EUR/USD Price Analysis – Nov 06, 2024
Daily Price Outlook
During Wednesday’s European session, the EUR/USD currency pair struggled to recover and remained under pressure around the 1.0750 mark, hitting an intraday low of 1.0703.
The pair took a significant hit as Republican candidate Donald Trump claimed victory in the 2024 U.S.presidential election, with Republicans expected to gain control of both the Senate and the House. This development triggered a surge in the U.S. Dollar, driving a wave of selling pressure on the Euro.
On the flip side, the Euro’s outlook has weakened as markets anticipate that Trump’s proposed protectionist policies could weigh heavily on European economic growth. Consequently, the Euro depreciated not only against the Dollar but also against other major currencies, reflecting broad concerns about the impact of U.S. policy shifts on the European economy.
US Dollar Strengthens Amid Trump’s Victory, Putting Pressure on EUR/USD
On the US front, the US dollar has been flashing green and gained strong bullish traction as Donald Trump claimed victory in the 2024 presidential election. While the result is not officially confirmed, Trump declared himself the winner, having won key battleground states like North Carolina, Georgia, and Pennsylvania. Fox News has already called him the winner over Democrat Kamala Harris.
As a result, the US dollar surged, reaching its highest level in nearly four months, with Treasury yields rising alongside it. Meanwhile, traders are awaiting the Federal Reserve’s decision on interest rates, with expectations of a 25 basis point rate cut on Thursday.
Therefore, the strength of the US dollar, fueled by Trump’s victory and Republican control, is putting pressure on the EUR/USD pair, adding to the bearish trend for the Euro against the greenback.
EUR/USD Faces Strong Selling Pressure Amid Trump’s Tariffs and ECB Rate Cut Expectations
On the other hand, the shared currency weakened as the US Dollar outperformed and the Euro (EUR) saw a sharp decline against other major currencies. The outlook for the Euro has become more negative, as market participants worry that Trump’s protectionist policies, such as tariffs, could severely hurt European economic growth.
According to a Dutch bank, Trump's tariffs could reduce European growth by 1.5 percentage points, which could result in an economic loss of around €260 billion based on Europe’s 2024 GDP of €17.4 trillion.
If Europe’s economy slows down because of Trump’s tariffs, the European Central Bank (ECB) may need to act quickly, possibly cutting interest rates to near zero by 2025. Euronews reports that Trump’s victory could push the ECB to make a larger-than-usual rate cut of 50 basis points in its next meeting in December.
This would be the fourth interest rate cut by the ECB this year, as they try to support the Eurozone economy. These factors are putting strong selling pressure on the EUR/USD pair, further weakening the Euro against the US Dollar.
Therefore, the negative outlook for the Euro, driven by concerns over Trump’s tariffs and potential ECB rate cuts, is putting significant pressure on the EUR/USD pair. This has led to further weakening of the Euro against the stronger US Dollar, intensifying the bearish trend.
EUR/USD – Technical Analysis
EUR/USD has dropped to $1.07183, shedding nearly 2% as the pair struggles to find support amidst continued dollar strength. The sharp decline in the euro signals bearish momentum, with immediate support now positioned at $1.06791.
Should this level fail to hold, the next critical support zones lie at $1.06375 and potentially lower, putting additional downside pressure on the euro. The pair faces resistance at $1.07760, with further resistance levels at $1.08108 and $1.08558. A push above these levels would be needed to shift momentum back in favor of the euro.
Technical indicators confirm the bearish outlook, with the RSI hovering at an oversold level of 24, suggesting intense selling pressure. While an oversold RSI could hint at a potential short-term bounce, the broader trend remains downward. The 50-day EMA, currently at $1.08728, sits well above the current price, reinforcing the bearish bias and indicating that any upside attempt may be limited.
Given the strong dollar environment, traders might consider selling positions below the pivot point at $1.07767, with a target take-profit level around $1.06941 and a stop loss near $1.08204. If EUR/USD remains under $1.07760, sellers are likely to stay in control, pushing the pair lower towards key support levels.
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USD/CAD Price Analysis – Nov 05, 2024
Daily Price Outlook
During European trading hours on Tuesday, the USD/CAD currency pair continued its downward trend for the second consecutive session, hovering around 1.3880. However, the commodity-linked Canadian Dollar (CAD) is benefiting from steady oil prices as Canada is the largest oil exporter to the United States. Meanwhile, analysts expect the Bank of Canada (BoC) to implement a significant rate cut at its final monetary policy meeting of the year in December.
In contrast, the US Dollar is under pressure as the market anticipates the upcoming US elections. Hence, the USD/CAD pair is likely to weaken as the Canadian Dollar gains support from stable oil prices and anticipated rate cuts by the Bank of Canada, pressuring the US Dollar.
Therefore, the USD/CAD pair is likely to weaken as the CAD gains support from stable oil prices and anticipated rate cuts by the Bank of Canada. In contrast, the US Dollar faces downward pressure, further contributing to the pair's decline.
Impact of Oil Prices and Bank of Canada Decisions on USD/CAD Pair
As we mentioned, the Canadian Dollar is getting support from stable oil prices since Canada is the largest oil exporter to the United States. Currently, Oil prices are steady as traders remain cautious due to the uncertainties surrounding the results of the US presidential election taking place on Tuesday.
Looking ahead, the Bank of Canada (BoC) is expected to announce a significant rate cut at its final monetary policy meeting of the year in December. BoC Governor Tiff Macklem has hinted at the possibility of reducing rates by another 50 basis points (bps).
Traders will be closely watching Canada’s International Merchandise Trade data, which includes information on imports and exports, scheduled for release on Tuesday. Then, on Wednesday, the focus will shift to the BoC's Summary of Deliberations and the Ivey Purchasing Managers Index (PMI) data.
Therefore, the USD/CAD pair is likely to weaken as the Canadian Dollar gains strength from stable oil prices and anticipated rate cuts by the Bank of Canada. Meanwhile, uncertainty surrounding the US elections may put additional pressure on the US Dollar.
Impact of US Presidential Election Uncertainty on the USD/CAD Pair
On the US front, former President Donald Trump and Vice President Kamala Harris are both confident about their chances as they campaign across Pennsylvania on the last day of a very close presidential election. Current opinion polls show that Trump and Harris are almost tied, meaning the final winner may not be known for several days after the voting takes place on Tuesday.
As a result, the US Dollar is facing downward pressure despite the rising US Treasury yields. The yields on 2-year and 10-year US Treasury bonds are currently at 4.17% and 4.30%, respectively. T
Therefore, the uncertainty surrounding the US presidential election may exert downward pressure on the USD, potentially weakening the USD/CAD pair. However, stronger US Treasury yields could provide some support for the Dollar, mitigating losses against the Canadian Dollar amid stable oil prices.
USD/CAD – Technical Analysis
The USD/CAD pair is trading at $1.38862, down by 0.12% in the latest session, as it encounters downward pressure near key technical levels. Currently, the pair is testing a critical pivot at $1.39210, which defines its short-term direction.
The Relative Strength Index (RSI) stands at 36, edging towards the oversold zone, indicating that the bearish momentum may be close to exhaustion, though a further drop remains possible.
Immediate resistance is positioned at $1.39349, with further upside barriers at $1.39489. A push above these levels could shift sentiment to a more bullish outlook, targeting higher grounds. However, the 50-day Exponential Moving Average (EMA) at $1.39120 serves as a key point of overhead resistance, reinforcing a bearish bias below this level.
On the support side, the first major support lies at $1.38789, with additional safety nets at $1.38635 and $1.38447. Should USD/CAD break below the $1.38789 support level, it could accelerate selling pressure, possibly driving the pair lower.
For now, the market favors a bearish stance, with a recommended entry below $1.38931, targeting $1.38629 for profit-taking while setting a stop loss at $1.39140 to manage potential risks.
Overall, USD/CAD remains in a downtrend, with key levels to watch on both sides. A break below immediate support could further solidify the bearish trend, while any recovery above the 50 EMA may indicate a potential reversal.
AUD/USD Price Analysis – Nov 05, 2024
Daily Price Outlook
Despite the risk-off market sentiment, the AUD/USD currency pair maintained its upward momentum, trading well-bid near the 0.6623 mark and reaching an intra-day high of 0.6623. However, the latest uptick followed the release of improved Purchasing Managers Index (PMI) data on Tuesday.
Meanwhile, the Reserve Bank of Australia (RBA) opted to keep the Official Cash Rate (OCR) steady at 4.35% for the eighth consecutive time in November. The central bank is widely expected to maintain this rate in the coming months, supporting the Australian dollar.
Conversely, the US dollar weakened amid uncertainty surrounding the ongoing US presidential election. This factor further bolstered the AUD/USD pair. Moving ahead, Investors are closely watching the election outcome as former President Donald Trump and Vice President Kamala Harris expressed confidence in their campaigns, making final pushes across Pennsylvania on Monday.
Australian Dollar Strengthens Amid Positive Economic Data and US Election Uncertainty
As we mentioned, the Australian Dollar is gaining traction, thanks to better Purchasing Managers Index (PMI) data released on Tuesday. In the meantime, the Reserve Bank of Australia (RBA) has decided to keep the Official Cash Rate (OCR) steady at 4.35%, marking the eighth straight month of maintaining this rate.
However, the central bank is expected to continue this approach after their policy meeting. RBA Governor Michele Bullock highlighted the importance of keeping interest rates high for now because of ongoing inflation risks.
On the data front, Australia's Judo Bank Services PMI improved to 51.0 in October, up from 50.6 in September, indicating better performance than expected. The Composite PMI also increased to 50.2, compared to 49.8 earlier. Additionally, Australia's Producer Price Index (PPI) rose by 0.9% in the third quarter, following a 1.0% increase in the previous quarter and beating forecasts of a 0.7% rise.
This marks the 17th straight period of producer inflation, though annual PPI growth slowed to 3.9% in Q3, down from 4.8% last quarter. Meanwhile, China’s Caixin Services PMI rose to 52.0 in October from 50.3 in September.
Therefore, the AUD/USD pair is likely to strengthen as solid PMI data supports the Australian dollar, while uncertainty surrounding the US presidential election weighs on the US dollar. Investors may favor the AUD amidst stable rates and positive economic indicators.
Impact of US Election Uncertainty and Fed Rate Cut on AUD/USD Pair
On the US front, the broad-based US dollar struggled on Tuesday and turned bearish due to uncertainty surrounding the upcoming presidential election. However, the opinion polls show that Trump and Harris are almost tied, and the final results may take days to determine after the vote.
Trump has indicated that he may contest any unfavorable outcomes, similar to his actions in 2020. This election uncertainty contributed to the dollar's weakness, especially after a poll showed Kamala Harris leading Trump 47% to 44% in Iowa.
In addition to the election, investors are closely watching the US Federal Reserve's policy decision expected on Thursday, with markets anticipating a modest 25 basis point rate cut. The CME FedWatch Tool shows a 99.5% chance of this rate cut happening in November.
Meanwhile, the TD-MI Inflation Gauge rose by 0.3% month-over-month in October, up from 0.1% the previous month, marking the highest reading since July. Annually, the gauge increased to 3.0% from 2.6%. Furthermore, the US Bureau of Labor Statistics reported that October's Nonfarm Payrolls only increased by 12,000, far below expectations, while the Unemployment Rate held steady at 4.1%.
Therefore, the uncertainty from the US election and anticipated Fed rate cut may weaken the US dollar, potentially boosting the AUD/USD pair.
AUD/USD – Technical Analysis
The Australian dollar (AUD/USD) is trading at $0.66140, up 0.46% on the day, reflecting a cautiously optimistic sentiment as it approaches a critical pivot at $0.66189. This level is shaping up as a short-term benchmark for the pair, with technical indicators leaning towards bullish potential. The Relative Strength Index (RSI) stands at 65, suggesting some upward momentum but nearing the overbought zone, signaling possible resistance ahead.
Immediate resistance is located at $0.66332, followed by further hurdles at $0.66486. A sustained break above these levels would signal a strengthening bullish trend, setting the stage for an advance. However, the 50-day Exponential Moving Average (EMA) at $0.65869 acts as a lower boundary of support, reinforcing a bullish outlook as long as prices hold above it.
On the downside, support is established at $0.65800, with additional floors at $0.65654 and $0.65464. These levels should serve as safety nets for bullish traders, as a break below $0.65800 could expose the pair to further declines. For now, the trend remains positive, with an entry strategy above $0.66003, targeting $0.66300 while managing downside risk with a stop loss at $0.65842.
The overall picture favors a short-term buying strategy given the strength of key support levels and upward momentum indicators. Traders should watch for a breakout above immediate resistance to confirm further gains.
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GOLD Price Analysis – Nov 05, 2024
Daily Price Outlook
Gold prices (XAU/USD) have managed to recover some of their early losses but are still trading sluggishly around the 2,736 level. However, the safe-haven demand for gold is likely to rise amid the uncertainty surrounding the election and the potential for escalating geopolitical tensions in the Middle East. This risk-off environment provides some support for the precious metal.
Meanwhile, the ongoing expectations that the Federal Reserve may cut interest rates due to a slowing labor market are leading to a drop in US Treasury bond yields. This, in turn, weakens the US Dollar, benefiting gold prices.
Rising Safe-Haven Demand Drives Gold Prices Amid US Election and Geopolitical Uncertainty
Despite some early losses, gold demand remains supported by the uncertainty surrounding the closely contested US presidential election and escalating geopolitical tensions in the Middle East. The political situation is creating a caution among investors, leading them to seek safety in gold. It is worth noting that the recent opinion polls show Democratic candidate Kamala Harris and Republican Donald Trump are in a tight race, which adds to the political uncertainty.
At the same time, the market is seeing a shift away from the “Trump trade,” as Donald Trump’s chances of winning have decreased. This has contributed to lower US Treasury bond yields. The yield on the benchmark 10-year US government bond experienced its biggest drop in two months, while the two-year Treasury note also saw a significant decline.
Investors are anticipating that the Federal Reserve will cut interest rates further, especially as signs indicate a slowing US labor market. These lower yields are not helping the US Dollar strengthen and are instead providing support for gold prices, which do not earn interest.
Moreover, geopolitical tensions are escalating, particularly with Iran warning of a harsh response to recent Israeli strikes, while the US has cautioned Iran against attacking Israel. This situation adds to market uncertainty. Later today, the US will release the ISM Services PMI report, but it is unlikely to impact the market much as everyone awaits the outcome of the presidential election.
Therefore, the uncertainty from the US presidential election and rising geopolitical tensions, combined with lower US Treasury yields and interest rate cut expectations, are boosting safe-haven demand for gold, helping to support its prices in a cautious market environment.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is currently trading at $2,735.45, showing a modest decline of 0.04% on the day. The metal remains under pressure as it navigates around a crucial pivot point at $2,741.63, and technical indicators are signaling further downside potential if prices break below this level. The Relative Strength Index (RSI) stands at 44, indicating a bearish sentiment without reaching oversold territory.
Immediate resistance is situated at $2,748.35, with further upside targets at $2,753.68 and $2,762.36. For bullish momentum to gain traction, gold would need to surpass these levels convincingly. However, a looming resistance at the 50-day EMA, currently at $2,741.23, could cap gains in the short term.
On the downside, immediate support is found at $2,731.72, followed by stronger floors at $2,725.00 and $2,717.20. A break below the $2,731.72 support may prompt increased selling pressure, potentially driving gold toward the $2,725 target.
Given the downward trend and the pressure from key resistance points, a prudent strategy may involve selling below $2,740 with a take-profit target set at $2,725, while setting a stop loss near $2,750 to manage risk.
GOLD Price Analysis – Nov 04, 2024
Daily Price Outlook
Gold prices (XAU/USD) have shown a rebound and trading near $2,740 level. However, this uptick is largely driven by increased uncertainty surrounding the upcoming U.S. presidential election and escalating tensions in the Middle East.
Investors are turning to gold as a reliable store of value. However, the announcement of election results is scheduled for this Tuesday, keeping market watchers on high alert.
Analysts at JPMorgan suggest that regardless of the election outcome, a potential drop in gold prices could present an attractive buying opportunity for those looking to capitalize on market fluctuations. This week is expected to be crucial for gold as investors navigate through the prevailing uncertainty.
Gold Prices Under Pressure Amid US Election Uncertainty and Economic Data
On the U.S. front, the ongoing uncertainty surrounding the presidential election and ongoing tensions in the Middle East are likely driving increased demand for gold as a safe-haven asset. Investors typically turn to gold during periods of uncertainty, and with the election approaching, this demand is anticipated to grow.
In recent economic news, the weaker US job growth has sparked hopes for a rate cut. However, the October Nonfarm Payrolls (NFP) data showed an increase of only 12,000 jobs, the smallest gain since December 2020.
This is a major drop from the revised September figure of 223,000 and falls far below the market expectation of 113,000. Meanwhile, the unemployment rate held steady at 4.1%, which matched forecasts. This weak job growth may lead to a 25 basis points (bps) cut in interest rates from the Federal Reserve at their meeting next Thursday.
Hence, the rising demand for the US dollar and increasing bond yields create pressure on gold prices as higher yields make gold less attractive compared to other investments.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,741.66, up 0.19% for the day, and currently sits just above a key pivot level at $2,738.29. The immediate resistance at $2,745.32 will be closely watched, as a break above could pave the way for further gains, with additional resistance targets at $2,753.70 and $2,760.76.
These levels align with the 50-day Exponential Moving Average (EMA) at $2,754.12, reinforcing the $2,753.70 mark as a crucial hurdle for any sustained bullish momentum.
On the downside, immediate support rests at $2,731.80, with subsequent layers at $2,724.64 and $2,717.20. Should gold dip below these levels, it may signal a shift to a more bearish outlook, particularly as the RSI stands at 43, indicating neutral territory but leaning towards bearishness in the short term.
With the broader trend influenced by ongoing geopolitical tensions and market expectations for a potential Fed rate cut, the $2,738.29 pivot level becomes even more critical. A sustained move above this pivot could attract additional buying interest, targeting $2,753. Meanwhile, a dip below could invite sellers, pushing gold toward the lower support levels.
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GBP/USD Price Analysis – Nov 04, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair maintained its upward trend and remained well-bid around the 1.2961 level and reaching an intraday high of 1.2999. However, the upward trend can be attributed to the US Dollar's strong decline ahead of the upcoming presidential election on Tuesday.
As a result, the Pound Sterling is gaining strength against the Dollar and other major currencies. Investors are also focused on the Bank of England’s monetary policy decision expected on Thursday, which could further impact the cable pair performance.
US Dollar Weakness and Its Impact on GBP/USD Exchange Rate
On the US front, the broad-based US dollar failed to sustain its bullish trend and turned bearish on Monday as the US Dollar Index (DXY) dropped to around 103.60, its lowest level in almost two weeks.
However, this decline was triggered by a recent poll from the Des Moines Register/Mediacom Iowa Poll, which showed Democratic candidate Kamala Harris gaining three points over former President Donald Trump in Iowa. Many national polls indicate a close race between the two candidates, creating uncertainty in the market.
Besides the election, investors are also looking to the Federal Reserve’s (Fed) policy announcement on Thursday. The Fed is expected to cut interest rates again, but this time by a smaller amount of 25 basis points, following a larger cut of 50 basis points in September. Investors will be particularly attentive to the Fed’s comments about future rate decisions, especially for the December meeting.
Therefore, the bearish trend of the US dollar could strengthen the GBP/USD pair as the Pound gains against a weakening Greenback. Meanwhile, uncertainty surrounding the election and potential Fed rate cuts may further support the Pound’s upward momentum against the Dollar.
Impact of Bank of England's Monetary Policy on GBP/USD Pair
On the GBP front, the upticks in the GBP/USD pair could be further boosted by the Bank of England's (BoE) monetary policy decision expected on Thursday. However, the BoE is anticipated to cut interest rates by 25 basis points, bringing them down to 4.75%.
Notably, Monetary Policy Committee (MPC) members are mostly in favor of a rate cut, with seven expected to support it, while two, including external member Catherine Mann, prefer maintaining rates at 5%.
Investors will closely watch BoE Governor Andrew Bailey’s press conference following the policy decision for insights into future actions, especially for December.
Moreover, UK Chancellor of the Exchequer recently announced £40 billion in new taxes, the highest since 1993, along with various investment projects aimed at boosting public spending. The Office for Business Responsibility (OBR) has also raised current-year inflation targets to 2.5% from the previous 2.2%.
Therefore, the anticipated rate cut by the Bank of England could strengthen the GBP/USD pair, as a lower interest rate may encourage investment in the Pound. However, the uncertainty around inflation targets and government policies could also create volatility in the exchange rate.
GBP/USD – Technical Analysis
The GBP/USD pair is trading at $1.29868, up 0.56% for the day, as it hovers around a key pivot level at $1.29954. This pivot point will be critical in determining the pair’s next move. Immediate resistance is positioned at $1.30108, followed by further resistance at $1.30262 and a higher target at $1.30431.
A break above these levels could indicate renewed bullish momentum, particularly if GBP/USD sustains above the 50-day Exponential Moving Average (EMA) of $1.29315. With the Relative Strength Index (RSI) reading at 64, the pair is close to overbought territory, signaling that the upside may be limited unless there’s a decisive move past the resistance zone.
On the downside, immediate support lies at $1.29674, with additional layers at $1.29473 and $1.29274. Should the pair drop below $1.29674, selling pressure could increase, pushing GBP/USD toward the 50 EMA, which acts as a significant support barrier.
Market sentiment is closely tied to ongoing dollar strength and investor sentiment around the Bank of England’s interest rate outlook, which could influence GBP demand.
For traders, a breach below the pivot at $1.29954 could trigger selling interest, targeting $1.29531. However, a sustained push above $1.30108 would shift the outlook to bullish, with $1.30431 as an upper target in the short term.
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EUR/USD Price Analysis – Nov 04, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair extended its upward trend, maintaining strong support around 1.0903 and reaching an intra-day high of 1.0905. This bullish momentum is primarily fueled by a strong Euro currency, which has gained traction following positive Eurozone economic data that alleviated concerns about significant rate cuts by the European Central Bank (ECB) in December.
Moreover, the rise in the EUR/USD pair accelerated as the US Dollar weakened amidst growing uncertainty ahead of the upcoming US presidential election on Tuesday and the Federal Reserve's monetary policy meeting on Thursday.
Euro Strengthens as Positive Economic Data Reduces Rate Cut Expectations
As we mentioned the bullish trend in the Euro currency has been backed by positive recent economic data from the Eurozone, which reduced expectations of large interest rate cuts by the European Central Bank (ECB) in December.
On the data front, the Eurozone’s economy grew faster than expected in the third quarter, with Gross Domestic Product (GDP) performing better than forecasted. This stronger-than-expected growth has led traders to scale back their expectations for a major interest rate cut of 50 basis points in December.
Furthermore, October’s inflation rate increased to 2%, further challenging the need for a steep rate cut by the ECB. Moreover, manufacturing in both Germany and the Eurozone improved, as shown by the final October PMI (Purchasing Managers' Index) data. In the meantime, Sentix Investor Confidence, a key sentiment indicator, also showed slight improvement, moving from -13.8 in October to -12.8 in November, though it remains in negative territory.
Therefore, the positive economic data from the Eurozone, along with reduced expectations for significant rate cuts, is likely to strengthen the Euro (EUR) against the US Dollar (USD). This could lead to upward momentum for the EUR/USD currency pair.
US Dollar Weakens Amid Election Uncertainty, Boosting EUR/USD Pair
On the US front, the broad-based US dollar edged lower on the day as uncertainty grows ahead of the US presidential election on Tuesday and the Federal Reserve's (Fed) monetary policy meeting on Thursday.
The US Dollar Index (DXY) fell below 103.70 as market participants anticipated a close race between former President Donald Trump and current Vice President Kamala Harris. However, the recent poll showed Harris leading Trump by three points in Iowa, which is significant since Trump won the state easily in the past two elections.
Traders think that if Trump wins, it could boost the US dollar and Treasury yields. This is because he wants to raise tariffs and cut taxes, which could lead to higher inflation and prompt the Federal Reserve to tighten its monetary policy.
On the other hand, if Harris wins, it is seen as a continuation of current policies, which would benefit risk-sensitive currencies. Regarding the Fed's upcoming meeting, traders expect a rate cut of 25 basis points, bringing rates down to between 4.50% and 4.75%.
Investors are also looking forward to the release of the ISM Services Purchasing Managers’ Index (PMI) for October, which is projected to show slower growth than the previous month.
Therefore, the US dollar's decline, driven by election uncertainty and expectations of a rate cut, is likely to support the Euro (EUR) against the US dollar (USD), pushing the EUR/USD pair higher.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.08958, up 0.59% on the day, as it moves just below a key pivot level at $1.09022. This pivot is a critical indicator for the pair’s potential direction. Immediate resistance lies at $1.09128, followed by higher resistance levels at $1.09231 and $1.09316.
A break above these levels would suggest continued bullish momentum, supported by an RSI reading of 61, indicating that the pair is approaching overbought territory. However, if EUR/USD manages to surpass the 1.09128 resistance, it could attract further buying interest.
On the downside, immediate support is found at $1.08845, with additional support at $1.08695 and a more substantial base at $1.08578, just above the 50-day Exponential Moving Average (EMA) of $1.08677.
The 50 EMA serves as a strong support level and could stabilize the pair if selling pressure increases. Current market sentiment remains influenced by the Eurozone’s economic outlook and dollar movements, with investors watching closely for cues from both the European Central Bank and the U.S. Federal Reserve.
Traders should consider the pivot point at $1.09022 as the deciding factor; a break below may signal selling opportunities, targeting $1.08770. Conversely, a sustained move above $1.09128 could reinforce a bullish trend, with the potential to reach higher resistance levels.
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GOLD Price Analysis – Nov 01, 2024
Daily Price Outlook
Gold price (XAU/USD) extended its bullish rally and drew some further bid around $2,757 level on Friday. However, the ongoing uncertainties surrounding the US presidential election and long-lasting tussle in the Middle East have played a major role in underpinning gold prices.
This is because gold is seen as a safe-haven asset, meaning investors turn to it during times of uncertainty and instability to protect their wealth.
Although, the upticks in the gold could be limited as the rising US Treasury bond yields and a stronger US Dollar put downward pressure on gold prices.
Moving ahead, traders are now looking ahead to the US employment report for October, which will be released on Friday. This report includes key figures like Nonfarm Payrolls (NFP), the Unemployment Rate, and Average Hourly Earnings.
US Dollar Faces Downward Pressure Amid Inflation Data and Rate Cut Expectations
On the US front, the broad-based US dollar failed to sustain its upward trend and face mild downward pressure following recent inflation data. The Personal Consumption Expenditure Price Index (PCE), a key measure of inflation, rose by 2.1% year-on-year in September, slightly lower than August's 2.2%.
This result matched what many experts expected. Meanwhile, the core PCE, which excludes food and energy prices, increased by 2.7%, the same as the previous month and higher than the anticipated 2.6%.
As a result, the expectation that the Federal Reserve might lower interest rates by 25 basis points in the upcoming November and December meetings could further weaken the dollar, as lower rates typically make a currency less attractive to investors seeking returns.
Investors are now looking ahead to the Nonfarm Payrolls (NFP) report, which will provide more insight into the job market. The report, set to be released on Friday, is expected to show that the US economy added 113,000 jobs in October, with the unemployment rate likely holding steady at 4.1%.
If job additions fall short of expectations, it could reinforce concerns about the economy and lead to an even weaker dollar. This situation could bolster gold prices, as many investors view gold as a safe haven during times of economic uncertainty.
Gold Gains Momentum Amid US Election Uncertainties and Middle East Tensions
The safe-haven yellow metal has been gaining momentum as the uncertainties surrounding the US presidential election and ongoing tensions in the Middle East forced Investors to turn to gold because it is seen as a safe investment.
As per the latest report, Israel is currently on high alert for a possible response from Iran, which may react to Israel's recent attacks before the US presidential election.
Meanwhile, US officials are visiting the Middle East to stop any retaliation from Iran and to find ways to solve the ongoing problems in Lebanon and Gaza.
However, they are not sure if these efforts will result in a break from fighting before the election. In Lebanon, there are hopes for a ceasefire between Israel and Hezbollah, but fighting is still happening.
However, the Israeli military recently attacked areas in Beirut after Hezbollah fired rockets that killed seven people in Israel, including four workers from Thailand. In Gaza, Israeli recent airstrikes have caused at least 13 deaths and many injuries, worsening the situation in the region.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) continues its cautious ascent, currently trading around $2,755.03, as it inches closer to the immediate resistance at $2,760.76. This level, marked by a convergence of previous highs and the 50-day EMA at $2,770.84, serves as a pivotal zone.
A sustained break above this point could push gold toward the next resistance at $2,767.44, followed by a potential test of $2,777.25, reflecting strengthened bullish momentum. However, if gold fails to clear $2,760.76, it may signal consolidation or a mild retracement.
On the downside, immediate support is found at $2,745.14, near recent consolidation lows. Should selling pressure increase, further support awaits at $2,731.38, with a deeper floor at $2,719.66, where buyers may re-emerge.
The RSI currently sits at 48, suggesting neutral momentum but tilting slightly toward oversold, which could attract short-term buyers if support levels hold.
Overall, the market tone remains cautiously bullish, as gold's resilience near $2,753.75—a key pivot point—indicates underlying demand. However, gold’s upward potential hinges on its ability to break through the 50-day EMA resistance.
Gold’s path forward will likely hinge on broader market sentiment and its ability to clear key resistance at $2,760.76, a test that could set the tone for the week.
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EUR/USD Price Analysis – Nov 01, 2024
Daily Price Outlook
Despite the positive Eurozone data, the EUR/USD currency pair struggled to maintain its upward momentum, declining from a fresh two-week high to around 1.0855 on Friday. This downturn can be attributed to a rebound in the US Dollar, fueled by upbeat US economic data.
Meanwhile, investors seem cautious ahead of the upcoming US Nonfarm Payrolls (NFP) and the ISM Manufacturing Purchasing Managers’ Index (PMI) data for October, set to be released in the New York session.
Conversely, the shared currency has performed well against other currencies, bolstered by faster-than-expected Eurozone GDP growth in the third quarter and inflation data that exceeded forecasts. These developments have led traders to reassess expectations regarding larger-than-usual rate cuts by the European Central Bank (ECB) at its December policy meeting. This reassessment has been a key factor in limiting deeper losses for the EUR/USD pair.
EUR/USD Outlook Amid Eurozone Growth and US Dollar Recovery
On the EUR front, the shared currency maintains its bullish trend but failed to keep the EUR/USD pair above its two-week high and lost traction due to a recovery in the US Dollar.
However, the shared currency has shown strong performance against other currencies, supported by several factors including faster-than-expected Eurozone GDP growth of 0.9% in the third quarter and higher-than-expected inflation. This have led traders to rethink their expectations for larger rate cuts by the European Central Bank (ECB) in December.
According to Eurostat, the Eurozone economy grew faster than last quarter, mainly thanks to a strong showing from Germany. This growth reduces the chances of an immediate economic downturn, though uncertainty remains ahead of the upcoming US presidential election.
If former President Donald Trump wins against current Vice President Kamala Harris, Eurozone exports may be affected, as Trump has proposed a universal 10% tariff on all nations, except China, which would face even higher tariffs. Additionally, inflation in the Eurozone increased to 2% in October, up from 1.7% in September, further supporting the euro.
Therefore, the stronger euro from positive GDP growth and rising inflation supports the EUR/USD pair. However, the US Dollar's recovery and potential trade tariffs from a Trump presidency create uncertainty, limiting the euro's ability to maintain gains above the recent high.
Impact of US Economic Data on EUR/USD Pair
On the US front, the broad-based US Dollar regained its ground as investors showed caution ahead of the upcoming US Nonfarm Payrolls (NFP) and ISM Manufacturing Purchasing Managers’ Index (PMI) data for October. Economists expect the US economy to have added 113,000 jobs, significantly lower than the 254,000 increase seen in September.
In the meantime, the unemployment rate is predicted to remain steady at 4.1%. These employment figures are crucial since they could affect market expectations about the Federal Reserve's interest rate decisions.
Traders are largely pricing in a 25 basis point rate cut at the Fed’s next meeting on Thursday. However, the NFP data could impact the outlook for the December meeting. If payroll data is stronger than expected, it may reduce bets on rate cuts, while weaker numbers could boost them.
Investors are also focusing on Average Hourly Earnings data for October, which is expected to show a 0.3% month-on-month increase, slower than September’s 0.4%. Additionally, the ISM Manufacturing PMI is projected to rise slightly to 47.6, indicating ongoing contraction but at a slower pace.
Therefore, the US Dollar's recovery, coupled with weaker-than-expected job growth forecasts, puts downward pressure on the EUR/USD pair. If the Nonfarm Payrolls data is strong, it could strengthen the Dollar further, leading to additional declines in the EUR/USD pair.
EUR/USD – Technical Analysis
EUR/USD is experiencing slight downward pressure, currently trading at $1.08743, a modest 0.08% decline. The pair hovers around the pivot point of $1.08881, which serves as a key indicator for short-term direction.
Immediate resistance is seen at $1.08992, and should this level be breached, the next resistance targets lie at $1.09105. A sustained break above these levels would likely signal stronger bullish momentum, potentially propelling EUR/USD further up.
Conversely, if the pair fails to rise above $1.08881, it could dip towards immediate support at $1.08611. Further downside targets include $1.08456 and $1.08315, where buying interest might emerge.
The RSI is currently at 54, suggesting a balanced momentum with no strong bias in either direction. Meanwhile, the 50-day EMA sits at $1.08580, providing additional support in the event of further declines.
Given the technical landscape, a tactical entry above $1.08701 could offer potential gains, targeting $1.08988 with a conservative stop loss at $1.08518. This setup offers an opportunity to capture gains if the euro stabilizes and tests higher levels.
This technical outlook suggests a cautiously bullish approach for EUR/USD, with close attention to the pivot point at $1.08881 as the key level that may determine near-term direction.
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S&P500 (SPX) Price Analysis – Nov 01, 2024
Daily Price Outlook
The global market sentiment has turned bearish, as evidenced by the S&P 500's sharp decline to 5,702.45, down 1.86%. This marks its largest one-day drop since September 3. In addition to this, Nasdaq Composite also faced losses, falling 2.76% to close at 18,095.15.
However, this downturn can be attributed to disappointing earnings reports from major tech companies like Microsoft and Meta Platforms. Apart from this, the ongoing uncertainty surrounding the upcoming U.S. Presidential election has further impacted market confidence and contributed to the losses.
Geopolitical Uncertainty and Market Volatility Impacting S&P 500 Performance
On the geopolitical front, Investors are increasingly concerned about rising tensions, especially with Israel on high alert for a possible Iranian response following its recent attacks.
Meanwhile, U.S. officials are visiting the Middle East to stop Iran from retaliating and to address problems in Lebanon and Gaza, but there is doubt about whether these efforts will ease tensions before the election. These geopolitical tensions are weighing heavily on market sentiment, leading to increased volatility and declines in major indexes like the S&P 500.
Economic Uncertainty and Mixed Data Weigh on S&P 500 Performance
The S&P 500 has shown bearish performance, influenced also by the recent release of Personal Consumption Expenditures (PCE) data on Thursday. Meanwhile, the market remains cautious ahead of the upcoming U.S. presidential election, which is adding to the uncertainty.
Traders are now waiting for the Nonfarm Payrolls (NFP) report set to be released on Friday, with expectations that the U.S. economy added 113,000 jobs in October and the unemployment rate will hold steady at 4.1%.
On the data front, the PCE Price Index indicated a year-over-year rise in core inflation of 2.7% in September, which may keep investors on edge. Furthermore, Initial Jobless Claims dropped to a five-month low of 216,000, signaling a resilient labor market.
However, this mixed data does little to boost market confidence, especially with the U.S. GDP growing at an annualized rate of 2.8% in Q3, falling short of the 3.0% growth anticipated.
Meanwhile, the ADP Employment Change report showed a robust addition of 233,000 jobs in October, the decline in JOLTS Job Openings to 7.443 million in September, below expectations, adds to the negative sentiment impacting the S&P 500.
As a result, the S&P 500 index is feeling the heat from economic uncertainty, mixed signals in the labor market, and ongoing inflation worries. This has left investors feeling cautious as they look ahead to important economic reports and the upcoming presidential election.
S&P 500 – Technical Analysis
The S&P 500 (SPX) has seen a notable decline, currently trading around 5,705.44, down 1.86% as bearish momentum persists. The index faces strong resistance near 5,765.05, a key pivot point aligning with recent highs.
Should the S&P 500 manage to break above this level, it could target the next resistance at 5,798.37, with an upper threshold near 5,825.90. However, with the 50-day EMA positioned at 5,809.62 and downward pressure evident, the index may struggle to regain bullish traction in the near term.
On the support side, immediate support rests at 5,696.93, with further support levels at 5,675.11 and 5,649.97. The RSI has dipped to a low 21, signaling oversold conditions that could potentially attract short-term buying interest. Yet, the overall technical setup remains weak, as the index struggles below the 50-day EMA, reflecting a bearish bias.
For traders looking to capitalize on this trend, an entry below 5,730 could provide a viable short position, with profit-taking opportunities around 5,675, and a stop loss set at 5,764 to manage risk. As market sentiment remains fragile, further downside appears likely unless key resistance levels are breached.
Given these conditions, the S&P 500’s outlook remains tilted to the downside, with a strong test of support likely in the days ahead.
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