Sample Category Title

• GBPAUD broke resistance zone
• Likely to rise to resistance level 2.0000

GBPAUD currency pair recently broke the resistance zone located between the resistance level 1.9700 (former multi-month high from September) and the 61.8% Fibonacci correction of the downward impulse from August.

The breakout of this resistance zone accelerated the impulse wave (C) of the primary ABC correction 2 from the start of October.

GBPAUD be expected to rise further in the active impulse wave (C) toward the next round resistance level 2.0000 (which stopped the sharp upward impulse wave (5) in August).

Markets

The busy eco calendar kicked off today with US JOLTS job openings and consumer confidence. The former missed the bar. The August reading was revised down from 8.04mln to 7.86mln and job vacancies came down further in September to 7.44mn, way off the 8mn mark. It was the lowest reading since early 2021 and for the first time this cycle dropped below the pre-pandemic high (7.6 mn). Given the Fed’s sensitivity towards the labour market and employment, US yields in a kneejerk reaction wiped out (almost) all of the intraday gains (5-7 bps). The larger-than-expected improvement in consumer confidence halted the move though. The Conference Board indicator in October jumped from 99.2 to 108.7 vs 99.5 expected. It’s the highest level since January of this year. Joe Sixpack turned more optimistic on the current situation (123.8 to 138) and sees a rosier future ahead. The expectations component (from 82.8 to 89.1) recovered to levels not seen since December 2022. The chief economist at the Conference Board noted that “views on the current availability of jobs rebounded after several months of weakness, potentially reflecting better labor market data.” US yields currently still add between 0.4-2 bps in a small steepening of the curve. German Bunds underperform with yields adding 2.5-4 bps in a similar curve shift. UK gilt yields eke out a few bps as well ahead of tomorrow’s long-awaited budget proposal. The 2-yr yield is currently testing a 5-month high, the 10-yr is setting one. US data and technical support areas nearby allowed EUR/USD to recover from a low around 1.077 to back above 1.08. USD/JPY holds steady around 153.3, keeping DXY in place as well at 104.41. Sterling’s audacious attempt to seize the EUR/GBP 0.83 big figure failed for the time being. EUR/GBP is nonetheless down for the day (0.831).

The Slovak Republic launched a new 7-yr syndication (Nov 6, 2031) deal today. With their second and final syndication of the year following a €3bn 10-yr deal in March they raised €2bn, priced at MS+70 bps (compared to MS+90 area initial guidance). Books ran above €7.5bn. Via multiple regular and a special auction in February, Ardal also raised €7.2bn year-to-date. Combined with a small FX-deal (CHF; €0.65bn), the total raised so far amounts to €12.85bn. The original long-term funding target from the start of the year stood at €13bn (€5bn redemptions, €7.6bn deficit) but could be revised lower due to a lower cash deficit (+/- €5.8bn). Part of today’s proceeds could therefore be used in prefunding for next year. The 2025 funding target will be €12-13bn stemming from €6.5bn bond redemptions and a forecasted deficit of €6.4bn. Ardal targets to raise €6bn via regular monthly auctions and €6bn via syndications.

News & Views

News agency Reuters reports that China is mulling approving the issuance of over CNY 10tn in extra debt in the next few years. It would be split between CNY 6tn of special sovereign bonds and CNY 4tn worth of special-purpose bonds for idle land and property purchases over the next 5 years. China’s NPC is looking to approve the fresh fiscal package on the last day of the November 4-8 meeting. In case Donald Trump wins a second term in office, Beijing may even decide on a stronger fiscal package according to sources. Under impulse of dollar strength, USD/CNY rose to its strongest level since the end of August (USD/CNY 7.14).

The Swedish Riksbank published its new Business Survey today. The general tone is that it’s hard to see any improvement in the near term. The manufacturing industry no longer believes that the economy will improve in the near future, and optimism in the retail trade sector has also declined compared with the spring. The export industry is feeling the effects of weaker demand from the rest of the world, which is reflected in the continued fall in new orders. The construction sector believes that it will take even longer to see a clear upturn in the demand for housing. Weak demand is putting pressure on selling prices. The fact that inflation and interest rates have fallen suggests that the wage bargaining rounds will not get out of hand. Today’s Business Survey strengthens the case for a 50 bps Riksbank rate cut at the next, November 7, meeting. EUR/SEK is unmoved near 11.50, the weakest SEK level since mid-August.

The Dollar Index stabilised in the 0.5% range for the fifth session, quietly finding its feet after a near 5% rally over the past thirty days. Since last week, currency market participants have taken a wait-and-see approach after four weeks of gains that fundamentally changed the dollar’s technical picture. However, a blockbuster of major news by the end of next week could strengthen or reverse the current trend.

Firstly, the dollar steadied as market expectations settled around the Fed’s key rate outlook. From the end of September to the 10th of October, the market oscillated between expectations of a 50-basis point cut and a 20% chance of no change. However, in the last two weeks, there has been growing confidence in a 25-point easing, leaving about a 10% chance of no change. There is also a 30% chance that the Fed will only cut rates by 25 basis points before the end of the year. This is a hawkish scenario, attracting buyers of the dollar and sellers of long-term US Treasuries.

Several near-term events could dramatically affect market expectations. Until then, it is logical to expect a lull or pullback against the Dollar to take profits from earlier gains. The regular monthly US Non-Farm Payrolls report is due on Friday, but other labour market indicators will refine expectations later in the week and could influence prices. Hiring is expected to have slowed sharply, with only 111k jobs added in October, although Hurricane Milton will complicate the assessment of the economy in the outgoing month.

Next week’s presidential election will be in the spotlight until Wednesday. The dollar may feel a sense of relief when the results are announced, as it often weakens ahead of elections. The longer-term trend will depend on what the president-elect says. The risk of new tariffs is bullish for the dollar, while increased fiscal spending is bearish.

Later, the Fed will get into the game. The Fed has already entered a blackout period in which central bank officials will not comment on monetary policy until the meeting results are known. However, sentiment can be influenced by comments from influential journalists from the Wall Street Journal, Bloomberg, or the Financial Times, who many believe are familiar with the discussions or the real balance of power.

The DXY has a good chance of remaining in the 104.00-104.40 range until Friday or even retreating towards 103.5 as part of the correction of the previous rally. However, only a sustained consolidation below 102.7 would shift the primary outlook to a renewed dollar decline, with the potential to drop below 100 and beyond. A rally above 104.5 on the back of all the important news will make us consider the next stop at 106—the area of the highs of the last two years.

US Conference Board Consumer Confidence Index rose sharply from 99.2 to 108.7 in October, significantly surpassing the expected 98.9 and marking the highest monthly gain since March 2021. Although this increase keeps the index within its two-year range, it reflects a notable boost in consumer sentiment driven by improving views on the economy and labor market.

Present Situation Index, a gauge of consumers’ perceptions of current economic conditions, climbed 14.2 points to 138.0, highlighting a strong rebound in how Americans view the job market and business environment.

Additionally, Expectations Index rose 6.3 points to 89.1, moving well above the recession-warning threshold of 80, indicating that consumers are increasingly positive about future economic conditions.

Dana M. Peterson, Chief Economist at The Conference Board, noted that October’s data saw improvements across all five components of the index. Consumers reported a more positive assessment of business conditions, reflecting recent labor market strength. Views on current job availability also improved, suggesting renewed optimism in employment prospects. Notably, consumers expressed greater optimism about future business conditions and income expectations, and for the first time since July 2023, showed cautious optimism regarding future job availability.

Full US consumer confidence release here.

Daily Pivots: (S1) 1.0787; (P) 1.0807; (R1) 1.0833; More...

EUR/USD falls notably after rejection by 55 4H EMA (now at 1.0832), but stays above 1.0760 temporary low. Intraday bias remains neutral first. Further decline is expected as long as 1.0871 resistance holds. Below 1.0760 will target 61.8% retracement of 1.0447 to 1.1213 at 1.0740. Firm break there will target 1.0601 support next. However, considering bullish convergence condition in 4H MACD, break of 1.0871 will indicate short term bottoming, and turn bias back to the upside for 55 D EMA (now at 1.0956).

In the bigger picture, price actions from 1.1274 (2023 high) are seen as a consolidation pattern to up trend from 0.9534 (2022 low), with fall from 1.1213 as the third leg. Downside should be contained by 50% retracement of 0.9534 (2022 low) to 1.1274 at 1.0404, to bring up trend resumption at a later stage.

Daily Pivots: (S1) 1.2940; (P) 1.2971; (R1) 1.3001; More...

GBP/USD is still bounded in consolidation above 1.2906 and intraday bias stays neutral. Further decline is expected as long as 1.3070 minor resistance holds. Below 1.2906 will target 61.8% retracement of 1.2298 to 1.3433 at 1.2732. However, considering bearish divergence condition in 4H MACD, firm break 1.3070 resistance will indicate short term bottoming, and turn bias back to the upside for stronger rebound.

In the bigger picture, considering mildly bearish divergence condition in D MACD, a medium term top is likely in place at 1.3433 already. Price actions from there are seen as correction to whole up trend from 1.0351 (2022 low). Deeper decline would be seen to 38.2% retracement of 1.0351 to 1.3433 at 1.2256, which is close to 1.2298 structural support. Strong support should be seen there to bring rebound.

Daily Pivots: (S1) 152.51; (P) 153.20; (R1) 153.98; More...

Intraday bias in USD/JPY remains on the upside as rise from 139.57 is in progress. Sustained trading above 61.8% retracement of 161.94 to 139.57 at 153.39 will pave the way to retest 161.94 high. On the downside, below 151.44 minor support will turn intraday bias neutral again first.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low). The range of medium term consolidation should be set between 38.2% retracement of 102.58 to 161.94 at 139.26 and 161.94. Nevertheless, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 0.8633; (P) 0.8667; (R1) 0.8686; More…

USD/CHF rebounded strongly after drawing support from 55 4H EMA (now at 0.8649), but stays below 0.8699 temporary top. Intraday bias remains neutral first. Further rally remains in favor as long as 55 D EMA (now at 0.8603) holds. On the upside, decisive break of 38.2% retracement of 0.9223 to 0.8374 at 0.8698 will argue that fall from 0.9223 has completed after defending 0.8332 low. Further rally should then be seen to 61.8% retracement at 0.8899 next.

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern, with fall from 0.9223 as the second leg. Strong support could be seen from 0.8332 to bring rebound. Yet, overall outlook will continue to stay bearish as long as 0.9243 resistance holds. Firm break of 0.8332, however, will resume larger down trend from 1.0146 (2022 high).

Dollar extended its broad gains today, bolstered by the jump in US 10-year Treasury yield, which surpassed 4.3% as expectations grow for an expansive fiscal agenda following the US presidential election. In parallel, Bitcoin has surged past 70K for the first time since June, driven by speculation that post-election developments could accelerate efforts to expand the US cryptocurrency market and clear regulatory paths for broader crypto adoption.

Amid Dollar’s rally, British Pound stands out as the only major currency to hold resilient. In contrast, Australian Dollar and Swiss Franc are today’s weakest performers. For Aussie, traders are eyeing tomorrow’s crucial CPI data, hoping for progress in disinflation that would support RBA’s shift towards a more neutral stance on inflation. Yen remains weak, with a close watch on whether Japanese officials might intervene if USD/JPY nears the next psychological level at 155.

Technically, further rally is expected in Bitcoin as long as 69514 resistance turned support holds. Decisive break of 73812 high will confirm long term up trend resumption. Next near term target will be 100% projection of 52703 to 66854 from 58846 at 81742.

In Europe, at the time of writing, FTSE is down -0.15%. DAX is up 0.18%. CAC is up 0.19%. UK 10-year yield is up 0.039 at 4.303. Germany 10-year yield is up 0.048 at 2.338. Earlier in Asia, Nikkei rose 0.77%. Hong Kong HSI rose 0.49%. China Shanghai SSE fell -1.08%. Singapore Strait Times rose 0.18%. Japan 10-year JGB yield rose 0.0021 to 0.977.

US goods trade deficit widens to USD -108.2B vs exp USD -96.1B

US goods exports fell USD -3.6B or -0.2% mom to USD 174.2B in September. Goods imports rose USD 10.4B or 3.8% mom to USD 282.4B. Trade deficit widened from USD -94.2B to USD -108.2B, larger than expectation of USD -96.1B.

Wholesale inventories fell -0.1% mom to USD 905.0B. Retail inventories rose 0.8% mom to USD 824.3B.

Germany’s Gfk consumer sentiment rises to -18.3, remains fragile

Germany’s GfK Consumer Climate index for November improved from -21.0 to -18.3, exceeding forecast of -20.5 and marking its highest level since April 2022. However, the underlying sentiment remains subdued, as economic expectations continued to trend downward for the third consecutive month, dropping -0.5 to -0.2, the lowest level since March.

Rolf Bürkl, consumer expert at the NIM, cautioned that while consumer sentiment has improved, it remains historically low due to persistent uncertainties driven by "crises, wars and rising prices".

He noted that rising company insolvencies, job cut plans, and discussions around shifting production abroad are "preventing a more significant recovery in consumer sentiment."

Japan’s unemployment rate falls to 2.4%, job availability remains strong

Japan’s unemployment rate fell from 2.5% to 2.4% in September, below expectations of 2.5%.

While the total number of employed individuals declined slightly by -0.1% to seasonally adjusted 67.82m, the number of unemployed fell -2.3% to 1.68m, marking the second consecutive monthly decrease.

Additionally, job availability ratio rose 0.01 to 1.24, meaning there were 124 job openings for every 100 job seekers, reflecting strong demand for labor.

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 0.8633; (P) 0.8667; (R1) 0.8686; More…

USD/CHF rebounded strongly after drawing support from 55 4H EMA (now at 0.8649), but stays below 0.8699 temporary top. Intraday bias remains neutral first. Further rally remains in favor as long as 55 D EMA (now at 0.8603) holds. On the upside, decisive break of 38.2% retracement of 0.9223 to 0.8374 at 0.8698 will argue that fall from 0.9223 has completed after defending 0.8332 low. Further rally should then be seen to 61.8% retracement at 0.8899 next.

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern, with fall from 0.9223 as the second leg. Strong support could be seen from 0.8332 to bring rebound. Yet, overall outlook will continue to stay bearish as long as 0.9243 resistance holds. Firm break of 0.8332, however, will resume larger down trend from 1.0146 (2022 high).