bank of Minneapolis President Neel Kashkari said the US economy has remained remarkably strong as the Fed progressed in beating back inflation, but the US central bank was still “not all the way home,” per Bloomberg. 

Key quotes

Market reaction

The US Dollar Index (DXY) is trading 0.04% higher on the day at 104.98, as of writing.

• GBP/USD remains on the defensive on Monday amid a bullish US Dollar.
• The BoE’s hawkish tilt underpins the GBP and limits losses for the major. 
• Traders look to this week’s UK/US macro releases from a fresh impetus.

The GBP/USD pair kicks off the new week on a softer note, albeit it lacks follow-through selling and remains confined in a range around the 1.2900 mark amid mixed fundamental cues. 

The US Dollar (USD) holds steady below a four-month high touched last week amid expectations that US President-elect Donald Trump's policies would spur inflation and restrict the Federal Reserve's (Fed) ability to ease policy aggressively. This, in turn, is seen as a key factor acting as a headwind for the GBP/USD pair, though the Bank of England's hawkish stance helps limit the downside. 

In fact, the BoE warned that the expansive Autumn Budget introduced by Chancellor Rachel Reeves is expected to fuel inflation, suggesting that it adopt a cautious stance toward rate cuts in 2025. Furthermore, the risk-on mood contributes to capping gains for the safe-haven Greenback and offers some support to the GBP/USD pair, warranting some caution before placing aggressive bearish bets. 

Investors also seem reluctant and might prefer to move to the sidelines ahead of important macro releases from the UK and the US. This week's economic docket features the UK jobs data on Tuesday, the US consumer inflation figures and the Producer Price Index (PPI) on Wednesday and Thursday, respectively, followed by the Prelim Q3 UK GDP and the US Retail Sales on Friday. 

Apart from this, investors will take cues from Fed Chair Jerome Powell and BoE Governor Andrew Bailey's speech on Friday. This, in turn, will determine the next leg of a directional move for the GBP/USD pair. In the meantime, the underlying strong bullish tone surrounding the USD might continue to cap spot prices, suggesting that any attempted move-up could be seen as a selling opportunity.

• Gold price loses ground to around $2,680 in Monday’s early Asian session. 
• The strength of the USD undermines the yellow metal. 
• The uncertainty surrounding global economic uncertainty, geopolitical risks might boost safe-haven flows, benefiting the Gold price. 

Gold price (XAU/USD) trades in negative territory near $2,680 during the early Asian session on Monday. The downtick of the precious metal is pressured by a stronger US Dollar (USD) due to Donald Trump's victory. 

Meanwhile, the US Dollar Index (DXY), an index of the value of the USD measured against a basket of six world currencies, extends its upside to around 105.00, the four-month high. 
 
Trump's victory has fuelled questions about whether the US Federal Reserve (Fed) may proceed to cut rates at a slower and smaller pace. This, in turn, boosts the Greenback and weighs on the USD-denominated Gold price. 

“This rally in the dollar and yields has put pressure on gold, which traditionally falls as real interest rates rise, reflecting reduced demand for safe-haven assets in the short term,” noted Matthew Jones, precious metals analyst at London-based metals trader Solomon Global. “However, from a longer-term, macro perspective, the future is ‘as good as gold,” added Jones. 

The upbeat US economic data on Friday contributes to the USD’s upside. The US Consumer Sentiment Index rose to 73.0 in November from 70.5 in October, according to the preliminary reading by the University of Michigan. This figure came in better than the market expectation of 71.0.

On the other hand, the global economic uncertainty and the ongoing geopolitical tensions in the Middle East might help limit the yellow metal’s losses. Israeli army Chief of Staff Herzi Halevi approved the expansion of the ground invasion of southern Lebanon, state broadcaster Kan reports.  

The Bank of Japan (BoJ) published the Summary of Opinions from its October monetary policy meeting on October 30 and 31, with the key findings noted below.  

Key quotes

Market reaction  

Following the BoJ’s Summary of Opinions, the USD/JPY pair is gaining 0.28% on the day to trade at 152.93, as of writing.