Today market outlook

[Zerologic]

Bullish gap EURUSD price back near the previous high

In trading earlier this week, the EURUSD price opened at 1.08739, much higher than last Friday's closing price at 1.08309. The bullish gap is also clearly visible on the H4 timeframe.

It seems that the time approach of the US elections which will be held on November 5 provides support for the strengthening of the USD. The US dollar index (DXY) is now at 104.317 up from 103.679. It is not yet known who will be the winner of the US election, the ABC News poll results also show a tight competition between Trump and Harris with Harris' poll results being slightly superior to Harris's with 47.9% for Harris and 46.9% for Trump.

Apart from the US election, another factor driving the USD is the US employment report data. The NFP report indicated that estimated employment payrolls for several industries were affected by the hurricane, which was identified on the Florida Gulf Coast on September 26, 2024. NFP data was 12k smaller than the expected 106k, while the Unemployment Rate was 4.1% the same as the previous period's revision. Meanwhile, ISM Manufacturing PMI 46.5 was smaller than expected 47.6 smaller than the previous revision 47.2.

In the future, investors will also pay attention to the Fed's interest rates, which are predicted to cut interest rates by 25 bp from the previous 5.00% to 4.75%. According to the FedWatch tool, the possibility of the FED cutting interest rates by 25-50 bp is 95.4% and the possibility of interest rates remaining unchanged is only 4.6%.

Today there doesn't seem to be any high-impact news on the economic calendar, in Japan the bank holiday commemorates Culture Day which allows the Tokyo session to be affected by this bank holiday.

 

[Zerologic]

Gold prices remain steady above $2728 ahead of the US election

The price of gold on Monday formed a small candle like a Doji which indicates an indecision market. Even though it tends to fall, the decline is still stuck above the price level of $2728. The price formed a high of $2747 and a low of $2729 to close at $2735. Investors are still waiting for the US elections to be held today.

Gold got a slight boost from a weaker USD as bets on a Trump win were reduced. Analysts estimate that Trump's victory could have an impact on gold because Trump's policies might maintain high interest rates thereby increasing foreign capital inflows.

However, ahead of this election, the USD weakened, ABC News poll results showed Harris leading 48.0% while Trump polled 46.8%. Although it is not certain that the poll results are correct, this has caused bets on Trump to decrease.

On the other hand, the Fed might cut interest rates by up to 50 bp, which could trigger demand for gold because it is considered a safe-haven asset that does not provide returns. According to the FedWatch tool, the probability of the Fed cutting interest rates by 50 bp is 98.0% and the probability of interest rates remaining unchanged is only 2.0%.

Geopolitical risks are currently still a topic of discussion that can encourage gold as a safe-haven option amidst global uncertainty. After Israel attacked Iran, it seemed that tensions were continuing, Iran's leader, Ayatollah Ali Khamenei, said that anything that disturbed Iran's security would get a devastating response, and maybe they would even change their nuclear policy if Israel and the US as their main allies attacked Iran.

Today's important economic data may be of concern to the market, ISM services, Presidential elections, and Congressional Elections.

 

[Zerologic]

In the midst of the US election NZDUSD jumped from 0.59662 to 0.60145.

The US election has been taking place since November 5 with a tight competition between Kamala Haris and Donald Trump. The NZDUSD pair drew a bulls candle yesterday with a low of 0.59662 and a high of 0.60145 and closed at 0.60054 below the middle band line.

As is known, NZD is one of the commodity currencies that is influenced by their commodity exports, so the US election is crucial for this currency because the change of president may differ in the economic policies implemented.

New Zealand is China's trading partner, if Trump becomes the winner of the election, it could be less supportive of New Zealand's partnership with China because Trump promised to levy 60% import tariffs on China if he wins, which would increase risks to economic growth.

Meanwhile, analysts estimate that the Reserve Bank of New Zealand (RBNZ) will cut interest rates again by 50 basis points at its last monetary policy meeting this year on November 27.

New Zealand employment data released today showed the actual data was 4.8% smaller than the expected 5.0%, although it was higher than the previous revision of 4.6%. Less actual data good for currency. Meanwhile, the Change in the number of employed people report shows -0.5% smaller than expected -0.4% from the previous revision of 0.2%. actual data is lower than expected which is less good for the currency.