GBP/USD Analysis by zForex Research Team - 11.25.2024
GBP/USD Opens Week Strong, Breaks Above 1.2500
The GBP/USD pair opened the week with a bullish gap, rebounding from a three-day decline that had pushed it below 1.2500 to its lowest level since May. During the Asian trading session, the pair climbed to 1.2600, bolstered by a weaker US Dollar (USD).
The US Dollar Index (DXY), which measures the USD against a basket of major currencies, retreated from a two-year high as traders took profits amid a sharp decline in US Treasury bond yields. Additionally, a global risk-on rally in equity markets further weighed on the safe-haven dollar, providing additional upward momentum for the GBP/USD pair.
In the GBP/USD pair, the first resistance level is at 1.2620, followed by 1.2680 and 1.2720. On the downside, the first support level is at 1.2550, with subsequent supports at 1.2520 and 1.2475.
Weekly Analysis by zForex Research Team - 25-29 November, 2024
Dollar Surges as Currencies, Commodities, and Equities Diverge
Global markets last week experienced a continued dollar rally, a rebound in gold and crude oil, and mixed performances in equities and currencies, as geopolitical tensions and shifting central bank policies shaped investor sentiment.
Key Points:
Currencies:
Dollar Index: Ended the week higher as safe-haven demand grew amid geopolitical risks and reduced Fed rate cut expectations. It tested two-year highs.
EUR/USD: Closed at a 58-week low due to a strong dollar and ECB warnings on geopolitical risks in its Financial Stability Review.
JPY: Dropped further against the USD, pressured by uncertainty over BOJ rate hikes despite verbal warnings from officials.
GBP: Fell to a 26-week low as geopolitical tensions and rising UK inflation (2.3% YoY in October) weighed on the pound.
Offshore Yuan: Declined after the PBoC held key lending rates steady, reflecting continued economic challenges.
CAD: Recovered from a 3-year low, supported by strong inflation data (+2.6% trimmed-mean in October) and resilient economic indicators.
AUD: Strengthened, driven by a hawkish RBA stance but limited by geopolitical tensions and USD strength.
Commodities:
Gold: Rebounded by $130/oz, supported by geopolitical risks and safe-haven demand. Fed rate cut speculation added support.
Silver: Gained alongside gold but underperformed due to weak demand and reduced production in China, raising the gold-to-silver ratio by 2%.
WTI Crude: Rose on Russia-Ukraine tensions but capped by rising U.S. inventories (+0.5M barrels vs. +0.4M expected).
Fixed Income:
U.S. Treasury Yields: 10-year yields were flat, while 2-year yields rose, reflecting mixed sentiment on rate cuts.
Macro Analysis
Eurozone CPI (Oct): Inflation rose to 2.0% (from 1.7%), with services contributing the most (+1.77 pts), while energy dragged (-0.45 pts).
UK CPI (Oct): Inflation increased to 2.3% YoY, up from 1.7% in September, driven by rising owner occupiers’ housing costs (+7.4%).
U.S. Jobless Claims (Nov 16): Fell to 213K (-6K), marking a new low since April.
Philadelphia Fed Index (Nov): Dropped to -5.5, indicating regional manufacturing slowdown.
Existing Home Sales (Oct): Increased 3.5% MoM to 3.96M units, rebounding from a 14-year low.
PBoC Loan Prime Rate: Left unchanged (1-year at 3.1%, 5-year at 3.6%).
Equities
U.S. Indices: S&P 500 (+1.3%), Dow (+1.3%), Nasdaq (+1.6%) rebounded after a selloff.
Top Performers: Tesla (+14%), Netflix (+8%), Apple (+2%).
Lagging Stocks: Microsoft (-3%), Google (-5%), Meta (-2.7%), Amazon (-5%).
Daily Analysis by zForex Research Team - 11.26.2024
Markets React to Treasury Nomination and Geopolitical Developments
Markets are reacting to shifting geopolitical and economic developments as the dollar weakens following Scott Bessent's nomination as Treasury Secretary, signaling a focus on stability amid tariff concerns.
Precious metals, including gold and silver, face pressure from reduced safe-haven demand due to Israel-Hezbollah ceasefire reports, while the Euro and Pound experience mixed movements ahead of crucial economic data. Investors turn their attention to upcoming Fed minutes, Eurozone inflation figures, and Tokyo’s inflation data to gauge potential monetary policy adjustments.
EUR/USD Analysis by zForex Research Team - 11.26.2024
Market Eyes ECB Rate Cuts as Eurozone Risks Persist
The Euro edged closer to $1.05, supported by a weakening dollar after Donald Trump announced Scott Bessent as his Treasury Secretary pick. Bessent’s expected focus on stability eased concerns over sweeping tariffs. However, the Euro remains near two-year lows amid worries over Eurozone economic risks, including a second Trump term, the Ukraine war, and political instability in Germany and France. Markets have fully priced in a 25bps ECB rate cut next month, with a 58% chance of a 50bps cut. Upcoming Euro Area inflation data this week may provide further clarity on the ECB’s next move.
Resistance levels for the euro are at 1.0530, followed by 1.0600 and 1.0660. Support levels are at 1.0450, 1.0400, and 1.0330.
Gold Analysis by zForex Research Team - 11.26.2024
Focus Shifts to Fed Minutes as Gold Recovers from Sharp Drop
Gold steadied around $2,620 on Tuesday after a 3.4% drop, driven by reports of an Israel-Hezbollah ceasefire reducing safe-haven demand. The metal faced further pressure from a stronger dollar following Trump’s announcement of tariffs on Mexico, Canada, and China. Gold was also impacted by the nomination of Scott Bessent as Treasury Secretary, who advocated phased trade restrictions and negotiation on tariff levels. Investors now await the Fed’s November meeting minutes for insights into future monetary policy.
Resistance levels for gold are at $2,635, $2,660, and $2,690. Support levels are at $2,600, $2,575, and $2,550.
