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• The AUD/NZD is grinding it out on Monday, testing into higher ground.
• The Aussie is rebounding on a technical basis after declining most of November.
• Resistance is piled up, bulls face uphill battle.

The AUD/NZD has climbed nearly 0.6% as the Aussie (AUD) rallies against the Kiwi (NZD) following two straight weeks of declines.

Hourly candles have the AUD/NZD running straight into the 200-hour Simple Moving Average (SMA) just south of 1.0860. The pair was constrained by the 50-hou SMA following early November's decline from 1.0900, and now the AUD/NZD finds itself trading into the top end of the constraining pattern between the two moving averages.

Monday's clean break upwards from 1.0780 sees the pair pushing through a descending trendline drawn from November's peak bids near 1.0940, and the challenge for bidders will be to keep the momentum going.

On the daily candlesticks, the AUD/NZD looks set to struggle in the midrange after failing to make a firm downside break of the 200-day SMA, and the long-term trend of the AUD/NZD looks set to remain sideways for the foreseeable future.

AUD/NZD Hourly Chart

AUD/NZD Daily Chart

AUD/NZD Technical Levels

• AUD/USD remains capped below the 0.6400 mark in early Tuesday. 
• The New York Fed’s 1-year and 5-year inflation outlooks eased to 3.57% and 2.72%, respectively.
• The US Consumer Price Index (CPI) will be the highlight on Tuesday. 

The AUD/USD pair recovers some lost ground but remains capped under the 0.6400 psychological mark during the early Asian session on Tuesday. Markets turn cautious ahead of the US Consumer Price Index (CPI), due later on Tuesday. This event could offer hints about the progress of inflation toward its 2% target. At press time, AUD/USD is trading around 0.6375, losing 0.05% on the day.

Meanwhile, the US Dollar Index (DXY), an index of the value of the USD measured against a basket of six world currencies, hovers around 105.65 after retreating from 106.00. The US Treasury bond yields edge lower, with the 10-year yield dropping to 4.63% and the 2-year yield falling to 5.03%.

The New York Fed’s survey of consumer expectations showed the 1-year and 5-year inflation outlooks eased to 3.57% and 2.72%, respectively. Meanwhile, the US government reported a $66 billion budget deficit in October, compared to a deficit of $87 billion during the same month of last year. Tuesday’s spotlight will be the US inflation data. The Consumer Price Index (CPI) is expected to grow by 0.1% in October, and the core inflation measure is estimated to remain at 4.1%. These figures might convince the Federal Reserve (Fed) of additional tightening, as FOMC views are warranted by the data. 

On the Aussie front, Reserve Bank of Australia (RBA) Assistant Governor (Economic) Marion Kohler said that a decline in inflation to be slower than previously thought due to the still-high level of domestic demand and strong labor and other cost pressures. Kohler further stated that a tighter policy to counter high inflation is required. The market anticipates that the RBA will hike additional rates in the first half of next year.

Looking ahead, market players will monitor Australia’s Westpac Consumer Confidence and the National Australia Bank's Business surveys. Also, the US CPI data will be due on Tuesday. Later this week, the Australian Q3 Wage Price Index will be due on Wednesday, and the Australian employment report will be released on Thursday. 

• AUD/JPY records a slight decline of 0.08% in the Asian trading session, currently positioned at 96.68, following a peak at 96.85.
• Technically, AUD/JPY maintains a neutral stance, though surpassing 96.81 could lead the pair towards 97.00.
• Conversely, inability to break above the Tenkan-Sen might trigger selling pressure, with initial support at Monday’s low of 96.18.

AUD/JPY began the Asian session with minuscule losses of 0.08%, as Wall Street’s turned negative towards the end of Monday’s trading session, ahead of the release of the US CPI data. The pair is trading at 96.68 after hitting a weekly high of 96.85.

From a technical standpoint, the AUD/JPY is neutral biased, facing resistance at the Tenkan-Sen level at 96.81. A breach of that area can open the door to test 97.00, followed by the 2023 high of 97.63m before reaching the 98.00 mark.

On the other hand, failure to conquer the Tenkan-Sen could expose the pair to some selling pressure, with bears targeting Monday’s low of 96.18. Up next would be the psychological 96.00 figure, followed by the Kijun-Sen at 95.83, and the top of the Ichimoku Cloud (Kumo) at 95.00.

AUD/JPY Price Analysis – Daily Chart

AUD/JPY Technical Levels

• The USD/JPY climbed a scant twentyish pips on Monday, closes day towards the midrange.
• Yen markets saw a pop into a hefty expiry on JPY options.
• US CPI inflation numbers in the crosshairs for Tuesday.

The USD/JPY plummeted in Monday's intraday trading, skidding into 151.20 before recovering on the day.

Investors initially feared a market operation by the Bank of Japan (BoJ) to intervene on the Yen's behalf, but a large bundle of options expiries proved to be the culprit. $1.2 billion dollars in Yen options hit the deadline during Monday's US trading session, with an additional $2.2 billion in Yen options coming due in the near future.

The options expiry rallied Yen across the board before sending JPY pairs back into familiar bids.

Tuesday sees the US Consumer Price Index (CPI) inflation figures, and markets are forecasting further cooldown on US inflation.

The Headline CPI reading for October is expected to slip from 0.4% to 0.1%, while the Core CPI (CPI less volatile food and energy prices) is expected to hold steady at -0.1%.

USD/JPY Technical Outlook

The Dollar-Yen hit an intraday high of 151.91, just shy of the 152.00 major handle. The pair is just inches away from clearing 2022's high bids of 151.94. A break of this level would see the USD/JPY trading into its highest prices since 1990, a 33-year high.

Intraday action has been catching bounces from technical support at the 50-hour  Simple Moving Average (SMA), and traders will be keeping extra wary of any downside shock towards the 200-hour SMA currently drifting into 150.70.

USD/JPY Hourly Chart

USD/JPY Technical Levels

• The NZD/JPY is seen at 89.15 with 0.15% losses.
• Bulls continue to be on the sidelines after November’s strong start.
• Indicators suggest that the bears are gaining momentum.

The NZD/JPY saw little downward movements on Monday near the 89.15 area as bulls continued consolidating a solid start of the month.

In that sense, according to the daily chart, the NZD/JPY has a neutral to bearish technical outlook, with indicators signalling a short-term pause in the bulls' upward movement as they consolidate after winning more than 3% at the beginning of November. The Relative Strength Index (RSI) exhibits a negative slope above its midline, while the Moving Average Convergence (MACD) presents lower green bars. In the broader context, despite showing a negative outlook in the short-term, the pair is above the 20,100,200-day Simple Moving Average (SMA), suggesting that the bulls are firmly in control of the overall trend.

Zooming in, the four-hour chart shows that the bearish presence is more evident, with the RSI and MACD standing in negative territory. In that sense, the sellers may continue gaining ground as long as the bulls remain asleep. 

Support levels: 89.00, 88.75, 88.30 (100-day SMA).
 Resistance levels: 89.30 (20-day SMA), 89.50, 90.00.

NZD/JPY daily chart

• The EUR/GBP is seeing downside drift ahead of Tuesday's data headliners.
• The Euro is falling back after last week's steady climb.
• Up Next: UK wages & labor, EU labor & GDP.

The EUR/GBP is softening ahead of a key data double-header for both the EU and the UK, with labor, wages, and Gross Domestic Product (GDP) numbers.

The Euro (EUR) is falling back against the Pound Sterling (GBP) heading into the Tuesday market session, declining around 0.4% peak-to-trough on Monday.

UK Average Earnings for the 3rd quarter is expected to decline slightly from 7.8% to 7.7%, while earnings including bonuses is expected to tick downward at a fast pace, from 8.1% to 7.4%.

The UK will also be seeing Employment Change for September, which last showed the UK shed 82 thousand jobs over the month, while Claimant Count Change in October showed an increase in unemployment benefits seekers to the tune of nearly 20.5 thousand.

On the EU side, quarter-on-quarter Employment Change for the 3rd quarter is expected to show a moderate 0.2% gain, while the EU's pan-continental GDP for the quarter is expected to print at a steady reading of -0.1%.

EUR/GBP Technical Outlook

The Euro is falling back into the 200-hour Simple Moving Average (SMA) Against the Pound Sterling, paring back some of the pair's gains from last week.

Monday's decline trims away gains from the swing high into 0.8755, slipping into the bearish side of a rising trendline from last week's low bids near 0.8650.

With the EUR/GBP drifting towards the midrange in the near-term, bidders will be waiting for a downside break of the 0.8700 handle before re-upping positions, while sellers will be considering a trimming below the same level.

EUR/GBP Hourly Chart

EUR/GBP Technical Levels

• EUR/JPY advances for the second consecutive day, trading around 162.27, reflecting a 0.25% rise amid a favorable risk-on market environment.
• The pair shows an upward bias on the daily chart, with a significant resistance level at the August 2008 high of 165.60.
• On the downside, initial support is identified at the Tenkan-Sen level of 160.72, followed by the Senkou Span A at 160.07 and the Kijun-Sen at 159.44.

EUR/JPY continues to advance for the second straight day, gaining traction toward 162.50 in late trading during the North American session, amid a risk-on impulse and despite Japanese authorities' intervention threats. At the time of writing, the EUR/JPY is exchanging hands at 162.27 up 0.25%.

From a daily chart perspective, the EUR/JPY remains upward biased, with the next resistance level emerging at around the August 2008 high of 165.60. A breach of the latter would expose the July 2008 high of 169.97, ahead of challenging the 170.00.

On the opposite flip side, the EUR/JPY first support would be the Tenkan-Sen level at 160.72 before challenging the Senkou Span A at 160.07 and the Kijun-Sen at 159.44.

EUR/JPY Price Analysis – Daily Chart

EUR/JPY Technical Levels

• Silver prices recover, trading at approximately $22.32 an ounce, marking a 0.27% gain after touching five-week lows at $21.88.
• Technical analysis reveals a neutral to downward bias, but a 'hammer' pattern formation on the daily chart suggests potential bullish momentum.
• For a bullish shift, silver needs to surpass the 50-day moving average (DMA) at $22.65, targeting the 200-DMA at $23.25 and the October 20 high at $23.69.

Silver price finds its foot and rises after reaching five-week lows at $21.88 on Monday, and exchanges hands at around $22.32 a troy ounce, late during the North American session, printing gains of 0.27%, at the time of writing.

From a technical standpoint, the grey’s metal is neutral to downward biased, but the daily chart portrays price action is forming a ‘hammer,’ usually a bullish signal, after posting a series of seven successive days registering lower highs and lows, that ended on Monday.

Hence, if XAG/USD would turn bullish, buyers must initially reclaim the 50-day moving average (DMA) at $22.65. A breach of the latter would expose the 200-DMA at $23.25, followed by October 20, the latest cycle high at $23.69. Once cleared, a bullish resumption would be underway.

On the other hand, a drop below the October 13 low of $21.87, would cement a bearish case, with sellers next target being the October 4 swing low of $20.69, followed by the year-to-date (YTD) low of $19.90.

XAG/USD Price Analysis – Daily Chart

XAG/USD Technical Levels

The critical report on Tuesday is the US Consumer Price Index. During the Asian session, the Australian Westpac Consumer Confidence Index and the National Australia Bank's Business Survey are due. Later in the day, the UK will report jobs data, Switzerland will release wholesale inflation data, and the Eurozone will publish Q3 GDP and employment numbers.

Here is what you need to know on Tuesday, November 14:

The US Dollar Index (DXY) fell for the second consecutive day, extending its retreat from the 106.00 area to 105.60. The decline in the Greenback was influenced by lower US Treasury yields and higher commodity prices. The 10-year yield dropped to 4.62%, while the 2-year yield fell to 5.02%.

Market attention is focused on US inflation data scheduled for release on Tuesday. The Consumer Price Index (CPI) is expected to rise by 0.1% in October, with the annual rate slowing from 3.7% in September to 3.36% in October. The core annual rate is forecasted to remain at 4.1%. If the numbers align with expectations, it would reinforce the market's belief that the Federal Reserve has finished raising interest rates.

US CPI Preview: Forecasts from seven major banks, still to the high side of the Fed's target

The EUR/USD held above 1.0650 and climbed to the 1.0700 area, exhibiting sideways movement in the short-term. Eurostat is set to release employment and growth data from the third quarter. Also due is the ZEW survey for November.

The GBP/USD had a bullish bias throughout the day and rose to 1.2280 after staying above the 20-day Simple Moving Average (SMA). The UK will report employment data on Tuesday, including Average Earnings.

The USD/CHF reached weekly highs before retracing towards 0.9000. Switzerland's wholesale inflation data is due on Tuesday, and Swiss National Bank (SNB) Chairman Thomas Jordan is scheduled to deliver a speech.

After a five-day decline, the AUD/USD rose, finding support above 0.6330 and approaching 0.6400. On Tuesday, the Westpac Consumer Confidence and the National Australia Bank's Business surveys will be released. The key report of the week will be the employment figures on Thursday. The Q3 Wage Price Index will be relevant on Wednesday.

The NZD/USD found support around the 0.5865 area at the 20-day SMA and rebounded, but could not reclaim 0.5900. Stats NZ will publish the Food Price Index and will begin releasing other monthly price indexes.

The USD/CAD ended the day flat, hovering around 1.3800. The pair remains sideways without clear signals.

• West Texas Intermediate (WTI) crude oil sees an uptick, buoyed by OPEC+'s revised demand outlook and production shifts.
• OPEC+ report indicates an increase in oil production, particularly from Iran, Angola, and Nigeria, countering concerns over a slowing Chinese economy.
• US Energy Information Administration (EIA) forecasts that a slight decrease in US oil production and Fed hawkish remarks could dent Oil’s demand.

West Texas Intermediate (WTI), the US Crude Oil benchmark, advances more than 1% on Monday, courtesy of an upward revised outlook for Oil’s demand, OPEC+ reported, easing off worries that a global economic outlook could influence prices, amongst less demand woes. WTI is trading at $78.18.

West Texas Intermediate benefits from OPEC+'s optimistic demand forecast and production changes

A report from the Organization of Petroleum Exporting Countries and its allies (OPEC+) upward revised oil production, disregarding fears linked to a weak Chinese economy, which could dent oil demand. OPEC+ added that production rose due to production increases in Iran, Angola, and Nigeria.

On the contrary, a report from the US Energy Information Administration (EIA) said that US oil production would rise slightly less than expected previously, which was blamed on a lower demand. Alongside that, a hawkish stance by the US Federal Reserve (Fed) Chairman Jerome Powell, suggesting that it could raise rates, stroked fears about WTI’s demand outlook.

Another Fed hike could underpin the Greenback (USD), a headwind for US dollar-denominated commodities, which could weigh WTI prices.

Nevertheless, Saudi Arabia and Russia pledge to maintain a 1.3 million barrel cut toward the end of 2023, which would likely keep Oil’s price underpinned and most likely at around current prices.

WTI Price Analysis: Technical outlook

From a technical standpoint, WTI is testing the 200-day moving average  (DMA) at $78.19, which would open the door for further upside, like the $80.00 per barrel barrier. A breach of the latter would expose the November 7 high of $81.01, ahead of challenging the 50-DMA at $82.45. On the flipside, if the 200-DMA holds, a WTI dive toward the November 8 swing low of $74.96 is on the cards.

The US government recorded a $66 billion budget deficit in October. The Treasury Department informed that receipts totalled $403 billion and outlays $469 billion. It compares to a deficit of $87 billion during the same month of last year. 
 

• The USD/SEK declined to a low of 10.825.
• The Swedish CPI from October will be reported on Tuesday and is expected to rise to 6.7% YoY.
• US CPI from October is also due on Tuesday.

The USD/SEK fell sharply on Monday to a daily low of 10.825 and then consolidated around 10.830, showing a daily decline of 0.40%, driven a weakening USD, ahead of the report of both country's Consumer Price Indexes (CPI) readings from October.

On Tuesday, the SCB Statistics from Sweden is expected to report that the Consumer Price Index (CPI) from October rose to 6.7% from its previous 6.5%. In that sense, if the reading comes in higher than expected, it may fuel further downside on the pair on the back of hawkish bets on the Riksbank, which left the door open for further tightening.

On the other hand, markets await the US CPI on Tuesday and Producer Price Index (PPI) and Retail Sales figures on Wednesday, which will provide the Federal Reserve (Fed) with fresh evidence on the US inflation outlook. Last week, bank officials and Chair Powell were seen as cautious and stated that the "job wasn’t done", pointing out that they’ll need more evidence to confirm that inflation is coming down. For the upcoming December meeting, markets seem to be confident that the Fed won’t hike, and the USD’s trajectory will likely be set on how long investors will price in rates at restrictive levels based on the outcome of the incoming data.

USD/SEK levels to watch

Based on the daily chart, the USD/SEK holds a bearish bias, with indicators reflecting that the bears are strengthening. The Relative Strength Index (RSI) reveals a downward slope below its middle point, while the Moving Average Convergence (MACD) histogram presents larger red bars.  On the broader scale, the pair is also below the 20 and 100-day Simple Moving Averages (SMAs), but above the 200-day SMA, suggesting that the bulls continue to exhibit strength in the overall trend but are seen as weak on the shorter time frames. 

Supports: 10.830, 10.770, 10.760
Resistances: 10.862 (100-day SMA), 10.900, 10.980.

USD/SEK daily chart

• The GBP/USD is seeing some minor lift ahead of Tuesday's bumper data reading.
• An easy Monday to give way to a bumper economic calendar data docket.
• UK wages & labor, US CPI in the barrel.

The GBP/USD climbed to a Monday high near 1.2280 as markets jockey for position ahead of Tuesday's bumper data prints, with UK wages and labor data hitting markets in the early London session before US Consumer Price Index (CPI) inflation figures drop on investors in the mid-day.

UK Average Earnings (excluding bonuses) for the 3rd quarter is expected to moderate, with the forecast expected to tick down from 7.8% to 7.7%; meanwhile, earnings with bonuses factored in is expected to accelerate towards the low end, forecast to drop from 8.1% to 7.4%.

Investors will be hoping for improvement (or at least a lack of downside) in UK Employment and Claimant Count figures. The UK last saw the labor landscape contract in September, showing a 82 thousand job decline in employed persons, while unemployment benefits seekers increased by almost 20.5 thousand.

US CPI Preview: Forecasts from seven major banks, still to the high side of the Fed’s target

US CPI inflation is broadly expected to hold steady at the annualized level with slight declines in the month-on-month figures. Headline US CPI for the year into October is expected to decline from 3.7% to 3.3%.

Monthly CPI inflation is expected to print at a moderate 0.1% in October compared to September's 0.4%.

GBP/USD Technical Outlook

The Pound Sterling's soft bounce on Monday is continuing last Friday's rebound from a weekly low near 1.2190, breaking through a descending intraday trendline from last week's peak near 1.2425.

The pair is drifting back up into the 200-hour Simple Moving Average (SMA), currently grinding upwards through 1.2260.

The pair is currently setting up a near-term technical support zone near 1.2240, and as long as the low side continues to hold, the topside will be free to crash against the technical resistance barrier baked into the 1.2300 handle.

GBP/USD Hourly Chart

GBP/USD Technical Levels

• Gold prices (XAU/USD) see a modest increase of 0.30%, trading at $1944.95, influenced by the weakening US Dollar and declining US Treasury bond yields.
• The market's focus is on the upcoming US Consumer Price Index (CPI) release, with expectations of a slight cooling in inflation rates
• Gold traders are also paying attention to upcoming speeches from Federal Reserve officials.

Gold price encounters some buyers and rises some 0.30% on Monday, late in the New York session, amidst overall US Dollar (USD) weakness, sponsored by a drop in US Treasury bond yields. Therefore, XAU/USD is trading at $1944.95 after hitting a daily low of $1928.10.

XAU/USD gains as market eyes upcoming US inflation data and geopolitical developments

A scarce economic docket in the United States (US), witnessed the majority of traders looking for the release of the Consumer Price Index (CPI) in the US. Before that, a poll from the New York Fed showed that inflation expectations for one year are cooling, while prices in October are expected to drop from 3.7% to 3.3% YoY, revealed forecasts. Core CPI is estimated to lie at 4.1%, unchanged to previously recorded data.

In the meantime, geopolitical risks remain abated according to the market reaction, even though fighting in the Gaza Strip between Israel and Hamas continues. However, an escalation of the conflict remains and could be bullish for the yellow metal.

In the meantime, Gold traders will get some cues from Federal Reserve speakers during the week. On Monday, Governor Lisa Cook failed to provide any headlines in regard to monetary policy, but Tuesday´s agenda would be led by Fed Vice-Chairman Philip Jefferson, John Williams from the New York Fed, and Lisa Cook.

On Wednesday, US President Joe Biden and his Chinese counterpart, President Xi Jinping, will meet at the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco. Remarks are expected regarding military cooperation.

XAU/USD Price Analysis: Technical outlook

XAU/USD is neutral to upward biased; it dipped to a daily low of $1928.10 on Monday, though it resumed its uptrend with buyers eyeing the 20-day moving average (DMA) at $1970.81. On its way toward the latter, buyers must reclaim $1950, followed by the 20-DMA and the $2000 mark. On the other hand, Gold could shift bearish if it drops below key support levels, like the 200-DMA, 100-DMA, and 50-DMA, each at $1935.45, $1927.23, and $1923.11, respectively.

• The DXY index declines to 105.60, still consolidating last week’s gain.
• US October’s headline CPI is expected to have decelerated, and the core measure remains stagnant.
• The economic docket features no relevant high-tier reports on Monday.

The US Dollar (USD) slides on Monday with the DXY index,  which measures the value of the US Dollar versus a basket of global currencies, falling to 105.60 on the back of declining US bond yields and investors taking profits from last week’s gains. Focus now shifts to Tuesday’s Consumer Price Index (CPI) data from October and Retail Sales figures from the same month on Wednesday.

Even though the United States labor market has started to show signs of weakness, several Federal Reserve (Fed) officials, including Chair Powell, hinted that the work on inflation isn’t done and opened the door for further monetary tightening. In that sense, as the central bank remains data-dependent, high-tier data will shape the decision of the Fed's last meeting in December. For now, according to the CME FedWatch Tool, the odds of a hike are low, near 10%, but swaps markets seem to be delaying interest rate cuts from May to June.

Daily Digest Market Movers: US Dollar flattens, consolidating weekly gains

• The US Dollar Index stands around 105.60 for a 0.20% loss.
• Markets await next week’s Consumer Price Index (CPI) figures from October in the US.
• Headline CPI is expected to decline to 3.3% YoY, while the core measure is forecasted to remain at 4.1% YoY.
• Retail Sales are expected to have contracted by 0.3% in October.
• US Treasury yields have edged higer on Monday, while the 2-year rate declined to 5.04%.
• According to the CME FedWatch Tool, the odds of a 25-basis-point hike in December are extremely low, below 10%. 

Technical Analysis: US Dollar consolidates as bulls take a breath

The daily chart suggests that the DXY Index holds a neutral to bullish technical bias as charts show a brief consolidation period, indicating that the bulls are catching their breath after a gaining week. The Relative Strength Index (RSI) indicates a neutral stance below its midline, displaying a flat slope in negative territory, while the Moving Average Convergence (MACD) displays neutral red bars.

Evaluating the broader scale technical outlook, the pair is below the 20-day Simple Moving Average (SMA) but above the 100 and 200-day SMAs, suggesting that the bulls are in control on the broader time horizon but still need to put in extra effort to assert dominance in the short run. 

Support levels: 105.50,105.30, 105.00.
Resistance levels: 106.00, 106.05 (20-day SMA), 106.30.

• The EUR/USD is cycling, looking for gains ahead of Tuesday's data dump.
• Monday action remains thin, with little on the economic calendar.
• Markets hoping for a flat EU GDP reading, US CPI expected to decline slightly.

The EUR/USD is drifting in light Monday trading ahead of Tuesday's headline data drop featuring EU Gross Domestic Product (GDPO) and US Consumer Price Index (CPI) inflation figures.

The Euro (EUR) ground to an intraday low of 1.0665 before catching a mild rebound into 1.0705 as the pair bounces around familiar levels.

Markets are thin for a relaxed Monday with little of note on the economic calendar, and investors are welcoming the breather before the economic calendar turns hectic this week.

US CPI Preview: Forecasts from seven major banks, still to the high side of the Fed’s target

EU GDP for the 3rd quarter is broadly expected to hold steady at previous readings, with the headline growth measure forecast to print at -0.1%. Decelerating economic growth is expected to be highlighted with the annualized growth figure forecast at 0.1%.

On the US inflation side, headline monthly CPI is expected to decline to 0.1% for October compared to September's 0.4%, and Core CPI (headline CPI less volatile food and energy prices) is forecast to print steady at 0.3% for the same period.

EUR/USD Technical Outlook

The Euro is seeing a near-term rejection from a descending intraday trendline from last week's early peak near 1.0755, and near-term action is seeing technical support from the 1.0670 region.

Hourly candles are seeing further support from the 200-hour Simple Moving Average (SMA) currently rising into 1.0675, and further downside set to see challenges from early November's swing low into 1.0520.

EUR/USD Hourly Chart

EUR/USD Technical Levels

• The GBP/JPY is trading into the high side for Monday.
• Yen options expiries fueled a spike across Yen pairs, but moves proved short-lived.
• UK, Japan data due rounding the corner into the mid-week.

The GBP/JPY is trading back into recent highs after a spike in Yen rates fueled by Yen-based options expiries failed to generate meaningful moves.

Large blocks of Yen options expiries hit markets, sending JPY-based pairs tumbling on reaction, but technical impacts quickly evaporated and pair are now trading back into the top side.

Japanese Finance Minister Shunichi Suzuki hit markets earlier in the day with constantly-reiterated warnings that the Japanese government is "watching currency markets closely", an oft-lofted threat that has essentially become background noise for investors.

UK wages and labor figures are due Tuesday, with Japanese Gross Domestic Product numbers slated for early Wednesday.

UK Average Earnings are expected to slip from 7.8% to 7.7% for the 3rd quarter ending September, while Japan's 3rd quarter GDP is forecast to return to declines, expected to print at -0.1% compared to the 2nd quarter's 1.2% growth.

GBP/JPY Technical Outlook

Monday's options-fueled spike saw the GBP/JPY touch into the 50-hour Simple Moving Average (SMA) near 185.25, but a lack of momentum has the Guppy trading right back into near-term highs at the 186.00 handle.

Near-term chart action remains well-supported by the 200-hour SMA currently rising into 184.75, with a technical floor from a rejection level at 184.65.

Further topside will see the Guppy set to challenge three-month highs near 186.77.

GBP/JPY Hourly Chart

GBP/JPY Technical Levels

• USD/JPY experienced a significant drop, losing 67 pips rapidly, before stabilizing around 151.52, slightly up by 0.03%.
• Japanese Producer Price Index data showed a contraction, justifying the Bank of Japan’s ultra-loose policy.
• Traders are now focusing on the US CPI data release on Tuesday, which is expected to show a slight moderation in inflation rates.

The USD/JPY paired some of its earlier losses after plunging 67 pips in the last hour to a daily low of 151.20 amid the lack of news and reiterating comments of Japanese authorities that FX moves are undesirable and reflect fundamentals. At the time of writing, the USD/JPY hovers at around 151.52, gaining some 0.03%.

USD/JPY sees a sharp but brief drop, recovers as market digests US inflation expectations and Japanese economic data

The US economic docket released the New York Fed Inflation Expectations survey, with data showing American households estimating inflation for one year at 3.6% in October, below last month’s 3.7%, while for a five-year, dipped to 2.7% from 2.8%. After the data, the US Dollar Index (DXY), a gauge of the buck’s value against a basket of six peers, dropped from 105.77 to 105.69, while Wall Street pares some of its earlier losses.

Federal Reserve Governor Lisa Cook crossed the newswires but failed to provide any monetary policy hints. USD/JPY traders brace for Tuesday's November 14 release of inflation figures, with traders expecting the Consumer Price Index (CPI) at 3.3% YoY from a previous 3.7%, and core CPI at 4.1%, from 4.1%.

Meanwhile, the USD/JPY plunged from around 151.88 daily high toward 151.20 at around 15:01 GMT, with the move halting at around 15:07 GMT at 151.20 as buyers entered the markets, lifting the exchange rate towards the current spot price.

During the Asian session, Japanese data showed that the Producer Price Index contracted 0.4% MoM in October, below estimates of a 0% reading and September’s 0.2% shrinkage. Annually-based data dipped to 0.8% from 2.2% in September.

Following the data, Japan Finance Minister Suzuki said that “sudden Forex moves are undesirable,” adding that “should be determined by fundamentals.”

USD/JPY Price Analysis: Technical outlook

Following a probable intervention, the USD/JPY is forming a ‘spinning top,’ and a ‘double top’ chart pattern could be emerging, though a break of the latest cycle low, seen at 149.18, is crucial to pave the way for a pullback. For that outcome, sellers must step in and drag prices below the Tenkan-Sen at 150.55, followed by the Senkou-Span A and the Kijun-Sen, each at 150.25 and 150.00, respectively. Once cleated, up next would be the 149.00 figure and the November 3 cycle low at 149.18.

• The Canadian Dollar is adrift on a thin market at the start of the trading week.
• Canada’s Remembrance Day holiday has most provinces out of the office for Monday.
• The economic calendar is sparse this week, little Canadian data on offer.

The Canadian Dollar (CAD) is finding little momentum in thin holiday markets, with the majority of Canadian provinces and territories taking the day off in observance of Remembrance Day.

There’s little of note on the economic data docket for the CAD this week, and the Loonie will be at the whim of overall market sentiment as the trading week unwinds.

Daily Digest Market Movers: Canadian Dollar shifting around a base of thin bids for Monday

• Monday momentum is limited, capping momentum in either direction to kick off the early trading week.
• There is a notable lack of viable economic data on offer for CAD traders this week.
• Loonie to trade according to market flows with a hefty US data schedule slated for this week.
• Early Tuesday will see Bank of Canada (BoC) Deputy Governor Toni Gravelle deliver talking points while participating in a panel discussion labeled  "Challenges for Financial Stability and Financial Regulation amid Heightened Uncertainty".
• BoC Dep Gov Gravelle is participating in the Third High-Level Conference on Global Risk, Uncertainty, and Volatility, in Zurich, Switzerland.
• The BoC’s Council Member is not expected to move markets much, but investors will want to keep an eye out.

Technical Analysis: Canadian Dollar sees thin action for Monday, US Dollar in the driver’s seat

The CAD is seeing thin markets on Monday as it trades against the US Dollar (USD), and shifting sand beneath the Greenback is sending the USD/CAD pair down below the 1.3800 handle for Monday. Thin markets are set to keep the Loonie-Dollar pair constrained for the early part of the week’s trading session.

The USD/CAD is struggling to maintain bullish momentum following last week’s rebound from the 50-day Simple Moving Average (SMA) near 1.3630. A continuation of downside moves will see last Friday’s rejection from 1.3850 firm up into a technical ceiling below November’s early high bids near 1.3900.

On the downside, a bearish extension will see challenges from the 200-day SMA currently pushing upward through 1.3500. A lack of recent directional momentum is seeing technical indicators begin to drift toward the middle, with the Relative Strength Index (RSI) currently heading into the 50.0 median barrier.

USD/CAD Daily Chart

• The AUD/USD jumped to 0.6375, seeing 0.30% gains
• The US will report US CPI figures from October on Tuesday.
• The Australian Consumer Confidence Index from November is also due on Tuesday.

The AUD/USD gathered momentum on Monday, trading at the 0.6375 level, with 0.30% gains, and the pair's price dynamics were set by a soft US Dollar, which seems to be consolidating last week’s gains.

After the Federal Reserve’s hawkish rhetoric gained relevance last week, the Greenback recovered, and now investors are awaiting inflation figures from October to continue placing bets on the next Fed decisions. The Consumer Price Index (CPI) from the US, is expected to have declined to 3.3% YoY from the previous 3.7%, while the Core measure is expected to have stagnated at 4.1% YoY. 

It is worth noticing that Fed officials were seen as not satisfied with the progress made on inflation and claimed to need further evidence to declare that the job is done. In that sense, the outcome of the inflation figures may set the pace for the Greenback’s price dynamics for the next sessions as they will model the expectations for the next December meeting of the Fed. Elsewhere, the US government bond yields are rising. The 2-year rate stands at 5.07%, and the 5 and 10-year yields are seen at 4.70% and 4.67%, respectively, which seems to limit the USD's losses. 

AUD/USD levels to watch

The daily chart suggests that the AUD/USD has a neutral to bullish technical bias as the bears step back to consolidate after five consecutive days of losses. The Relative Strength Index (RSI) signals a potential reversal as it exhibits a positive slope below its midline, while the Moving Average Convergence (MACD) presents weaker green bars. 

In the larger context, the pair is above the 20-day Simple Moving Average (SMA), but below the 100 and 200-day SMAs, indicating that the bears are still holding some dominance over the bulls on the broader time horizon. However, the short-term outlook will remain positive if the bulls gather further ground and hold above the 20-day SMA. 

Supports: 0.6373 (20-day SMA), 0.6350, 0.6300
Resistances: 0.6400, 0.6450, 0.6470.

AUD/USD daily chart

• Mexican Peso (MXN) experiences some volatility to start the week, initially rising against the US Dollar (USD) before retreating.
• Banxico's Governor Victoria Rodriguez Ceja's comments on potential rate cuts next year add pressure on the Mexican Peso.
• A risk-off impulse keeps the USD/MXN on positive territory despite overall US Dollar weakness.

Mexican Peso (MXN) loses some ground against the US Dollar (USD) early during the North American session on Monday. The USD/MXN pair reached a low of 17.60 but bounced as buyers regained control, lifting the exchange rate to 17.65, up0.04% on the day.

Mexico's economic docket is empty following last Thursday’s Bank of Mexico – also known as Banxico – decision to hold rates at 11.25% and remove hawkish comments from its statement, which weighed on the Mexican Peso. Nevertheless, the Peso trimmed some losses on Friday, but now, USD/MXN buyers are trying to break the 200-day Simple Moving Average (SMA) at 17.66. On Monday, dovish remarks by Banxico's Governor Victoria Rodriguez Ceja keep the USD/MXN trading with minuscule gains.

Daily digest movers: Mexican Peso remains range bound despite market sentiment shifting sour

• Banxico’s Governor Victoria Rodriguez commented that the easing inflationary outlook could pave the way for discussing possible rate cuts. She said that monetary policy loosening could be gradual but not necessarily imply continuous rate cuts, adding that the board would consider macroeconomic conditions, adopting a data-dependent approach.
• Industrial production in Mexico cooled down, according to data provided by the National Statistics Agency (INEGI) on November 10. The output grew by 3.9% YoY in September, below the 4.4% forecast, trailing August’s 5.2%.
• The latest inflation report in Mexico, published on November 9, showed prices grew by 4.26% YoY in October, below forecasts of 4.28% and prior rate of 4.45%. On a monthly basis, inflation came at 0.39%, slightly above the 0.38% consensus and September’s 0.44%.
• Last Thursday’s hawkish remarks by the US Federal Reserve Chairman Jerome Powell sponsored the USD/MXN a leg up, toward 17.93, before paring some losses.
• Mexico´s economy remains resilient after October’s S&P Global Manufacturing PMI improved to 52.1 from 49.8, and the Gross Domestic Product (GDP) expanded by 3.3% YoY in the third quarter.
• Banxico revised its inflation projections from 3.50% to 3.87% for 2024, which remains above the central bank’s 3.00% target (plus or minus 1%).

Technical Analysis: Mexican Peso remains steady despite Golden Cross surfacing, USD/MXN stays in the green

The USD/MXN remains neutral to upward biased, at a brisk of breaking crucial resistance levels, like the 200-day Simple Moving Average (SMA) at 17.66, followed by the 50-day SMA at 17.70. Once those two levels are breached, the next resistance would emerge at the 20-day SMA at 17.91 before buyers could lift the spot price towards the 18.00 figure.

Conversely, key support levels lie at 17.50, followed by the November 9 low at 17.47 and the 100-day Simple Moving Average (SMA) at 17.33. A loss of the latter will expose the 17.00 psychological level before the pair aims to test the year-to-date (YTD) low of 16.62.

The US Bureau of Labor Statistics (BLS) will release the most important inflation measure, the US Consumer Price Index (CPI) figures, on Tuesday, November 14 at 13:30 GMT. As we get closer to the release time, here are the forecasts by the economists and researchers of seven major banks regarding the upcoming United States inflation print for the month of October.

Headline CPI is set to come out at 0.1% month-on-month in October, a significant retreat from 0.4% in September. The year-on-year number will likely be dragged down from 3.7% to 3.3%. Core CPI is projected to remain at 4.1% YoY and rise by 0.3% MoM, a repeat of last month's increase.

ANZ

TDS

Commerzbank

Deutsche Bank

NBF

CIBC

Wells Fargo

Kit Juckes, Chief Global FX Strategist at Société Générale, analyzes USD outlook ahead of US CPI (Tuesday) and Retail Sales (Wednesday) data.

Weak Retail Sales would support the idea that the consumer’s pile of excess savings is getting run down

Economists at HSBC still expect a slightly weaker AUD against the USD in the months ahead.

Three factor medium-term bearish view for the AUD

USD/CAD is still trading close to its highs for the year. Economists at Commerzbank analyze Loonie’s outlook.

Upward potential in 2024

Kit Juckes, Chief Global FX Strategist at Société Générale, analyzes EUR/USD outlook and how US 10-year yields could impact the pair.

4.5% in US 10s and 1.08 levels in EUR/USD unlikely to be broken today

Economists at UBS expect the US Dollar to remain strong before softening as 2024 progresses.

RBA to keep rates elevated until at least 4Q24

• The New Zealand Dollar trades little changed on Monday as markets tread water.
• Kiwi remains on the back foot after recent Fedspeak resurrected the chances of a rate hike. 
• Hawkish commentary from Fed officials has set the US Dollar trending higher against the Kiwi, NZD/USD declines. 

The New Zealand Dollar (NZD) trades flat amid a muted market mood on Monday. Most traders are waiting for bigger macroeconomic data releases scheduled for Tuesday and Wednesday before taking big positions. 

The short-term technical situation is precarious, however, threatening deeper losses on the horizon as price edges ever closer to breaking below a key support level at 0.5874.

Daily digest market movers: New Zealand Dollar flat on Monday

• The New Zealand Dollar trades little changed at the start of the week as traders look ahead to more significant data releases later in the week. 
• NZD could very well be impacted by Chinese Industrial Production and Retail Sales data on Wednesday morning at 02:00 GMT.
• On Monday, China released figures for New Loans in October, which showed a seasonal slowdown in lending to 738.4B from 2310.0B in September, but still more than the 650.0B expected. It suggests credit remained buoyant during the month. 
• China's M2 Money Supply (YoY), showing the amount of money held in most kinds of bank accounts, ticked down to 10.3% in October, compared to 10.4% previously.  
• Downbeat Chinese inflation data had dampened the outlook for global growth, weighing on NZD last week, because New Zealand is a major commodity exporter – especially of dairy products – to China. 
• NZD fell midweek last week on the back of an inflation report from the RBNZ that showed both one-year-out and two-years-out inflation expectations for New Zealand falling in Q3 compared to the previous quarter.
• The lower inflation expectations imply the RBNZ is less likely to raise interest rates, making the country a less attractive place for global investors to park their capital. 
• Inflation expectations have pushed higher in the US after University of Michigan inflation expectations data, released November 10, showed an uptick to 4.4% in November for inflation expected in the year ahead, compared to 4.2% in October and 3.2% in September. 
• This reflects the more hawkish commentary that has been coming out of the Federal Reserve (Fed) recently, which suggests a greater probability the Fed may still raise interest rates before it is done with its tightening cycle. 
• US Inflation data on Tuesday at 13:30 GMT should shine more light on price rises. A rise of 0.1% MoM and 3.3% YoY is expected for headline inflation in October, whilst core is forecast to increase by 0.3% and 4.1%. 

New Zealand Dollar technical analysis: NZD/USD inches lower, threatening more losses

NZD/USD – the number of US Dollars one New Zealand Dollar can buy – edges lower into the 0.5870s on Monday, reaching a key make-or-break level for trend watchers. 

New Zealand Dollar vs US Dollar: Daily Chart

The pair is a few pips away from breaking below the last major lower high of the previous uptrend, made on November 2, at 0.5874 (visible on the 4-hour chart below), close to the blue 100-4-hour Simple Moving Average (SMA). A break below would probably indicate a short-term bearish trend reversal and deeper losses. 

The next target to the downside would probably be at 0.5862, where the 61.8% Fibonacci retracement of the recovery from the year-to-date lows in late October and early November. The main target, however, sits at 0.5790, then 0.5773. 

New Zealand Dollar vs US Dollar: 4-hour Chart

As long as the November 2 lows stay intact, however, a threat of a recovery and decisive break above the November 3 high at 0.6001 remains, which would reconfirm the short-term bullish bias. The likely target thereafter would be the 0.6055 October high.  

The medium and long-term trends are both still bearish, suggesting the potential for more downside is strong. 

Bulls would have to push above the 0.6055 October high to change the outlook in the medium term and indicate the possibility of the birth of a new uptrend.

Gold prices briefly hit $2,000 after Hamas’ attack on Israel before retreating recently. Economists at ANZ Bank analyze the yellow metal’s outlook.

Central bank Gold purchases to remain strong

• USD/CAD recovers from 1.3800 ahead of the US CPI data.
• Economists projected that the US core CPI grew at a steady pace in October.
•  Fed Powell characterized current interest rates as inadequate to tame price pressures.

The USD/CAD pair rebounds after getting support near 1.3800 ahead of the United States inflation data for October. The Loonie asset recovered amid anxiety as the inflation data would provide further cues about the likely monetary policy action by the Federal Reserve (Fed) in December.

S&P500 futures generated some losses in the London session, portraying a risk-off mood. The US Dollar Index (DXY) is consistently making efforts to break above the immediate resistance of 106.00. 10-year US Treasury yields advance to near 4.66% ahead of US Consumer Price Index (CPI) data.

As per the consensus, the core CPI that excludes volatile food and oil prices grew at a steady pace of 0.3% on a monthly basis. The annual core CPI is also seen to grow by 4.1%. A stubborn US inflation data would elevate risks of further policy-tightening by the Federal Reserve (Fed).

Last week, Fed Chair Jerome Powell characterized current interest rates as inadequate to tame price pressures. Powell said that the Fed will not hesitate to raise interest rates further if inflation remains stubborn.

Meanwhile, the oil price attempts recovery after discovering buying interest near $75.00 as OPEC sees steady demand by China in 2024. It is worth noting that Canada is the leading exporter of oil to the United States and higher oil prices support the Canadian Dollar.

Wide yield differentials have driven USD/JPY to revisit its 2022 high near 152. Economists at TD Securities analyze the pair’s outlook.

FX intervention warnings may prove too little to mark a turnaround in the JPY

Economists at Rabobank analyze GBP outlook against USD and EUR. 

Potential for further downside risks to Cable

- EUR/USD trades in an inconclusive fashion below 1.0700.

- Bouts of selling pressure could revisit 1.0640.

EUR/USD trades in an inconclusive fashion below the 1.0700 mark at the beginning of the week.

If bears regain the initiative, they could initially drag the pair to the interim 55-day SMA, today at 1.0639. The loss of this region could open the door to a probable visit to the weekly low of 1.0495 (October 13) ahead of the 2023 bottom of 1.0448 (October 3).

In the meantime, while below the 200-day SMA at 1.0800, the pair’s outlook should remain negative.

EUR/USD daily chart

Economists at TD Securities do not think the USD is breaking out, and continue to forecast a notable pullback throughout 2024. 

US economy slowing through 2024

• The Greenback retreats a touch and starts the week on the backfoot.
• Traders will keep their powder dry for Wednesday and Thursday.
• The US Dollar Index is expected not to make any big moves with a light Monday calendar. 

The US Dollar (USD) is easing a touch, with the Australian Dollar (AUD/USD) and the Polish Zloty (USD/PLN) as biggest winners against the Greenback. Markets experience a very calm start to the week with traders keeping their powder dry as this Monday holds no important data events whatsoever when it comes to the US macroeconomic agenda. Traders rather will try to assess and preposition towards Thursday and Friday. 

On the economic data front traders will be using today’s empty docket to  assess the uptick in Friday’s University of Michigan expectations regarding the inflation outlook, and assess if the US Consumer Price Index on Wednesday and the Producer Price Index on Thursday will already reflect that assumption of an uptick in inflationary pressures. 

Seeing from the very choppy and nervous price action on Friday on the back of the Michigan numbers, traders are best to brace for a very nervous and volatile week in the Greenback and in the US Dollar Index. 

Daily digest: US Dollar easing ahead of fireworks

• China is weighing unfreezing Boeing 737 orders. 
• European Central Bank Vice-President Luis de Guindos issues says he expects a temporary inflation rebound in the coming months. This falls in line with what US Federal Reserve Chairman Jerome Powell said last week. 
• Reserve Bank of Australia Assistant Governor (Economic) Marion Kohler said that more hikes could be needed in Australia as the RBA rates are not restrictive enough.
• The Pentagon has confirmed that over the weekend it has hit Iran-linked targets in Syria. 
• Equities are still awakening this Monday with the Japanese Topix and Nikkei closing flat. In China the Hang Seng is soaring over 1%, while European and US equities are trading flat for this Monday. 
• The CME Group’s FedWatch Tool shows that markets are pricing in a 91.2% chance that the Federal Reserve will keep interest rates unchanged at its meeting in December. 
• The benchmark 10-year US Treasury yield trades at 4.65%, and is slowly making its way up again. 

US Dollar Index technical analysis: US Dollar wait-and-see

The US Dollar entered a nervous patch on Friday on the back of the University of Michigan inflation expectations survey showed an uptick in inflation expectations. The data confirmed what Fed Chairman Powell was warning about in his most recent statement last week. If the Fed is right and a rise in inflation is noticed this week in both the Consumer Price Index and Producer Price Index numbers, markets might need to factor in another rate hike, which means some more US Dollar strength to come into the DXY. 

The DXY was looking for support near 105.00, and was able to bounce ahead of it earlier last week. Any shock events in global markets could spark a sudden turnaround and favour safe-haven flows into the US Dollar. A rebound first to 105.85 would make sense, a pivotal level from March 2023. A break above could mean a revisit to near 107.00 and recent peaks printed there.

On the downside, 105.10 is still acting as a line in the sand. Once the DXY slides back below that, a big air pocket is opening up with only 104.00 as the first big level, where the 100-day Simple Moving Average (SMA) can bring some support. Just beneath that, near 103.50, the 200-day SMA should provide similar underpinning. 

-  DXY navigates within a tight range still below 106.00.

-  Further upside momentum should challenge the 106.00 barrier.

DXY looks to extend further last week’s rebound, although the 106.00 region proves to be quite a strong barrier for the time being.

Once the 106.00 hurdle is cleared, the index could then embark on a potential test of the November peak at 107.11 (November 1) ahead of the 2023 high of 107.34 (October 3).

In the meantime, while above the key 200-day SMA, today at 103.60, the outlook for the index is expected to remain constructive.

DXY daily chart

The European Central Bank (ECB) Governing Council member Martins Kazaks said on Monday, it is ‘too soon to say that terminal rate has been reached.”

Further comments

Market reaction

 EUR/USD is holding lower ground near 1.0675, shrugging off the upbeat remarks from the ECB official.

In its monthly oil market report, the Organization of the Petroleum Exporting Countries (OPEC) kept the “2024 world oil demand growth forecast unchanged at 2.25 mbpd.”

Additionally takeaways

Market reaction

WTI has come under renewed selling pressure following the above report, testing lows near $77.0, The US oil is down 0.08% on the day.

Sterling eased a little on Friday. Economists at Commerzbank analyze GBP outlook.

Things are likely to remain volatile for Sterling

• EUR/JPY climbs to new YTD peaks past 162.00.
• Further gains remain on the cards in the near term.

EUR/JPY manages to clear the 162.00 hurdle and print fresh 2023 tops at the beginning of the week.

Further upside appears well on the cards for the cross in the short-term horizon. Against that, the surpass of the 2023 high of 162.36 (November 9) is expected to face the next significant resistance level not before the 2008 top of 169.96 (July 23).

Bolstering the above, the daily RSI approaches the 68 level, still leaving some room for the continuation of the uptrend before entering the overbought territory.

So far, the longer term positive outlook for the cross appears favoured while above the 200-day SMA, today at 152.23.

EUR/JPY daily chart

Economists at the Bank of Montreal analyze the outlook for North American currencies – CAD and USD.

Not particularly bearish on the CAD at present

• WTI Oil has fallen to a four-month-low. 
• The US Dollar is in a wait-and-see pattern ahead of US inflation numbers. 
• Oil could enter a volatile patch with the release of the monthly OPEC report ahead of the November 26 meeting. 

Oil prices have already contracted 20% after briefly hitting $94 at the end of September. Oil prices are getting battered as OPEC+ looks unable for now to provide any incentive for the markets to push Oil prices back up. The number of negative headlines on slowing demand in China and other big demand side representatives is too big a catalyst against the small efforts from Russia and Saudi Arabia to limit their supply. 

Meanwhile, The US Dollar (USD) is trading with a small change of heart. Just as markets were starting to prepare for the end of the rate hike cycle from the US Federal Reserve, its Chairman Jerome Powell said in a speech last week that more hikes might still come as the Fed sees a possible uptick in inflationary pressures. That reasoning got confirmed on Friday when the preliminary numbers for November from the University of Michigan revealed an uptick in inflation expectations. 

Crude Oil (WTI) trades at $76.87 per barrel, and Brent Oil trades at $80.96 per barrel at the time of writing. 

Oil news and market movers: markets not scared of extensions

• At around 12:00 GMT this Monday November 13th,, the monthly OPEC report is due to be issued. 
• Azerbaijan produced 480,000 barrels of Oil per day in October 2023, while its output quota under the OPEC+ deal was 684,000 bpd in October. The country fell 204,000 bpd short of the quota, according to S&P Global Commodity Insights.
• Hayyan Abdul Ghani, the Iraqi Oil minister confirmed its commitment to supporting the OPEC+ agreement:
• The minister said an increase in exports of some producing countries, including Iraq, is normal practice and can be influenced by domestic consumption changes, and does not affect production levels agreed by OPEC+.
• The statement was issued in a response to press reports regarding an increase in Iraq’s Oil exports.
• Carsten Fritsch, a leading Oil analyst from Commerzbank said that a Saudi Oil supply-cut extension is more than likely. It could be a possible solution in the quest from OPEC+ to keep Oil prices supported while demand is still sluggish. 

Oil Technical Analysis: OPEC+ not forming a front

Oil prices have sunk substantially as markets clearly have reacted to fading demand from all fronts. Meanwhile the producing countries are not doing enough to halt the decline, which builds momentum for an aggressive move rather later than sooner. Expect to see an OPEC+ meeting at the end of November with in the meantime heightened risk of a further decline in Oil prices.  

On the upside, $80 is the new resistance to watch out for. Should Crude be able to jump higher again, look for $84 (purple line) as the next level to see some selling pressure or profit taking. Should Oil prices be able to consolidate above there, the topside for this fall near $93 could come back into play.

On the downside, traders are seeing a soft floor being formed near $74. That level is acting as the last line of defence before entering $70 and lower. Once entering that area, markets might factor in the risk of a surprise intervention from OPEC+ to jack up Oil prices again. 

US WTI Crude Oil: Daily Chart

Economists at Société Générale analyze USD/ZAR technical outlook after the pair formed a Head and Shoulders pattern last month.

Right shoulder near 19.25 is an important hurdle near term

On Friday, Norwegian inflation data surprised notably on the upside. The data provided strong support for the Krone. Economists at Commerzbank analyze NOK outlook.

Inflation remains stubborn

• Silver price drops to near $22.00 ahead of US inflation data.
• Fed Powell leaned towards raising interest rates further.
• The US inflation report will showcase whether progress in inflation easing towards 2% has slowed.

Silver price (XAG/USD) fell sharply to near $22.00 as Federal Reserve (Fed) Chair Jerome Powell and his teammates leaned towards raising interest rates further to push the monetary policy to a sufficiently restrictive stance.

Jerome Powell commented last week that the central bank won’t hesitate to raise interest rates further to ensure the achievement of price stability. While Fed policymakers Mary Daly and Thomas Barkin remained unsure about raising interest rates.

Meanwhile, uncertainty ahead of the US inflation data for October has kept the Silver price on edge. As per the consensus, the monthly and annual core Consumer Price Index (CPI) is seen expanding at a steady pace of 0.3% and 4.1%, respectively.

The US Dollar consolidates ahead of the inflation data. A slowdown in progress in inflation declining towards 2% would elevate hawkish Fed bets. The US Dollar Index (DXY) struggles to extend upside above the immediate resistance of 106.00. S&P500 futures added some losses in the European session, portraying a risk-off market mood. 10-year US Treasury yields rose to near 4.65%.

Silver technical analysis

Silver price resumes its downside journey after testing the breakdown of the consolidation formed in a range of $22.37-23.70 on a four-hour scale. The near-term demand for the white metal remains downbeat as the asset has dropped below the 200-period Exponential Moving Average (EMA), which trades around $22.70.

The Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates that the bearish momentum has been triggered.

Silver four-hour chart

The Dollar starts the week quietly. Economists at ING analyze USD outlook.

A range-bound week for the Dollar

USD/JPY advances to within striking distance of the October 2022 high of 151.95. Economists at Société Générale analyze the pair’s outlook. 

Only on a  break below 148.80 would there be risk of a larger down move

• EUR/GBP trades back and forth near 0.8730 ahead of UK/Eurozone data.
• The Eurozone economy is seen contracting by 0.1% for the second time in a row.
• UK’s employment data will guide further action in the Pound Sterling.

The EUR/GBP pair trades directionless near 0.8730 as investors await crucial UK/Eurozone data. The cross struggles for action ahead of the Eurozone preliminary Q3 Gross Domestic Product (GDP) data, will demonstrate the impact of higher interest rates on economic activities.

According to the projections, the Eurozone economy registered de-growth by 0.1%. The economic activities in the Q2 were also contracted by 0.1%. The second straight decline in GDP data is characterized as a technical recession in an economy, which will force European Central Bank (ECB) policymakers to lean towards keeping interest rates unchanged in December.

More interest rates from the ECB are less likely but the ‘higher for longer’ interest rates narrative will remain intact. ECB President Christine Lagarde commented on Friday that higher interest rates for a long period would contribute to returning inflation to 2%.

On the Pound Sterling front, fears of an excessive slowdown in the UK economy have escalated as business investment fell significantly in Q3 due to higher interest rates by the Bank of England (BoE) and weak demand in domestic and overseas markets.

Meanwhile, investors await the UK employment data, which will be published at 07:00 GMT on Tuesday. As per the consensus, the Unemployment Rate in the three months ending September is seen unchanged at 4.2%. The Claimant Count Change for October rose by 15K, lower than 20.4K reading from September.

In addition to the UK employment, wage growth data will be keenly watched. Investors should note that stubborn wage growth in the UK economy is a major contributor to persistent price pressures.

Here is what you need to know on Monday, November 13:

Financial markets started the new week in a calm manner, with investors refraining from taking large positions ahead of Tuesday's key macroeconomic data releases. After closing the previous week in positive territory, the US Dollar (USD) Index holds steady slightly below 106.00 on Monday and major currency pairs fluctuate in familiar ranges. 

The UK's Office for National Statistics will release the jobs report in the early European morning on Tuesday. Later in the session, third-quarter Gross Domestic Product (GDP) growth data from the Euro area and October Consumer Price Index (CPI) data from the US will be watched closely by market participants.

Following Friday's indecisive action, EUR/USD registered small losses in the previous week. Early Monday, the pair moves up and down in a narrow band at around 1.0700. Commenting on the policy outlook, European Central Bank (ECB) Vice President Luis de Guindos said on Monday that it is likely that the euro area economy will remain subdued in the short term.

British Prime Minister Rishi Sunak began reshuffling his cabinet on Monday after sacking home secretary Suella Braverman. According to the latest developments, David Cameron will be offered a role by Sunak. The UK's FTSE 100 Index opened higher on Monday and was last seen rising more than 0.7% on the day. Meanwhile, GBP/USD edged higher to the 1.2250 area on improving risk mood.

USD/JPY climbed to its highest level since October 2022 near 152.00 before staging a correction. Japanese Finance Minister Sunichi Suzuki intervened verbally and repeated that sudden forex moves are undesirable and currency rates should be set by markets to reflect fundamentals.

Gold suffered large losses on Thursday and continued to stretch lower on Friday, losing more than 2.5% on a weekly basis. Early Monday, XAU/USD consolidates its losses at around $1,940.

• USD/JPY continues the winning streak on Fed Chair Powell’s hawkish comments.
• Technical indicators suggest bullish momentum to approach the 152.00 major level.
• 21-day EMA could act as the key support on the downside.

USD/JPY continues to move on the upward trajectory, trading around yearly highs at 151.70 during the European session on Monday. The USD/JPY pair eyes a potential ascent toward the major resistance at the psychological level of 152.00. This could materialize if the strength of the US Dollar (USD) gathers momentum, propelled by higher US Treasury bond yields and the hawkish comments from Federal Reserve (Fed) Chair Jerome Powell.

The technical indicators paint an interesting picture for the USD/JPY pair. The 14-day Relative Strength Index (RSI) is positioned above the 50 level, indicating upward support. This signals a bullish momentum and reflects a robust market sentiment. With this, there's potential for the pair to advance toward the next barrier at the support level of 152.50.

Adding to the positive outlook, the Moving Average Convergence Divergence (MACD) line is situated above the centerline and the signal line in the USD/JPY pair. This configuration suggests a stronger momentum and reflects a prevailing confidence in the market.

On the flip side, the USD/JPY pair could meet the support at the 21-day Exponential Moving Average (EMA) at 150.35, followed by the 150.00 psychological level. A decisive break below the latter could push the pair to navigate the area around the 23.6% Fibonacci retracement at 148.40.

USD/JPY: Daily Chart

Gold’s technical chart suggests a break below the $1,930 level could trigger selling, analysts at ANZ Bank report.

Gold to trade in the range of $1,930-$2,000

• Gold price falls on easing geopolitical tensions and hawkish remarks from Fed Powell on interest rates.
• US core inflation is seen growing at a steady pace.
• A slowdown in the progress of taming inflation could elevate hawkish Fed bets.

Gold price (XAU/USD) has fallen to around $1,940 and it is exposed to more downside amid multiple headwinds. The precious metal loses shine due to no significant escalation in Middle East tensions, hawkish messages from Federal Reserve (Fed) Chair Jerome Powell and his colleagues, and uncertainty ahead of the US Consumer Price Index (CPI) data for October, which will be published on Tuesday.

The appeal for Gold diminished significantly after Jerome Powell said he was less confident that the current interest rate policy is sufficiently restrictive to get inflation under control. Further action in the US Dollar, bond markets and the Gold price will be guided by US inflation data, which will dictate whether more interest rate hikes are needed.

Daily Digest Market Movers: Gold price weakens ahead of US inflation data

• Gold price trades inside Friday’s range as investors swing towards the US inflation data for October, which will be released on Tuesday.
• The US consumer inflation is expected to provide cues about the monetary policy action by the Federal Reserve in its last meeting of 2023 in December.
• For October’s inflation data, the headline inflation is seen growing 0.1% on a monthly basis against 0.4% growth in September. The monthly and annual core CPI data expanded at a steady pace of 0.3% and 4.1%, respectively.
• Persistent inflation data may deepen expectations of one more rate hike from the Fed in December, which would raise interest rates to 5.50%-5.75%. Still, markets broadly expect the Fed to keep rates unchanged.
• Last week, Fed Chair Jerome Powell and his colleagues conveyed that their job towards taming inflation is not over yet. Powell is not confident that current interest rates are adequate to tame price pressures. 
• Jerome Powell warned that a failure in getting inflation under control would be the biggest mistake of the central bank. He further said that the central bank will not hesitate to raise interest rates further if needed to ensure the progress in inflation easing towards 2%.
• St. Louis Fed interim President Kathleen O’Neill Paese supported hawkish remarks from Jerome Powell, and said "It would be unwise to suggest that further rate hikes are off the table". Paese emphasized the need to wait for additional economic and inflation figures before contemplating an interest rate increase.
• While San Francisco Fed Bank President Mary Daly and Richmond Fed Bank President Thomas Barkin remained unsure about raising interest rates. Daly commented that it would be too early to declare victory over inflation and echoed the need to raise interest rates further.
• Part of the reason why Fed policymakers are not actively supporting more interest rate hikes is the higher US long-term bond yields, which have significantly contributed in tightening financial conditions further.
• While Fed policymakers lean towards raising interest rates further, investors still see no rate hike in December.
• As per the CME Group Fedwatch tool, traders see a 15% chance of the Fed raising interest rates by 25 basis points (bps) at the December meeting.
• Meanwhile, no significant escalation in the Israel-Palestine war has diminished the appeal for Gold significantly. Israeli Prime Minister Benjamin Netanyahu continues to reject any ceasefire proposal as Hamas denies releasing all hostages.
• The US Dollar Index (DXY) continues to face pressure near 106.00 as investors hope that the Fed could start the rate-cutting cycle in mid-2024.
• Economists at Morgan Stanley projected that the Fed will initiate easing monetary policy from June 2024. These cuts are expected to come in 25 bps declines, eventually bringing the policy rate down to 2.375% by the end of 2025.

Technical Analysis: Gold price corrects to near 50-EMA below $1,940 

Gold price struggles for a direction ahead of the US consumer inflation data for October. The near-term demand for the precious metal remains downbeat due to multiple headwinds. 

On a daily time frame, the correction in Gold price has extended to near the 50-day Exponential Moving Average (EMA), which trades around $1,940.00. Next support for the yellow metal is seen near the 200-day EMA, which hovers near $1,915.00.

Japanese Finance Minister Sunichi Suzuki is out with some verbal intervention, as the Yen sits at yearly highs against the US Dollar at the start of the week on Monday.

Additional quotes

Market reaction

At the time of writing, USD/JPY is trading 0.19% higher on the day at 151.80, shrugging off the jawboning.

European Central Bank (ECB) Vice President Luis de Guindos said on Monday, “central bank will not prejudge further movements in the policy rate.”

Additional quotes

Market reaction

EUR/USD is unfazed by the above comments, still holding just below 1.0700, as of writing.

EUR/USD trades below 1.07. Economists at ING analyze the pair’s outlook.

Bullish call on EUR/USD next year faces some challenges

• USD/MXN gains ground on weaker Greenback despite improved US bond yields.
• Banxico is expected to maintain interest rates at the current level for some time to achieve the 3.0% inflation target.
• US Dollar faces challenges as investors adopt cautious stance on Fed’s interest rates trajectory.

USD/MXN moves upward, attempting to recover the recent losses near 17.6600 during the early European session on Monday. However, the Mexican Peso (MXN) got a boost after the Bank of Mexico’s (Banxico) decision to keep interest rates steady at 11.25% last Thursday. Not only that, but the central bank has also committed to working towards achieving its 3.0% inflation target by the year 2025 by maintaining policy rates at its current level for some time.

Mexico's inflation took a nuanced turn in October, expanding by 4.26% year on year, a bit below the forecasted 4.28%, and notably lower than the previous reading of 4.45%. Monthly inflation for October edged up by 0.38%, slightly below the consensus of 0.39%.

The US Dollar (USD) experiences challenges, hovering around 105.80 at the time of writing. The buck appears unfazed by the hawkish remarks from Federal Reserve (Fed) Chair Jerome Powell at the International Monetary Fund (IMF) event on Thursday. Powell's acknowledgment that current interest rates may not be doing enough to rein in inflation. This has made the investors adopt a cautious stance before making aggressive bets on USD.

The stable US Treasury yields, standing at 4.65% for the 10-year US bond coupon by press time, could add to the support for the USD. Moreover, the downbeat preliminary US Michigan Consumer Sentiment data on Friday indicated a decline to 60.4 in November from the previous readings of 63.8. This might have contributed to the pressure on the Greenback.

Market participants await Tuesday's release of US inflation data for October, as traders seek fresh cues on the inflationary scenario in the United States.

NZD/USD is struggling to regain its composure after Friday’s slide below the 0.59 level. Economists at ANZ Bank analyze Kiwi’s outlook.

NZ migration and food price data unlikely to shift the dial

It is quite a big week for Sterling. Economists at ING analyze GBP outlook.

Some independent weakness emerging

• USD/CHF loses ground ahead of US inflation data release on Tuesday.
• US Dollar faces challenges despite Fed Chair Powell’s hawkish tone at IMF event.
• Swiss Franc could receive upward support as SNB is expected to increase by a 25 basis points hike in the December meeting.

USD/CHF extends losses for the second successive session, trading lower near 0.9010 during the early European hours on Monday. The USD/CHF pair grapples with challenges, seemingly unaffected by the hawkish remarks from Federal Reserve (Fed) Chair Jerome Powell at the International Monetary Fund (IMF) event on Thursday. Powell stated that current interest rates not doing enough to bring inflation down to the target, which has left the USD in a state of uncertainty.

US Dollar (USD) faced pressure following the release of downbeat preliminary US Michigan Consumer Sentiment data on Friday, which showed a decline to 60.4 in November from the previous figures of 63.8. The downward pressure is further intensified by the lackluster performance of US Treasury yields, which stand at 4.63% for the 10-year US bond coupon by the press time. Traders will likely focus on US inflation data for October scheduled to be released on Tuesday, seeking fresh cues on US economic scenario.

Later in the month, market participants are eagerly awaiting the Swiss ZEW Survey – Expectations and Real Retail Sales, which could provide insights into whether the Swiss National Bank (SNB) will consider an interest rate increase in the December meeting. Expectations seem to be leaning towards a 25 basis points hike. All eyes will be on Chairman Thomas Jordan as he addresses the global risks, uncertainty, and volatility during the conference on Tuesday which will held in Zurich.

FX option expiries for Nov 13 NY cut at 10:00 Eastern Time, via DTCC, can be found below.

- EUR/USD: EUR amounts

• 1.0610 444m
• 1.0625 628m
• 1.0700 579m
• 1.0800 1.3b

- USD/JPY: USD amounts                      

• 150.00 1.9b
• 151.50 395m
• 152.00 1.3b

- AUD/USD: AUD amounts

• 0.6340 318m
• 0.6410 349m
• 0.6435 711m

• The Euro trades with small gains vs. the US Dollar.
• European stocks retreated from tops on Friday.
• US inflation figures will drive the sentiment this week.

The Euro (EUR) looks to extend Friday’s optimism against the US Dollar (USD), encouraging EUR/USD to attempt another move to the 1.0700 zone at the beginning of the week.

On the flip side, the Greenback runs out of steam following Friday’s ephemeral visit to weekly peaks around the 106.00 barrier when tracked by the USD Index (DXY).

In the meantime, the divergence between recent hawkish Fedspeak and investors’ perceptions of a protracted pause in the Fed’s normalization programme is expected to dictate the price action around the US dollar for the time being.

Around the European Central Bank (ECB), there was nothing new in recent comments from President Christine Lagarde other than reiterating that inflation remains too elevated and that the bank should bring inflation down to its target in a timely fashion and maintain the current restrictive stance for a longer period.

Daily digest market movers: Euro keeps the bid bias near 1.0700 

• The EUR approaches the key 1.0700 yardstick vs. the USD.
• US and German yields kick off the week with marginal moves.
• Investors expect the Fed to refrain from hiking rates in December.
• The ECB is seen entering an impasse in its tightening campaign.
• Geopolitical effervescence remains unabated in the Middle East.
• Markets’ attention should remain on US CPI and PPI.

Technical Analysis: Euro faces immediate support at the 55-day SMA

EUR/USD looks to extend the upbeat mood and retargets the key barrier at 1.0700 the figure on Monday.

Further recovery could see EUR/USD revisit the November top of 1.0754 (November 6) prior to the 200-day SMA at 1.0801 and the weekly peak of 1.0945 (August 30). The psychological level of 1.1000 comes next ahead of the August high of 1.1064 (August 10) and another weekly top of 1.1149 (July 27), all preceding the YTD peak of 1.1275 (July 18).

If sellers regain the upper hand, the pair might initially face transitory contention at the 55-day SMA at 1.0640 ahead of the weekly low of 1.0495 (October 13), and the 2023 low of 1.0448 (October 15).

So far, further weakness in the pair remains on the cards while below the 200-day SMA.

Things are likely to get more interesting again on the data front for EUR/USD this week. Economists at Commerzbank analyze the pair’s outlook.

Will US inflation support the Dollar again?

• Pound Sterling finds interim support as UK economic growth was flat in Q3 against expectations of a decline.
• Investors await the UK employment and inflation data for further guidance.
• UK firms cut heavily on investments in Q3 due to a poor demand outlook.

The Pound Sterling (GBP) discovers some optimism as the UK economy manages to avoid a decline in economic activities in the third quarter. The GBP/USD attempts a recovery on temporary optimism but projections for the growth outlook are downbeat as fresh investments from firms in capacity expansion in the last quarter were significantly down due to poor demand from the domestic and overseas markets.

Bank of England (BoE) policymakers: Huw Pill and Katherine Mann are worried about the knock-on effects of higher interest rates in the battle against sticky inflation and are expected to endorse earlier rate cuts, due to deepening recession fears. Forward action in the Pound Sterling will be directed by UK labor market data, which will be published on Tuesday at 07:00 GMT. Investors would keep hiring and wage growth indicators on their radar.

Daily Digest Market Movers: Pound Sterling awaits crucial UK data

• Pound Sterling consolidates in a narrow range above 1.2200 as investors await the UK Employment and inflation data, which will be published on Tuesday and Wednesday, respectively.
• The GBP/USD pair discovers intermediate support near 1.2200 as the UK economy manages to avert a decline in the third quarter of 2023, remaining stagnant instead.
• Preliminary Total Business Investment in Q3 has contracted strongly by 4.2% against expectations of a 3.5% decline. In the Q2 quarter, the long-term spending by firms rose by 4.1%.
• This has set a negative undertone for the Q4 Gross Domestic Product (GDP) as lower business investment indicates weak confidence of firms in the overall demand by domestic and external players.
• The outlook for the UK economy is downbeat as the cost-of-living crisis has deepened due to higher borrowing costs by the Bank of England, easing labor market conditions, and persistent price pressures.
• UK factory data released on Friday indicated that monthly Industrial Production remained stagnant in September and Manufacturing Production expanded at a slower pace of 0.1% against expectations of 0.3%.
• In the latest forecasts, the BoE projected that the economy will be stagnant in the next two years and a mere 0.1% growth will be seen in 2026.
• Last week, BoE Chief Economist Huw Pill warned that higher interest rates for a sufficiently longer period to tame inflationary pressures could result in an excessive slowdown in the economy. 
• The deepening pressures of higher interest rates could force the BoE to consider cutting rates earlier than expected. While discussing cutting rates, Pill said that he expects rate cuts in mid-2024.
• Higher borrowing costs have dampened the affordability of investing in the housing sector. UK property website Rightmove said that asking prices for homes have fallen at their fastest pace in five years for the time of year, reported Reuters.
• Further action in the Pound Sterling would be guided by the labor data, which is scheduled for Tuesday. 
• As per the consensus, the Unemployment Rate in the three months ending September is seen unchanged at 4.2%. The Claimant Count Change for October rose by 15K, lower than 20.4K reading from September.
• Apart from employment numbers, investors will keenly focus on the wage data for the July-September period, which has been a major reason behind stubborn inflation in the UK economy. According to the estimates, Average earnings excluding bonuses eased to 7.7% from 7.8% earlier. The wage data including bonuses softened sharply to 7.4% vs. the former reading of 8.1%.
• Meanwhile, the geopolitical tensions remain escalated as Israeli Prime Minister Benjamin Netanyahu has rejected ceasefire proposals unless it includes the release of all hostages captured by Hamas.
• The US Dollar Index (DXY) continues to face pressure near 106.00 despite Federal Reserve (Fed) Chair Jerome Powell saying he doesn’t consider current interest rates adequate to tame price pressures. 
• Investors await the US inflation data for October, which will be published on Tuesday. The US price index data will provide cues for further monetary policy action by the Fed.

Technical Analysis: Pound Sterling remains cushioned above 1.2200

Pound Sterling remains cushioned near the round-level support of 1.2200. The likelihood of a bullish reversal from the GBP/USD pair is high as the gradual correction after a breakout from the symmetrical triangle formed on a daily timeframe seems concluded. The 20-day Exponential Moving Average (EMA), which trades around 1.2230 is offering support to the Pound Sterling bulls. The broader appeal for the Cable is still bearish as the 50 and 200-day EMA are sloping south.

Upward momentum in USD/CNH past 7.35 has been effectively halted. Economists at CIBC Capital Markets analyze the pair’s outlook.

CNH stability to persist amid continued government intervention 

See: RMB to gain market share amid the global dedollarisation – ANZ

• The index trades without direction below 106.00.
• Further tightening by the Fed is not entirely ruled out.
• Investors’ attention will be on US inflation tracked by the CPI.

The greenback, in terms of the USD Index (DXY), alternates gains with losses around 105.80 at the beginning of the week.

USD Index looks at yields and data

Last week’s strong rebound in the index seems to have met decent resistance around the 106.00 neighbourhood for the time being.

Furthermore, the bounce in the dollar was underpinned by the equally firm move higher in US yields, particularly on the short end of the curve, in response to increasing speculation of further tightening by the Federal Reserve.

On the latter, recent Fedspeak appears to bolster the tighter-for-longer stance from the Fed, a vision that comes in stark contrast to investors’ perception that the central bank is done hiking rates.

Looking at the US docket, markets’ attention is expected to be on the publication of US inflation figures gauged by the CPI and Producer Prices on Tuesday and Wednesday, respectively, as well as Retail Sales.

What to look for around USD

The index seems to be struggling to surpass the 106.00 barrier so far at the beginning of the week, all amidst the multi-session recovery sparked following lows in the sub-105.00 region recorded earlier in the month.

In the meantime, the dollar appears to have regained some poise in response to recent hawkish Fedspeak and on the back of the broad-based good health of the US economy, while inflation is still running well above the Fed’s target.

Propping up an impasse of the Fed’s tightening campaign, however, emerges the continuation of some cooling of the US labour market, as per the latest prints from Nonfarm Payrolls in October (+150K jobs).

Key events in the US this week: Inflation Rate (Tuesday) – MBA Mortgage Applications, Producer Prices, Retail Sales, Business Inventories (Wednesday) - Initial Jobless Claims, Philly Fed Index, Industrial Production, NAHB Index, TC Flows (Thursday) – Building Permits, Housing Starts (Friday).

Eminent issues on the back boiler: Persistent debate over a soft or hard landing for the US economy. Speculation of rate cuts in early 2024. Geopolitical effervescence vs. Russia and China. Potential spread of the Middle East crisis to other regions.

USD Index relevant levels

Now, the index is down 0.05% at 105.75 and initial support is seen at 104.84 (monthly low November 6) ahead of 104.42 (weekly low September 11) and then 103.60 (200-day SMA). On the other hand, the breakout of 106.00 (weekly high November 10) could pave the way to a move to 106.88 (weekly high October 26) and finally 107.34 (2023 high October 3).

Open interest in natural gas futures markets increased once again on Friday, this time by around 15.6K contracts according to preliminary readings from CME Group. On the other hand, volume shrank for the second straight session, now by around 100.8K contracts.

Natural Gas looks supported around $3.00

Friday’s marginal decline in prices of natural gas came amidst inconclusive price action and rising open interest, which leaves room to further weakness in the very near term. In the meantime, the commodity appears so far underpinned by the key $3.00 mark per MMBtu.

• Gold price struggles to gain around $1,940 on Monday.
• Precious metal holds below the 50- and 100-hour EMAs on the four-hour chart. 
• The first resistance level is seen at $1,960; $1,930 acts as an initial support level for gold. 

Gold price (XAU/USD) struggles to gain during the early European session on Monday. Investors await the highly-anticipated US Consumer Price Index (CPI) on Tuesday for fresh impetus. The monthly inflation gauge is expected to rise 0.1% in October while the core CPI is estimated to remain unchanged at 0.3%. At press time, gold price is trading around $1,940, gaining 0.18% on the day.  

That being said, gold price holds below the 50- and 100-hour Exponential Moving Averages (EMAs) on the four-hour chart, supporting the sellers for the time being. It’s worth noting that gold price is located in the bearish territory below 50, indicating the path of least resistance is to the downside in the near-term.

Gold price will meet the first resistance level near the 100-hour EMA at $1,960. The additional upside filter is seen near the upper boundary of the Bollinger Band at $1,969. Further north, the next barrier is located at the $2,000 psychological round mark. 

On the flip side, $1,930 acts as an initial support level for gold. The next contention will emerge near a low of October 16 at $1,908, followed by $1,900 (a round figure).

Gold price four-hour chart

CME Group’s flash data for crude oil futures markets noted traders scaled back their open interest positions on Friday, now by almost 3K contracts. Volume followed suit and dropped for the second consecutive session, this time by around 131.5K contracts.

WTI: A test of $70.00 should not be ruled out

Despite WTI prices rebounded markedly at the end of last week, the bullish attempt was on the back of declining open interest and volume and leaves the door open to the continuation of the downward bias in the very near term. Against that, there are no support levels of note until the $70.00 mark per barrel.

Considering advanced prints from CME Group for gold futures markets, open interest resumed the downtrend and shrank by nearly 7K contracts on Friday. Volume, instead, went up for the second session in a row, this time by around 39.8K contracts.

Gold seems supported by the 200-day SMA

Friday’s strong pullback in gold prices was in tandem with shrinking open interest, suggesting that a sustained drop looks not favoured in the very near term. In the meantime, the key 200-day SMA around $1935 emerges as a decent contention for the time being.

• EUR/USD consolidates in a narrow trading range near 1.0685 on Monday.
• The pair holds above the 50- and 100-hour EMAs; the RSI indicator shows a non-directional movement.
• The immediate resistance level is seen at 1.0718; 1.0655 acts as an initial support level.

The EUR/USD pair oscillates within a narrow trading range below the 1.0700 mark during the Asian session on Monday. Traders prefer to wait on the sidelines ahead of the Eurozone Gross Domestic Product for the third quarter (Q3). The quarterly growth number in the Eurozone is expected to contract by 0.1%, while the annual figure is forecast to grow by 0.1%. The softer report could weigh on the Euro (EUR) and act as a headwind for the pair. The major pair currently trades around 1.0685, unchanged for the day.

From the technical perspective, EUR/USD holds above the 50- and 100-hour Exponential Moving Averages (EMAs) on the four-hour chart, supporting the buyers for the time being. However, the Relative Strength Index (RSI) is located in the 40–60 zone, indicating a non-directional movement in the major pair.

The immediate resistance level for EUR/USD is seen at the upper boundary of the Bollinger Band at 1.0718. Any follow-through buying above the latter will see the next barrier near a high of November 6 at 1.0756. The additional upside filter to watch is near the psychological round figure at 1.0800.

On the other hand, the lower limit of the Bollinger Band at 1.0655 acts as an initial support level for the major pair. A break below 1.0655 will see a drop to the 100-hour EMA at 1.0644. Further south, the next contention level is located near a low of November 2 at 1.0591, followed by a low of November 1 at 1.0517.

EUR/USD four-hour chart

• Crude oil receives downward pressure on concerns over contracted demand in the US and China.
• WTI prices were boosted by Iraq's support for oil cuts by OPEC+ on Friday.
• Baker Hughes US Oil Rig Count reveals a reduction in drilling rigs, marking the lowest point since January 2022.

West Texas Intermediate (WTI) Crude oil prices retrace the recent gains recorded on Friday, trading near 76.40 during the Asian trading hours on Monday. The worries about diminishing demand in the United States (US) and China deteriorate the market sentiment regarding the demand for Crude oil.

The recent data reflecting a decline in China's, the major oil importer, inflation for October could indeed cast a shadow on the global growth outlook. This has a direct impact on the demand for crude oil.

Oil prices enjoyed a nearly 2.0% gain last Friday, fueled by Iraq's endorsement of oil cuts by OPEC+. Traders are expressing concerns about potential supply disruptions stemming from the Israel-Hamas conflict.

However, crude oil prices experienced a downturn due to signals of increased supply. Industry data revealed a significant build in United States (US) crude inventories, countering the positive impact of Saudi Arabia and Russia's commitment to cut 1.2 million barrels in 2024.

The latest report from Baker Hughes on the US Oil Rig Count reveals a reduction in drilling rigs. The count dropped from 496 to 494, marking the lowest point since January 2022.

On the other side, the US Dollar (USD) seems to be in a bit of a conundrum, shrugging off the surprise hawkish remarks from Federal Reserve (Fed) Chair Jerome Powell. Despite Powell expressing concerns about the current policies not effectively curbing inflation to the coveted 2.0% target, the Greenback remains unresponsive.

The US Dollar Index (DXY) remains tepid despite the hawkish remarks from Federal Reserve (Fed) Chair Jerome Powell at the International Monetary Fund (IMF) event on Thursday. Additionally, the index is under pressure following the release of less-than-optimistic preliminary US Michigan Consumer Sentiment data on Friday, declining from 63.8 in the previous month to 60.4 in November.

• USD/CAD hovers above the 1.3800 psychological level on downbeat Crude oil prices.
• WTI prices eased on concerns about diminishing demand in US and China.
• US Dollar remains tepid despite hawkish remarks from Fed Chair Powell and the uptick in US bond yields.

USD/CAD recovers recent losses registered on Friday, bidding higher around 1.3810 during the Asian session on Monday. The Canadian Dollar (CAD) received gains in the previous session on the back of improved Crude oil prices.

However, West Texas Intermediate (WTI) Crude Oil price pulls back and trades below 76.50 at the time of writing. Oil prices step back as renewed worries about diminishing demand in both the United States (US) and China cast a shadow over market sentiment. Concerns about the economic giants are putting a dent in the oil market dynamics.

The yearly decline in Chinese inflation recorded in October could potentially dampen the outlook for global growth. This has a direct impact on the demand for crude oil, given that China is a major importer of oil.

On the US Dollar (USD) side, the surprise hawkish remarks from Federal Reserve (Fed) Chair Jerome Powell failed to boost the Greenback. Powell's concerns about the current policies not being robust enough to bring inflation down to the coveted 2.0% target seem to have left the USD in a state of limbo.

US Dollar Index (DXY) seems to be in a bit of a holding pattern, lacking a clear direction, hovering around 105.80. The index faced pressure after the release of downbeat preliminary US Michigan Consumer Sentiment data on Friday. The report showed a decline in consumer mood, falling from 63.8 in the previous month to 60.4 in November.

However, upbeat US Treasury yields could help the US Dollar to gain upward traction.  The yield on the 10-year US bond coupon stands at 4.65%, reflecting a 0.13% increase by the press time.

Traders are expected to focus on the US Consumer Price Index (CPI) scheduled to be released on Tuesday. On Canada’s docket, low-impact data events are in line such as Wholesale Sales and Industrial Product Price during the week.

• NZD/USD weakens as RBNZ’s inflation report suggests an economic slowdown.
• Kiwi's Business Services Index fell from the previous reading of 50.7 to 48.9.
• Downbeat Chinese inflation could impact the Kiwi Dollar.
• US-China Presidential meeting is scheduled for Wednesday during the Asia-Pacific Economic Cooperation summit in San Francisco.

NZD/USD is caught in a losing streak, stretching for the sixth consecutive session. The pessimistic global economic outlook casts a shadow over the NZD/USD pair. The spot price trades lower around 0.5890 during the Asian hours on Monday.

The inflation report by the Reserve Bank of New Zealand (RBNZ) contributed to the weakening of the NZD/USD pair as New Zealand is a significant exporter of commodities. The report suggests a prevailing sentiment pointing toward an expected decrease in prices, possibly linked to an economic slowdown and diminished demand for goods and services. It seems like the anticipation is setting the stage for a shift in the economic landscape.

The Kiwi's Business NZ PSI for October paints a picture of the Services Index, which took a dip, falling from the previous reading of 50.7 to 48.9. This data might add to the strain on the Kiwi Dollar (NZD), suggesting it's facing additional challenges.

Chinese inflation recorded a yearly decline in October might dampen the outlook for global growth. This directly impacts the New Zealand Dollar (NZD), given its role as a major commodity exporter to China.

Market participants await the upcoming US-China Presidential meeting. Scheduled for Wednesday during the Asia-Pacific Economic Cooperation summit in San Francisco, this marks the first in-person meeting between President Biden and President Xi in a year. The agenda is extensive, covering global issues from the Israel-Hamas conflict to Russia's invasion of Ukraine, fentanyl production, and discussions around artificial intelligence.

US Dollar Index (DXY) moves sideways without a direction despite improved US Treasury yields, bidding around 105.80. The yield on a 10-year US bond coupon stands at 4.66%, up by 0.17% by the press time.

The recent hawkish remarks from Federal Reserve (Fed) Chair Jerome Powell couldn't lift the spirits of the Greenback. Powell voiced concerns that the current policies might not be robust enough to bring inflation down to the coveted 2.0% target.

US Dollar (USD) encounters a challenge following the release of preliminary US Michigan Consumer Sentiment data on Friday. The report indicates a decline in consumer mood, dropping from 63.8 in the previous month to 60.4 in November.

Traders are expected to focus on the US Consumer Price Index (CPI) scheduled to be released on Tuesday. Kiwi’s side is the Producer Price Index – Output to be released later in the week. Meanwhile, China’s Industrial Production and Retail Sales will be eyed on Wednesday.

• USD/JPY extends gains around 151.70 on the higher US Treasury bond yield.
• University of Michigan's Consumer Sentiment Index dropped, but inflation expectations surged in November.
• The US Consumer Price Index (CPI), Japan’s growth numbers will be in the spotlight this week.

The USD/JPY pair trades in positive territory for the sixth consecutive day during the Asian trading hours on Monday. The uptick of the pair is bolstered by the higher US Treasury bond yield and the hawkish comments from Federal Reserve (Fed) Chair Jerome Powell. The pair currently trades around 151.70, gaining 0.10% on the day.

The Federal Reserve (Fed) reiterated that the central bank will not hesitate to tighten policy further if appropriate to bring inflation down to 2%. While other FOMC members' views are flexible and open to additional tightening if warranted by the data.

On Friday, the preliminary University of Michigan's Consumer Sentiment Index for November dropped to 60.4 versus 63.8 prior, below the market consensus of 63.7. The UoM 12-month inflation expectations surges to 4.4% from 4.2%, while the 5-year expectations climbed to 3.2% from 3.0%.

Investors await the US inflation data on Friday for fresh impetus. The stronger-than-estimated data might raise the possibility of Fed rate hikes in the December meeting. This, in turn, might boost the US Dollar (USD) and act as a tailwind for the USD/JPY pair. Fed Funds futures have priced in 14.4% odds of additional rate raising in the December meeting, according to the CME Fedwatch Tool.

On the other hand, a potential FX intervention by the Japanese government might cap the upside of the pair. Last week, the Bank of Japan (BoJ) Governor Kazuo Ueda said that the BoJ would exit the ultra-loose monetary policy with prudence to avoid significant volatility in the bond market. He added that Japan was making moves towards the central bank's 2% inflation target, with a cycle of rising wages and domestic demand-driven inflation picking up pace.

Market players will keep an eye on the US Consumer Price Index (CPI) for October on Tuesday. On Wednesday, the Japanese Gross Domestic Product (GDP) for the third quarter (Q3) will be released, which is expected to contract 0.1% QoQ from the 1.2% expansion in the previous reading. Also, the US Retail Sales and Producer Price Index (PPI) will be due. Traders will take cues from these figures and find trading opportunities around the USD/JPY pair.

• Indian Rupee remains on the defensive after reaching a record low of 83.42.
• The markets anticipate the RBI would intervene in the FX market to limit the INR’s depreciation.
• The India and US Consumer Price Indexes (CPI) will be closely watched events.

Indian Rupee (INR) loses traction on Monday. The local currency bounces off the all-time low of 83.42 against the US Dollar (USD) on Friday. The pressure on the Indian rupee was exacerbated by an outage of the interbank order matching system, which potentially prompted the Reserve Bank of India (RBI) to intervene to calm the market. The markets anticipate the RBI would systematically defend the local currency as it has in previous months. However, the RBI’s move might depend on the US inflation data on Tuesday.

The US Consumer Price Index (CPI) is expected to rise 0.1% MoM in October and the core measure is estimated to grow 0.3% MoM. The stronger-than-expected reading might raise the probability of a Fed rate hike in the December or January meeting. Furthermore, India’s CPI will be released later on Monday, which is forecasted to rise 4.8% YoY in October. The markets will be closed on Tuesday on the occasion of Diwali Balipratipada.

Daily Digest Market Movers: Indian Rupee weakens amid the multiple challenges

• The Reserve Bank of India (RBI) Governor Shaktikanta Das expressed optimism about India's economic outlook but cautioned that the path to becoming a prosperous society may not be smooth.
• RBI’s Monetary Policy Committee (MPC) in its October meeting, anticipates India’s Consumer Price Index (CPI) at 5.4% for 2023–24, from 6.7% in 2022–23.
• According to RBI Governor Das, India is still sensitive to recurring and overlapping food price shocks, and monetary policy is still focused on maintaining inflation at the 4% target.
• RBI forecasts that India's GDP will grow at a 6.3% annual rate in the current fiscal year.
• The University of Michigan's Consumer Sentiment Index declined to 60.4 in November from the previous month's 63.8, below the expectation of 63.7.
• The US 12-month inflation expectations rose to 4.4% from 4.2%, while the 5-year expectations surged to 3.2% from 3.0%.
• Federal Reserve (Fed) Bank of San Francisco President Mary Daly said she is not yet ready to say if the central bank has completed its interest rate-hiking cycle to bring back inflation to 2%.
• Fed Chair Jerome Powell said that if it becomes appropriate to tighten policy further, the central bank will not hesitate to do it.

Technical Analysis: The Indian Rupee’s bearish bias remains intact

The Indian Rupee trades with a soft note on the day. The USD/INR pair has broken above the trading range of 83.00–83.30 since September. According to the daily chart, USD/INR maintains a bullish vibe as the pair holds above the key 100- and 200-day Exponential Moving Averages (EMA).

A high of November 10 at 83.42 acts as an immediate resistance level for the pair. A decisive break above 83.42 will see a rally to a psychological round figure at 84.00. On the flip side, the initial contention level will emerge near a resistance-turned-support level at 83.30. A key support level is seen at 83.00, representing the confluence of a low from October 24 and a round mark. The additional downside filter to watch is a low of September 12 at 82.82.

• GBP/USD strengthens ahead of inflation data from both economies.
• UK GDP data showed better figures than expected, suggesting to avoid a recession in 2023.
• Fed Chair Powell surprised with a more hawkish stance than expected, highlighting concerns that the current policies are not enough.

GBP/USD extends its gains for the second consecutive day, trading higher around 1.2230 during the Asian session on Monday. The GBP/USD pair might have received upward support from the better-than-expected preliminary Gross Domestic Product (GDP) from the United Kingdom (UK) released on Friday, coupled with a weaker US Dollar (USD).

The UK's GDP for the third quarter declined to 0.0% compared to the market consensus of a 0.1% contraction. On an annual basis, GDP remained consistent by growing at 0.6%, missing lower than the 0.5% estimated. These figures could improve the market sentiment for the Pound Sterling (GBP).

Even though the data suggests that the UK seems to avoid a recession in 2023, it still teeters on the brink of a stagflation scenario. Inflation is lingering at elevated levels, coupled with a higher unemployment rate. Tough times for economic balance.

Federal Reserve (Fed) Chair Jerome Powell spiced things up in his Thursday speech, surprising with a more hawkish stance than expected. Worries lingered as he expressed concerns that the current policies might not be doing enough to corral inflation toward the coveted 2.0% target.

However, Friday brought a new twist for the US Dollar (USD). The preliminary US Michigan Consumer Sentiment data took center stage, revealing a dip in consumer mood from 63.8 in the previous month to 60.4 in November.

GBP/USD traders are gearing up for a significant week ahead, focusing on the UK economic docket set to unveil employment and inflation data on Tuesday. Meanwhile, on the US front, all eyes on the currency market will likely be on the US Consumer Price Index (CPI) on the same day.

On Monday, the People’s Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead at 7. 1769 as compared to the previous day's fix of 7.1771 and 7.2889 Reuters estimates.

• Australian Dollar could continue its downward trajectory.
• Australia’s central bank adopted a dovish stance in their recent meeting.
• US Dollar seems lukewarm, despite the positive tone of US bond yields.

The Australian Dollar (AUD) aims to continue a week-long slump while the US Dollar (USD) keeps weakening on Monday despite higher US Treasury yields. However, the AUD/USD pair feels the squeeze after the Reserve Bank of Australia (RBA) struck a dovish chord in their recent meeting.

Australia's central bank issued its Monetary Policy Statement (MPS) on Friday, indicating the hurdles posed by stubborn inflation and a sluggish Australian economy. The RBA has its sights set on realigning inflation with its target. After careful consideration, the idea of hitting the pause button was on the table in November, but the RBA leaned towards the confidence of a rate hike as a more effective measure to tackle inflation concerns.

Federal Reserve (Fed) Chair Jerome Powell surprised in his speech on Thursday, taking a more hawkish stance than anticipated. Powell expressed concerns that the current policies might not be restrictive enough to reel inflation to the coveted 2.0% target. However, the market vibe suggests a widespread belief that the Fed has wrapped up its tightening cycle.

However, on Friday, the Greenback faces a challenge after the preliminary US Michigan Consumer Sentiment data for November showed a dip in the mood among consumers in the United States (US). It fell to 60.4 from 63.8 in the previous month.

Daily Digest Market Movers: Australian Dollar moves sideways, looks for fresh impetus

• RBA increased the Official Cash Rate (OCR) from 4.10% to a 12-year high of 4.35%, responding to the latest Monthly Consumer Price Index (YoY) for September, which indicated a notable increase of 5.6% compared to the expected 5.4% growth.
• Australia’s TD Securities Inflation (YoY) eased at 5.1% in September from 5.7% prior.
• Australia’s Retail Sales grew 0.2% in the third quarter after contracting by 0.6% in the previous quarter.
• Economists at the National Australia Bank (NAB) anticipate another 25 basis points hike in February following the Q4 inflation data. Additionally, NAB believes rate cuts will unlikely commence until November 2024.
• China's Consumer Price Index (CPI) witnessed an annual decline of 0.2% in October, compared to the expected 0.1% decrease. The monthly CPI dropped by 0.1%, contrasting with the earlier 0.2% growth. A weaker economic scenario in China casts a shadow over the Aussie Dollar (AUD), given Australia's heavy reliance on its largest trading partner.
• US weekly Initial Jobless Claims for the week ending November 4 totaled 217K, slightly below the market forecast of 218K and the previous week's figure of 220K.

Technical Analysis: Australian Dollar hovers around 0.6350 with a negative tone

The Australian Dollar walks on a tightrope above the crucial support level of 0.6350 on Monday. A decisive break below might set the AUD/USD pair on a downward journey, eyeing the previous two-week low at 0.6314. On the flip side, the 14-day Exponential Moving Average (EMA) at 0.6387 poses as the initial resistance, followed by the 23.6% Fibonacci retracement at 0.6413, and the psychological hurdle at 0.6500.

AUD/USD: Daily Chart

Reserve Bank of Australia Assistant Governor (Economic) Marion Kohler spoke at a conference on the outlook for the Australian economy on Monday. 

Key quotes

Market reaction

As of writing, the AUD/USD pair is trading at 0.6363, up 0.05% on the day

• EUR/USD gains traction for the second consecutive day
• Fed Chair Powell said that if it’s appropriate to tighten policy further, the central bank will not hesitate to do so.
• European Commission will release Economic Growth Forecasts later on Monday, with downward revisions to 2024 growth expected.
• The US Consumer Price Index (CPI), Eurozone Gross Domestic Products will be in the spotlight this week.

The EUR/USD pair kicks off the week in a positive mood during the early Asian trading hours on Monday. The rebound of the pair is supported by the consolidation mood of the US Dollar (USD). The pair bounces off last week’s low of 1.0656 and remains capped under the 1.0700 barrier. The major pair currently trades around 1.0690, gaining 0.04% on the day.

The University of Michigan Consumer Sentiment index declined from 60.4 in November to 63.7 in October. The US 12-month inflation expectations rose to 4.4% from 4.2%, while 5-year expectations surged to 3.2% from 3.0%. The key event will be the publication of October’s CPI report. If the report shows stronger than the estimated reading, this could raise the possibility of a Fed rate hike again in December. Last week, the Federal Reserve (Fed) Chair Jerome Powell said that if it becomes appropriate to tighten policy further, the central bank will not hesitate to do so.

On the other hand, the European Commission will release Economic Growth Forecasts later on Monday, with downward revisions to 2024 growth expected. The preliminary Eurozone Gross Domestic Product for the third quarter (Q3) will be due. The quarterly figures are estimated to contract by 0.1% and the annual figure is anticipated to grow by 0.1%. Apart from this, several ECB speakers, including Lagarde, De Guindos, Lane, and Villeroy will likely reiterate that any discussion of rate cuts is premature.

The International Monetary Fund said last week that rapid wage growth in the eurozone might keep inflation elevated for longer, and the European Central Bank should retain interest rates at or around record highs into next year to alleviate pricing pressures. However, the market anticipates a rate cut, maybe as early as April, with a total of 90 basis points (bps) of cuts priced in by the end of next year.