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EURUSD back on the defensive
Weaker German IFO may have been a trigger for EURUSD selling after running into sellers and not stops at 1.1820.
Now dependent on 1.1762 holding to check the downside or 1.1750 and the 1.1726 low come on the radar.
In any case, 1.18 remains pivotal, upside limited unless regained.
EURUSD 1 HOUR CHART
Is it time for GOLD to take a pause?
As I have been saying, when in unchartered waters. big figures (round numbers) such as 3600, 3700,3800 increase in importance in the absence of any key resistance other than the new record high (3791).
BUT not all big figures should be treated the same. In this regard, 2500 and 3800 (not 3600 or 3700) are key pivotal big figures that can have an added influence on trading..
So keep an eye on 3800 as a failure to firmly take it out would force a pause while a break would raise talk of 4000.
Supports: 3735-50 block a return to 3700 (3750 = Power of 50 level).
Resistance: 3786-91 guard 3800
XAUUSD 1 HOUR CHART
Using my platform as a Heatmap shows…
… the dollar trading firmer after not following through on a softer close. This comes in a market struggling to come up with a common theme to drive trading after a period where expectations over Fed rate cuts was a hyper focus.
Pivotal levels: EURUSD 1.18, USDJPY 148, GPBUSD 1.35 setting respective tones.
In order of relative strenght vs. the USD
1. AUD
2. CAD
3. NZD
4. CHF
5. GBP
6. EUR
7. JPY
Canadian dollar hits 11-day low as interest rate spreads weigh
Key points:· Canadian dollar falls 0.2% against the greenback
· Touches its weakest since September 12 at 1.3849
· Price of U.S. oil settles 1.8% higher
· Bond yields edge lower across the curve
The Canadian dollar weakened to an 11-day low against its U.S. counterpart on Tuesday, as the Bank of Canada vowed to support the domestic economy and recent widening of interest rate spreads pressured the currency.
The loonie USDCAD was trading 0.2% lower at 1.3840 per U.S. dollar, or 72.25 U.S. cents, after touching its weakest intraday level since September 12 at 1.3849.
“It’s been a slow grind … but we haven’t materially moved out of the range that’s been in place since the middle of August,” said Amo Sahota, director at Klarity FX in San Francisco.
Recent widening of Canada-U.S. interest rate spreads has contributed to negative sentiment toward the loonie, Sahota added.
The Canadian 2-year yield was trading about 114 basis points below the equivalent U.S. rate, compared to a gap of 92 basis points near the end of August. Investors tend to favor the higher-yielding currency.
The Bank of Canada will support economic growth while ensuring inflation remains well controlled, Governor Tiff Macklem said, speaking less than one week after the central bank cut interest rates for the first time since March.
Investors see a roughly 50% chance the BoC will ease again at its next policy decision on October 29, overnight index swaps data showed. (0#CADIRPR)
The price of oil, one of Canada’s major exports, settled 1.8% higher at $63.41 a barrel after a deal to resume exports from Iraq’s Kurdistan stalled.
Canadian bond yields edged lower across the curve. The 10-year (CA10YT=RR) was down 0.7 basis points at 3.193%.
Fed’s Powell and Bowman stress job market fragility as more rate cuts loom
Federal Reserve Chair Jerome Powell on Tuesday reiterated the central bank’s delicate balancing act, stressing that policymakers are trying to navigate between their price stability and employment mandates following last week’s interest rate cut.
“Recent data show that the pace of economic growth has moderated,” Powell said in prepared remarks at the Greater Providence Chamber of Commerce’s economic outlook luncheon in Rhode Island, adding:
The unemployment rate is low but has edged up. Job gains have slowed, and the downside risks to employment have risen. At the same time, inflation has risen recently and remains somewhat elevated.
He added that clearer trade policy means tariffs will likely trigger only a “one-time pass-through” effect on inflation. That may be interpreted as a slight shift from earlier warnings that tariffs could fuel more sustained cost pressures in the second half of the year.
His comments echoed those of Vice Chair Michelle Bowman, who told the Kentucky Bankers Association’s annual convention on Tuesday: “The US economy has been resilient, but I am concerned about the weakening in labor market conditions and softer economic growth.”
Powell cautioned that there is no risk-free path for interest rates, with elevated inflation on one side and rising unemployment on the other. He suggested, however, that the Fed is increasingly inclined to prioritize its employment mandate.
US Stocks Trim Gains on Tech Pullback
US stocks erased early gains on Tuesday amid the pullback from heavyweight tech stocks, as markets continued to gauge whether artificial intelligence returns will meet expectations and assess the outlook on rates.
The S&P 500 and the Nasdaq 100 edged down from yesterday’s record while the Dow held above the headline.
Nvidia dropped nearly 3% to trim most of yesterday’s rally, which was sparked by its plans to invest up to $100 billion in Open AI. Companies with database operation exposure also fell, with Oracle and Amazon dropping 4% and 2%, respectively.
In the meantime, Kenvue jumped over 3% to trim losses from the prior session as investors reconsidered the impact of President Trump’s baseless criticism of the company’s drug, Tylenol.
Additionally, Boeing jumped more than 2% to lead the Dow after Trump said a new order from Uzbekistan Airways is worth $8 billion.
On the macroeconomic front, S&P PMIs pointed to slowing growth ahead of personal income and outlays data on Friday.
SPX Chart
NIO Inc. Stocks
As I warned on Sunday : After this rally of almost 40% , I wouldn’t be surprised to see a correction.
So correction it is.
6.85 lost, and Nio trying to regain it all back – 7.20 is capping this move for now.
It stays to be seen how deep Nio would go – with 5.50 as level that must not be reached and / or breached if we want to see another attack at 7.71 and possible break above it.
GBPUSD
Fiscal Risks Weigh on Sterling, BOE Rate Outlook Doesn’t HelpSterling has performed poorly recently due to concerns about U.K. fiscal risks, Deutsche Bank strategist George Saravelos says in a note. Sterling has failed to benefit from expectations of U.K. interest rates staying on hold, he says. Instead, there are signs investors are worried that the Nov. 26 U.K. budget could cause concurrent falls in both U.K. government bonds and sterling, he says. “There is a fine needle that needs to be threaded to avoid further sterling weakness, with tighter-than-expected fiscal policy leading to more central bank cuts being priced and easier policy an even greater risk premium.” Sterling trades at 0.8725 versus the euro, having earlier hit an 8-week low of 0.8745, LSEG data show.
Bitcoin struggles at $113K as Fed’s Bowman hints at faster rate cuts
Key points:
Bitcoin faces problems recovering from its dip to $112,000 as traders agree on the odds of a fresh dip.
Nasdaq Performance is on the radar as overheated RSI conditions raise concerns over a crypto knock-on effect.
A senior Federal Reserve official puts faster interest-rate cuts on the table.
Bitcoin BTCUSD attempted to flip $113,000 to support on Wednesday as traders buckled up for BTC price weakness into Q4.
New BTC price bottom targets include $108,000
The pair saw only a modest rebound from its slump to its lowest levels in nearly two weeks, with $111,600 currently support.
Last time, BTC lost this level which resulted in a capitulation. With Q4 coming, whales will try to push BTC below this level to create max pain.
US Stocks Extend Record Highs
US stocks were slightly higher on Tuesday to extend the record highs reached in the previous session with support from heavyweight tech stocks, as markets continued to assess future returns of artificial intelligence companies and the outlook on rates.
The Dow was 150 points higher, while the S&P 500 and the Nasdaq 100 inched above the flatline.
Nvidia inched lower after soaring 4% in the previous session as it unveiled plant invest as much as $100 billion in OpenAI. In the meantime, Kenvue jumped over 5% to recoup losses from the prior session as investors reconsidered the impact of President Trump’s baseless criticism of the company’s drug, Tylenol.
Additionally, Boeing jumped more than 2% to lead the Dow after Trump said a new order from Uzbekistan Airways is worth $8 billion.
On the macroeconomic front, markets awaited remarks from Federal Reserve Chair Powell ahead of personal income and outlays data on Friday.
DJI Chart
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