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.

 

[Zerologic]

GBPUSD plunges as Trump wins the US presidential election.

Trump's victory in the 2024 US presidential election has had a strong impact on the USD. It was observed that the USD strengthened in all currency pairs after Trump won over Kamala Harris. From the Associated Press, Trump currently gets 72,083,871 votes (51%) and Harris gets 67,274,910 votes (47.6%).

The USD strengthened, including the British Pound Sterling which yesterday plunged from a high of 1.30471, dropping to 1.28333. The price forms a bearish candle with a long body and a shadow at the bottom of the candle. Price falls from above crossing the middle band line and breaking the lower band line.

Trump's promise of an aggressive expansion of US tariffs on all cross-border trade has caused the USD to strengthen against other currencies. Trump has vowed across-the-board tariffs of 10% to 20% on all imports coming into the United States and tariffs of 60%-100% on Chinese imports.

Apart from the US election results which are in the spotlight, the Fed and BoE policies which are predicted to cut interest rates are also the focus of the GBPUSD pair.

Today the Bank of England (BoE) will make a decision on interest rates, which are expected to cut by 25 basis points from 5.00% to 4.75%.

 

[Zerologic]

USDCAD failed to continue its upside rally and fell ahead of the Fed's decision

USDCAD price yesterday drew a bearish candle with a high of 1.39474 and a low of 1.38414 and closed at 1.38621 on the FXOpen platform.

Previously, the USDCAD pair had a strong rally from a low of 1.38131 to a high of 1.39578 due to the influence of Trump's victory in the US elections held on November 5. However, the rally paused and was turned down yesterday.

Ahead of the Fed's interest rate announcement, USDCAD had started to show its decline, and there was no turbulence after the Fed cut interest rates by 25 basis points at 4.75% as expected from the previous 5.00%.

The dollar index (DXY) formed a similar pattern, after rising due to Trump's victory yesterday, falling at 104.187 from a high of 105.252, down around 0.75%.

Next, investors will focus on Canadian employment data which will be released today. Employment Change is predicted to fall to 27.9k from the previous 46.7k, while the Unemployment Rate is predicted to rise to 6.6% from the previous 6.5%.

 

[Zerologic]

Silver prices fell amid the cryptocurrency market Bullrun

Trump's victory in the 2024 US election has had a broad impact on financial markets. Apart from having an impact on strengthening the USD, it is also the reason for the Bullrun in the crypto market. The dollar index (DXY) is now at 104.951, up 0.57%. Meanwhile, in the crypto market, many crypto coins experienced significant prices including Bitcoin in 7 days rising more than 15%, Ethereum 28%, Solana, 26%, Doge 78%, ADA 78%, with almost all crypto coins experiencing price increases.

However, amidst the bull run in the crypto market, the price of Silver actually fell. In Friday's trading, Silver drop formed a bearish candle with a high of 32,059 and a low of 31,184 and closed at 31,295.

Silver and gold are often positively correlated, these two precious metals often move side by side even though there are different movement anomalies. After Trump was confirmed to have won the US election, gold and silver prices fell sharply because Trump's policy of increasing tariffs by 50% for Chinese traders weighed on gold and silver, where China is one of the largest importers of gold and silver globally. However, China is also the second largest silver-producing country after Mexico, in 2022 Mexico produced 5,600 MT and China produced 3,400 MT based on statistics based on the US Geological Survey.

With Trump's promise of an inward economic policy, it could revive the trade war with China, which in fact currently dominates popular international trade with cheaper prices, thereby threatening the domestic economy.

Today on the economic calendar investors may only wait for New Zealand inflation data which is not much related to Silver, while banks in Canada and the US are closed today which could affect market liquidity.

 

[Zerologic]

Gold prices plunge to a low of $2610, the Trump effect weighs on gold

Gold prices on Monday fell sharply extending previous declines. Gold price drew a bearish long-body candle with a high of $2685 a low of $2610 and a close at $2618. Gold price crossed the lower band and MA 50 indicates a sharp decline.

The price of gold experienced a significant decline after Trump won the 2024 US presidential contest. Several reasons caused the price of gold to fall, including the strengthening of the USD, increasing performance on the US stock market, increasing performance of Bitcoin, Donald Trump's claim that he wants to end the Middle East conflict, and the possibility of the Fed holding down interest rates due to high fiscal deficit.

Trump's promise to increase trade tariffs is also predicted to increase the price of goods and inflation which could slow the Fed from lowering interest rates.

In the crypto market, the performance of Bitcoin and its friends also weighed on gold. Bitcoin just hit a new record high of $82k, due to expectations that Trump will loosen crypto regulations. Gold experienced a decline because perhaps portfolio managers switched to riskier assets.

 

[Zerologic]

The British pound weakened against the USD after weak UK employment data

GBPUSD yesterday drew a bearish candle with a long body with a slight shadow at the bottom of the candle. Price formed a high of 1.28726, dropped to a low of 1.27185, and closed at 1.27500. The price drops across the lower band and MA 200 from the upside.

The employment data report released yesterday showed weak data. The unemployment rate rose 4.3% while average income grew faster than expected in the last three months. The Office for National Statistics reported that the ILO Unemployment Rate rose to 4.3% from 4.0% in the three months ended August, higher than estimates of 4.1%. In the same period, UK employers added 219k new workers, less than the previously revised 373k.

Slowing UK labor demand seems to be weighing on the Pound Sterling despite other positive data. Annual growth in average employee regular earnings excluding bonuses in the UK was 4.8% in July to September 2024, and annual growth in total earnings including bonuses was 4.3%. This total annual growth is influenced by one-time payments to civil servants made in July and August 2023.

Meanwhile, the BoE is expected to lower interest rates at its December meeting. Investors expected a 25 basis point cut. However, according to BoE Chief Economist Huw Pill, salary growth is still quite stiff at a high level making it difficult to align with the bank's inflation target of 2%, it seems possible they will hold interest rates longer.

On the other hand, Trump's protectionist policies are predicted to increase inflationary pressures so that the Fed may take a gradual policy easing approach. In December, it is predicted that the Fed will cut interest rates by 25 basis points. According to the FedWatch tool, the possibility of a 25 basis point cut is 58.7%, and the possibility of interest rates remaining unchanged is 41.3%.

Next, investors today will focus on US CPI data. The core CPI is predicted to be 0.3%, the same as the previous revision, the CPI m/m is also predicted to be the same as the previous 0.2%, while the CPI y/y is forecast to rise 2.6% from the previous 2.4%.

 

[Zerologic]

AUDUSD extends decline after US CPI data release

Yesterday the AUDUSD pair continued its decline and drew a bearish candlestick with a long body across the lower band line. Price formed a low of 0.64799, a drop from a high of 0.65455, and the candle closed at 0.64839 on FXOpen. AUDUSD has experienced four consecutive days of decline, indicating that USD strength is more dominant.

Prior to the release of the US CPI data, the market moved weakly, but shortly after the release of the CPI data, prices then fluctuated, rising sharply in less than five minutes to 0.65455 but paused and finally declined gradually. Yesterday's US CPI data was in line with expectations, the core CPI was 0.3%, the Consumer Price Index for All Urban Consumers was 0.2%, while the all-item index was 2.6% from the previous revision of 2.4%.

Even though it temporarily caused AUDUSD to rise, the price then fell, prolonging the strengthening of the USD which also occurred in other currency pairs against the USD.

Today investors will focus on Australian employment data, Employment Change is predicted to fall by 25.2k from the previous 64/1k, and the Unemployment Rate is predicted to be the same as previously at 4.1%. Investors will also pay attention to RBA Gov Bullock Speaks which may provide hawkish or dovish hints.

Apart from Australian employment data, today there is also the release of US economic data, PPI, where the core PPI is predicted to be 0.3% from the previous 0.2%. Unemployment Claims are estimated to be 224k from the previous 221k.

 

[Zerologic]

The GBPUSD pair extended its decline following the release of PPI data

The GBPUSD pair yesterday drew a bearish candle extending its consecutive downtrend for five days in a row. Price formed a high of 1.27193 and a low of 1.26289 and closed at 1.26644. Price has crossed the lower band line and is outside the line.

The United States Producer Price Index (PPI) yesterday showed an actual value of 0.2% higher than the previous data revision of 0.1%, but the value was the same as predicted. In theory, data that is higher than expectations is optimistic for the currency, whereas data that is lower is pessimistic for the currency. Meanwhile, Unemployment Claims data showed 217k from the expected 224k and the previous revision of 221k. This data adds to the optimistic attitude towards the USD.

Even though there was no high volatility in the market after the data release, the strengthening of the USD seems to be continuing, this can be seen from the USD currency which strengthened against other major currencies including JPY, CAD, CHF, AUD, Euro. The euphoria of Trump trades still seems to be driving the strengthening of the USD even though several technical analyzes show oversold levels, but this does not prevent a bear market.

Today investors will wait for the release of UK GDP which is expected to be the same as the previous revision of 0.2%. If the actual value is higher than expected it may encourage GBP to strengthen, whereas if it is lower it is a pessimistic attitude for GBP.

Furthermore, investors are also waiting for the release of US Core Retail Sales data which is expected to fall 0.3% from the previous 0.5%, U.S. retail and food services sales are expected to be 0.3% from the previous 0.4%.

 

[Zerologic]

USDJPY fails to extend gains as USD weakens

Last week USDJPY price drew a bearish candle with a long body as it paused its previous rally. The price formed a high of 156.091 and a low of 153.854 closing at 154.253.

The Japanese yen previously weakened against the USD for four consecutive days due to the protectionist Trump administration, but in weekend trading USDJPY declined due to US core retail sales data 0.1% lower than expected 0.3%. In addition, Japanese Finance Minister Katsunobu Kato's statement that he would take appropriate action against excessive currency movements was another reason for JPY strengthening at the end of last week.

Data taken from the US Cencus showed that the preliminary estimate of US retail and food services sales for October 2024, adjusted for seasonal variation and differences in holidays and trading days, but not for price changes, was $718.9 billion, an increase of 0.4 percent (±0.5 percent) from the previous month, and up 2.8 percent (±0.5 percent) from October 2023. Total sales for the August 2024 to October 2024 period were up 2.3 percent (±0.5 percent) compared to the same period last year. The August 2024 to September 2024 percent change was revised from up 0.4 percent (±0.5 percent)* to up 0.8 percent (±0.2 percent).

Retail trade sales rose 0.4 percent (±0.5 percent) from September 2024, and were up 2.6 percent (±0.5 percent) from a year ago. Non-store retailers rose 7.0 percent (±1.4 percent) from a year ago, while food services and drinking places rose 4.3 percent (±2.1 percent) from October 2023.

Investors' focus today is on BOJ Gov Ueda Speaks which might give fresh hints of hawkish or dovish statements as the future direction of interest rate policy.

 

[Zerologic]

Gold got positive traction on Monday halting the previous week's decline.

Gold prices rose yesterday by drawing a long body bulls candle. The price formed a low of $2563, a high of $2614 and closed at $2611. Monday's rise in gold prices halted the previous week's consecutive declines after last drawing an indecision Doji candle.

Weakening USD seems to have an impact on gold prices. The US dollar weakened after US retail sales core data showed lower than expected numbers. On the other hand, investors still expect Trump's policies in his administration to increase inflation and slowdown the Fed from easing interest rate cuts more slowly. This in turn could increase USD demand and raise government bond yields which could hold back bullish expectations on gold. Traders may still be skeptical that Monday's rise in gold is just a pullback or reversal and may wait for further market changes.

On the other hand, gold's support for geopolitical risks still has potential as a safe-haven asset even though other factors are also a factor such as the Chinese economy and Trump's policy developments.

In the latest development over the weekend, US President Joe Biden authorized Ukraine to use the American Army Tactical Missile System (ATACMS) to attack Russia. The decision to allow the use of US long-range weapons inside Russian territory comes after Moscow deployed North Korean ground troops to supplement its own forces. A prolonged war increases further geopolitical risks that could possibly trigger a third world war.

Meanwhile in the Middle East, the latest news has dragged in a new country fighting against Israel, Iraq. According to CNBC, the Iraqi Islamic Resistance Movement claimed to have fired a drone that successfully hit a vital target in Eliat, an Israeli-occupied territory.

 

[Zerologic]

USDCAD extends losses as Canadian CPI data comes in higher than forecast

Yesterday's USDCAD pair price drew a bearish candle with a long body continuing the previous bears candle. Price formed a high of 1.40358, a low of 1.39542 and close at 1.39548 near the middle band line.

Canada released CPI data on Tuesday showing higher than expected inflation. The actual data of the CPI report showed that headline inflation rose to 2%, faster than expectations of 1.9% and from 1.6% in September. Monthly headline inflation rose 0.4%, at the same pace as price pressures slowed in the previous month. Economists forecast monthly headline CPI to grow 0.3%.

Faster-than-expected inflation data may weigh on the BoC to cut rates more than usual, but Canadian employment data may be another consideration for easing, Canada's Unemployment Rate was at 6.5% in October, much higher than needed to maintain full employment level.

The Dollar Index (DXY) which tracks the USD currency is now down -0.4% at 106.187. Next, investors will wait for the Fed's next steps at the December meeting, with predictions that the Fed will cut interest rates 25 basis points to 4.25%-4.50% next month according to FedWatch tool data from the CME group.

Today investors are waiting for the UK CPI data, although it does not have a direct impact on the Canadian Dollar, but the correlation between currencies allows for an impact. It is estimated that the UK CPI will rise 2.2% from the previous 1.7%.

 

[Zerologic]

Silver failed to continue its increase, the price dropped after the market formed a Doji candle

Silver price drew a Doji candle on November 19 indicating an indecision market. The next day the price of Silver drops and draws a bearish candle. Price formed a high of 31,326 and a low of 30,767 and closed at 30,825.

Here there are differences in market patterns compared to gold. The price of gold appears to be trending upward for three consecutive days drawing a bull candle, in contrast to Silver which drew a bearish candle in the last candle.

It seems that the escalation of the Ukrainian and Russian wars is weighing on Silver because of the pessimistic outlook for Silver's use in industry. Tensions increased further after Joe Biden allowed Ukraine to use US-made long-range weapons to attack Russia. On the other hand, Russia changed its nuclear doctrine to relax the conditions for responding with nuclear weapons which could trigger the Armageddon war.

On the other hand, the lack of stimulus from the Chinese government caused demand for Silver from the solar panel industry to decline and weighed on Silver prices. Another report said Chinese-owned solar panel companies began reducing production as Trump's election victory raised the prospect of higher tariffs on the sector.

 

[Zerologic]

GBPUSD fell amid market expectations of a dovish Fed ease

GBPUSD yesterday drew a bearish candle continuing the previous day's decline. Price formed a high of 1.26594, a low of 1.25755, and closed at 1.25881. This decline further widens the distance between the Bollinger bands, indicating high market volatility.

The Pound Sterling's decline may have been triggered by traders' doubts about whether the Bank of England (BoE) will cut interest rates again at its December meeting considering that the UK Consumer Price Index (CPI) for October on Wednesday showed that price pressures were increasing faster than expected. According to Forexfactory UK CPI rose 2.3% from expected 2.2% and previous data revision of 1.7%. Meanwhile, the Monetary Policy Committee (MPC) projects inflation at 2.4% and 2.5% in November and December respectively.

Another pressure from the strengthening of the USD, the dollar index (DXY) today rose 0.38% from 106,461 to a high of 107,156 continuing the previous day's rise. On the other hand, investors are starting to reduce their forecasts for the Fed to lower interest rates at its December meeting because US President Donald Trump's inflationary, growth-oriented trade policy is predicted to lead to more gradual policy easing. According to the CME group's Fedwatch Tool, the possibility of the Fed lowering interest rates by 25 basis points of 56.1% and the possibility of interest rates remaining unchanged is 43.9%.

Boston Fed Bank President Susan Collins expressed the need to gradually push monetary policy towards a neutral range from the current restrictive state. While the US Unemployment Claims data was lower than expected which was also the reason for the strengthening of the USD, the actual data was 213k from the forecast of 220k and previous data of 219k.

Today, investors will focus on UK retail sales and PMI data which will be released today.