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USDCAD DAILY: Downtrend or retracement?
Jury is out following a pause above 1.3950Â (61.8% of 1.3731 => 1.4300) and a higher low (4 hour).
This leaves the focus on 1.4000 with resistance at 1.4045 and then 1.4081 needing to be taken out to make a case move down was a retracement.
Event risks: Reactions to Fed and BoC rate decisions on Wednesday.
XAUUSD 4 HOUR –Watch 4000
Bounce back above 4000 after a near double bottom at 3975 has cooled the downside but only back above 4044 (use 4050 as well) would break down momentum.
Otherwise, to state the obvious, 4000 will eventually dictate whether there are more legs to this downtrend
Deck is cleared of key sell stops unless 3975 is broken….
Market Update: Calm before the strom
It feels like markets are takiung a breather before the CB monetary policy decisions storm, giving stocks some relief while the dollar trades subdued.
EURUSD filling an opening week gap higher (that paused below 1.1232) but so far holding above 1.1200, which will eventually dictate its tone going forward. There seems to be some relief that France avoided a Moody’s sovereign debt downrade on Friday.
BTCUSD vs. ETHUSD (Daily)
BTCUSD and ETHUSD remain vulnerable, with next key chart support at 74,815 and 1,849, respectively.
However, Bitcoin’s recovery above 80,000 after a new low at 79,075 gives bulls some hope and at a minimum keeps 80,000 pivotal.
For Ethereum, 2,350 remains the pivotal level following its bounce back to that area from a new low at 2,275.
NAS100 DAILY (CFD) CHART UPDATE
The tech-heavy NAS100 is leading the equity sell-off and setting a risk-off tone, making it a key focus heading into the final trading week of October.
The daily chart shows a downtrend, with 28,755 key support. A firm break would put 28,000 on the radar, with a potential technical void extending toward 27,046. On the upside, resistance is at 29,150 and 29,415, while only a sustained move above 30,000 would fully negate the downside risk.
A full global economic calendar lies ahead this week, but central banks will take center stage. Wednesday brings policy decisions from the Federal Reserve, Bank of Canada and Reserve Bank of New Zealand, with the Fed expected to hold rates steady and the BoC and RBNZ expected to hike. The ECB follows on Thursday and the Bank of Japan on Friday, with both expected to leave rates unchanged.
The question is how policymakers weigh the current risk-off mood gripping global equities against rising crude oil prices. Falling stocks signal caution over growth and financial conditions, while higher energy costs threaten to keep inflation pressure alive, a difficult mix for central banks and another potential source of market volatility.
Market Update
EURUSD: Unable to shake a focus from 1.12 but upside likelu limited ahead of Moody’s France credit review after the close.
NAS100 (and US500) trying to find a footing and while 29K+ would cool the downside (use 29000-200), only above 29414 would confirm a break of momentum.
XAUUSD: Still focused on 4000, clearly a bias setter after extending low to 3975. This makes the close vs. 4000 the focus ahead of the weekend.
Market Update: US500 vs. NAS100 (4 HOUR CFD)
Stocks remain on the defensive but so far clinging to lows above/around key supports/targets at US500 7617 (low 7614) and NAS100 29755, (low 28820) significance being big voids below each. At a minimum, moves back above 7630-40 and/or 29000-200 would be needed to slow the risk, above 7673 and/or 29414 to neutralize it.
XAUUSD DAILY:Mission accomplished?
Is the brief break and stops run below 4000 and 3996 (low 3987) mission accomplished? While only time will tell as 4000 is clearly pivotal in dictating its tone going forward, a move back above 4066, at a minimum, would be needed to shift the focus away from it. A level bulls do not want to see broken is 3941.
Forex Market Snapshot
EURUSD: Unable to shake a focus from 1.12, currently trading below, as elevated French vs. German bond yield spreads and PMI misses (led by by France) weigh. 1.1150-80 needs to hold to keep the focus on 1.12 and away from the 1.1113 low. Event risk today: Moody’s French credit review (sometme after US markets close)
USDJPY: Remains on the defensive with the focus still on 157 (currently below it) after the overnight plunge paused just above 156. Watch US bond yields for any correlations.
GBPUSD: Retail Sales miss offset by PMI beat. Charts show a lower high off the 1.3419 top, making it dependent on 1.3350-55 holding to keep a bid and prevent down momentum from taking over. Note GBP lagging vs EUR duw to weak EURGBP.
Market Update: Yields slide
US bonds getting a safe haven bid as the lead NAS100 briefly breaks its low, leaving 29K blocking the key level at 28755.
The dollar elsewhere is off its highs as yields slide while USDJPY is off its low (but still well down on the day) after pausing above 156.64 in what should remain defensive trading.
