Markets were mostly quiet last week, with little news to move prices. U.S. stocks rose, while gold stayed under pressure as expectations of higher U.S. interest rates kept the dollar strong. The Fed’s September meeting minutes showed that most officials expected another rate increase by year-end because inflation remained high. U.S. consumer sentiment fell to 46.3 from 48.1, below the expected 47.8.
Oil prices fell midweek after news that the International Energy Agency would release oil reserves sooner than planned. Prices then jumped on Thursday after reports of more attacks on tankers in the Strait of Hormuz and possible further U.S. strikes against Iran.
In Japan, Prime Minister Sanae Takaichi tried to ease concerns about government finances. The 10-year government bond yield fell to 3.01% from 3.09%. USDJPY continued to move higher, but traders were cautious about possible Japanese intervention to strengthen the yen.
Markets This Week
U.S. Stocks
The Dow held support from earlier this month, bringing buyers back into the market. It closed above its 10-day moving average, which is starting to rise. Markets seem to have already reacted to higher U.S. interest rates, so buying weakness looks like the best strategy this week. Resistance is at 52,000, 52,700, 53,000, 53,750, 54,000 and 54,500. Support is seen at 51,000, 50,000 and 49,000.
Japanese Stocks
The Nikkei met resistance around 70,000 as the market paused after recent gains. Strong support near the rising 10-day moving average suggests it could move higher this week. Following the uptrend by buying near the 10-day moving average looks like the best strategy. Resistance is at 70,000, 71,000, 72,000 and 74,000. Support is at 68,000, 67,000, 66,000, 65,000, 64,000 and 63,000.
USD/JPY
USDJPY had another quiet week, staying close to 158 as buying and selling remained balanced. The gap between U.S. and Japanese interest rates continues to attract buyers. The outlook remains positive, suggesting buying weakness is the preferred strategy. This week’s U.S. inflation data will be closely watched to see whether the pair can break out of its narrow range. Resistance is at 158.50, 159.00 and 160.00 while support is at 157.50, 157.00, 156.00, 155.00, 153.00, 152.50 and 152.00.
Gold
Gold fell for most of last week as the U.S. dollar stayed strong and traders adjusted to expectations of further U.S. interest rate increases. Prices reached their lowest level since early August midweek, attracting long-term buyers and encouraging sellers to take profits. The close above the 10-day moving average is a positive sign. With higher interest rates now priced in, the recent downtrend may have ended, suggesting a focus on buying opportunities this week. Resistance is at $4,220, $4,250, $4,400, $4,500 and $4,600, while support is at $4,150, $4,125, $4,100 and $4,065.
Crude Oil
WTI remains volatile and continues to test lower levels as increased supply is offset by further unrest in the Middle East, making prices difficult to predict. The chart still looks bearish, with the 10-day moving average pointing lower. With Trump continuing to seek a way to end the war, lower prices look more likely over the short to medium term. Resistance is at $95, $100, $105, $110 and $115, while support is at $90, $85, $80, $75, and $67.50.
Bitcoin
Bitcoin fell as ETF investors took profits after the strong rise since August and the price failed to break above $87,000 resistance. Support held between $80,000 and $82,000 near previous highs, suggesting the market remains strong but needs time to settle after recent gains. Range trading may be the best approach this week. Resistance is at $88,000, $90,000, $95,000 and $100,000, while support is at $80,000, $75,000, $65,000, $62,000, $60,000, $55,000 and $50,000.
This Week’s Focus
Monday: Japanese holiday, U.S. holiday
- Tuesday: Japan PPI, Australia NAB Business Confidence and RBA Meeting Minutes, U.S. Existing Home Sales
- Wednesday: China CPI and PPI, U.S. CPI, US Leading Index and U.S. Beige Book
- Thursday: Australia Unemployment Rate, U.K. GDP, Trade Balance and Industrial Production, E.U. Industrial Production, U.S. Retail Sales, PPI and Business Inventories
- Friday: E.U. CPI and Trade Balance, U.S. Import Price Index, Export Price Index and Industrial Production
The week is likely to start quietly, with holidays in Japan and the U.S. The focus will be on U.S. CPI on Wednesday, followed by retail sales and PPI on Thursday. These reports will show whether inflation is still high and how rising prices are affecting consumer spending. Traders will also watch news from the Middle East and changes in oil prices. Strong U.S. data could push the dollar higher against the yen, raising the chance of Japanese authorities stepping in to support the yen.
