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Daily Pivots: (S1) 1.0793; (P) 1.0833; (R1) 1.0854; More...

Intraday bias in EUR/USD stays neutral first and consolidations from 1.0810 temporary low could extend. But outlook will remain bearish as long as 1.0954 resistance holds. Below 1.0810 will resume the fall from 1.1213 to 61.8% retracement of 1.0447 to 1.1213 at 1.0740. Firm break there will target 1.0601 support next.

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) 0.8642; (P) 0.8653; (R1) 0.8673; More…

Intraday bias in USD/CHF remains neutral as consolidations continues below 0.8668 temporary top. Further rally is expected as long as 0.8548 resistance turned support holds. Above 0.8668 will target 38.2% retracement of 0.9223 to 0.8374 at 0.8698. Sustained break there will argue that fall from 0.9223 has completed at 0.8374, 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).

Daily Pivots: (S1) 149.66; (P) 150.27; (R1) 151.46; More...

Intraday bias in USD/JPY remains on the upside, as rise from 139.57 is in progress. Next target is 61.8% retracement of 161.94 to 139.57 at 153.39. On the downside, below 149.08 minor support will turn intraday bias neutral again. But still, further rally is in favor as long as 146.48 resistance turned support holds, in case of retreat.

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 now 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.

Sterling weakened broadly in a subdued trading today, with no significant data releases to drive market activity. Investors are awaiting BoE Governor Andrew Bailey's upcoming speech, where he might reaffirm a dovish tone. Earlier this month, in an interview with The Guardian, Bailey hinted at the possibility of becoming “a bit more activist” and cutting interest rates more aggressively if inflationary pressures continue to ease. The lower-than-expected UK CPI reading in September has lent weight to his stance. However, hawkish members within the BoE may push back on aggressive cuts if this week’s PMI data show persistent strength in the economy.

In the broader forex market, Dollar continues to lead as the strongest performer this week so far, buoyed by the surge in US Treasury yields. Swiss Franc follows behind, while Canadian Dollar is awaiting tomorrow’s BoC rate cut decision. Meanwhile, Japanese Yen remains the weakest currency, although selling pressure has not gained significant momentum. Sterling is the second weakest, ahead of Euro. Australian and New Zealand Dollars are trading in the middle.

Technically, if Sterling's decline deepens, attention will also turn to whether Euro follows suit. Specifically, EUR/CHF is a pair to watch. Break of 0.9332 support would extend the fall from 0.9506 towards 0.9305. Given the prior rejection by the 55 D EMA, EUR/CHF could also be on track for a retest of the 0.9209 low or even resumption of its long-term downtrend. Much of this could hinge on Thursday’s Eurozone PMI data.

In Europe, at the time of writing, FTSE is down -053%. DAX is down -0.28%. CAC is down -0.42%. UK 10-year yield is down -0.0143 at 4.130. Germany 10-year yield is up 0.017 at 2.307. Earlier in Asia, Nikkei fell -1.39%. Hong Kong HSI rose 0.10%. China Shanghai SSE rose 0.54%. Singapore Strait Times fell -0.75%. Japan 10-year JGB yield rose 0.0181 to 0.980.

New Zealand's exports rise 5.2% yoy in Sep, imports fall -0.9% yoy

New Zealand's trade balance in September 2024 showed a deficit of NZD -2.1B. Goods exports rose by NZD 246m, or 5.2% yoy, reaching NZD 5.0B. Meanwhile, goods imports fell by NZD -67m, or -0.9% yoy, to NZD 7.1B.

Export data showed mixed performance across key trading partners. Exports to China dropped significantly by NZD -109m (-8.8%), and Japan saw a decline of NZD -22m (-8.2%). Exports to Australia also fell NZD -7m or -0.9%. However, exports to the EUR surged by NZD 183m (67%), while exports to the US also increased by NZD 11m (1.9%).

On the import side, the decline was driven by a significant drop in imports from China, down by NZD -158m (-9.8%). Imports from the US surged, rising NZD 330m (51%), while imports from Australia and the EU saw marginal gains of 0.9% and 1.1% respectively. South Korea’s imports fell by NZD -45m (7.3%).

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.2955; (P) 1.3007; (R1) 1.3036; More...

GBP/USD's fall 1.3433 resumed by breaking 1.2973 temporary low and intraday bias is back on the downside. Sustained trading below 1.3000 cluster support (38.2% retracement of 1.2298 to 1.3433 at 1.2999) will argue that whole rise from 1.2298 has completed and bring deeper fall to 61.8% retracement at 1.2732. On the upside, break of 1.3070 minor resistance will turn bias back to the upside for stronger rebound.

In the bigger picture, considering mildly bearish divergence condition in D MACD, decisive break of 1.3000 support will suggest that a medium term top is already formed at 1.3433. Price actions from there would be tentatively seen as correcting the up trend from 1.0351 (2022 low). In this case, deeper fall would be seen to 1.2298 structural support, strong support should be seen there to bring rebound.

Daily Pivots: (S1) 1.2955; (P) 1.3007; (R1) 1.3036; More...

GBP/USD's fall 1.3433 resumed by breaking 1.2973 temporary low and intraday bias is back on the downside. Sustained trading below 1.3000 cluster support (38.2% retracement of 1.2298 to 1.3433 at 1.2999) will argue that whole rise from 1.2298 has completed and bring deeper fall to 61.8% retracement at 1.2732. On the upside, break of 1.3070 minor resistance will turn bias back to the upside for stronger rebound.

In the bigger picture, considering mildly bearish divergence condition in D MACD, decisive break of 1.3000 support will suggest that a medium term top is already formed at 1.3433. Price actions from there would be tentatively seen as correcting the up trend from 1.0351 (2022 low). In this case, deeper fall would be seen to 1.2298 structural support, strong support should be seen there to bring rebound.

The Canadian dollar is unchanged on Tuesday. In the European session, USD/CAD is trading at 1.3831 at the time of writing. The Canadian dollar is under pressure and is having a miserable October, down 2.2%.

BoC expected to chop rates by 50 bps

The Bank of Canada makes its next interest rate decision on Wednesday and the central bank is widely expected to cut rates for a fourth time this year. Will the BoC deliver a modest 25-basis point cut as in previous meetings, or opt for an aggressive 50-bp cut?

The markets anticipate an oversized 50bp cut, as economic growth has been weak, wage growth remains high and inflation is heading lower. Inflation dropped to 1.6% y/y in September, below expectations and moving back below the BoC’s target of 2% for the first time in three years.

With inflation largely contained, the BoC is keeping a close eye on the employment front, but that has made the rate path more complicated. The September employment report showed a strong increase in job growth and a drop in unemployment. The strong job numbers indicate that the labor market remains in decent shape and supports a smaller 25-bps cut.

BoC policymakers will have to decide on the size of the cut and may face the same dilemma at the following meeting in December. The current cash rate of 4.25% is too high and although the BoC has trimmed the rate by 75 bp this year, more needs to be done to boost the economy. The key question is how aggressive will the BoC be in its rate-cutting cycle, which will continue well into 2025.

USD/CAD Technical

• USD/CAD tested support at 1.3827 earlier. Below, there is support at 1.3805
• 1.3855 and 1.3877 are the next resistance lines

• EURJPY still consolidating but immediate bias is bullish
• Major resistance area lies ahead

EURJPY has been trading within a narrow sideways range since early October, but the immediate bias has turned positive over the last couple of sessions. The stochastic oscillator is trending upwards, while the RSI is slightly above its 50 neutral level.

The price reached a two-month intra-day peak of 163.65 earlier on Tuesday before pulling back, reflecting a very weak upside momentum. But even if the bulls manage to stay in control and plough ahead, getting past the 164.45-165.00 region will be very difficult.

The 200-day simple moving average (SMA) is blocking the way at 164.46, while the 50% Fibonacci retracement of the July-August downleg stands at 164.90. Furthermore, the top of the Ichimoku cloud overlaps with the 50% Fibonacci, underscoring the significance of this resistance region.

Nonetheless, a successful breakout above 165.00 would shift the medium-term picture from neutral to bullish and clear the way towards the 61.8% Fibonacci of 167.38.

If, though, the bulls fail to make much progress and the positive momentum fades, there’s likely to be strong support around the 20-day SMA just above the 162.00 mark. Slipping below this level would bring the 50-day SMA under the spotlight at 160.81 before sellers turn their attention to the 23.6% Fibonacci of 159.34.

A drop beneath the 23.6% Fibonacci would also take the price below the Ichimoku cloud, risking a return to the bearish phase.

In brief, EURJPY still has a chance of resuming its rebound from the September low, but reclaiming the crucial 165.00 handle will not be easy.

Cable is holding in extended consolidation around cracked psychological 1.30 support as larger bears are taking a breather for consolidation above key supports.

Near-term price action holds within daily Ichimoku cloud (spanned between 1.3063 and 1.2965) with consolidation range being capped by cloud top and falling 10DMA, which adds to bearish bias.

Negative momentum remains strong on daily chart and Tenkan/Kijun-sen diverged after creating bear-cross, maintaining downside pressure.

Bears eye key supports at 1.2960 zone (daily cloud base / Fibo 61.8% of 1.2864/1.3434 / 100DMA), firm break of which to generate strong bearish signal for continuation of larger downtrend from 1.3434 (2024 high of Sep 26) towards next targets at 1.2846 (Fibo 76.4%) and 1.2798 (200DMA).

Only sustained break above daily cloud would defer and open way stronger bounce.

Res: 1.3000; 1.3034; 1.3063; 1.3102
Sup: 1.2965; 1.2958; 1.2900; 1.2846

Silver revived last week and made a decisive move on Friday to renew multi-year highs. At the start of the new week, the price was above $34 per troy ounce, a level last seen in November 2012.

Since May this year, prices have pulled back several times, but silver broke through resistance at $32 and rose more than 7% on Friday, adding to Monday’s 1.3% gain.

The Relative Strength Index (RSI) has surged above 70 on the daily chart, indicating that silver may be approaching ‘overheated’ territory, particularly as RSI readings near 80. However, this range is also often accompanied by accelerating gains.

The next potential upside target for silver looks to be the $35 area, where the 2012 rally ended after the 2011 sell-off. However, a potential shakeout of short- and medium-term bullish positions in the $32–$35 range could pave the way for long-term buyers to step in decisively. This shift may set the stage for silver to target a new all-time high, potentially surpassing the $50 mark reached in April 2011.

Market Picture

Cryptocurrency capitalisation has corrected 1.8% over the past 24 hours to $2.34 trillion. However, these figures reflect a partial recovery from earlier lows of around $2.27 trillion earlier in the day. For now, this appears to be a case of profit-taking during the upward trend, but it’s worth keeping an eye on the market dynamics over the next few days.

Stablecoin volume has not increased since late September, setting up a potential pause in the growth of the broader cryptocurrency market, as stablecoins are often seen as liquidity for quick purchases of coins of interest. The previous growth momentum was from August to September, when the overall crypto market capitalisation pushed off the bottom.

The main reason for the entire crypto market’s subsidence seems to be Bitcoin, which the bears defended against an assault on the $70K level. They intensified selling at $69.5K early in the day on Monday and dropped the price to $66.5K on Tuesday morning.

News Background

According to CoinShares, global investment in cryptocurrency funds rose to $2.199 billion last week, following inflows of $407 million the week before. The figure was the highest in the last 13 weeks. Investments in Bitcoin rose by $2.134 billion, Ethereum by $58 million, and Solana by $2.4 million. Investments in multi-crypto asset funds decreased by $5 million.

Trading volume grew by 30%, and assets under management approached $100 billion.

According to Coinglass, total open interest (OI) in bitcoin futures reached a record $40.6 billion. In terms of coins, the figure was 592,000 BTC, the highest since December 2022.

The Bitcoin network’s hashrate updated the historical maximum. On October 19, it reached 791 EH/s for the first time, according to data from Cloverpool (formerly BTC.com), reflecting miners’ capacity build-up. The seven-day average hash rate reached 703 EH/s, according to Glassnode.

According to JPMorgan, US-listed public miners achieved a record 28.9% share of the global Bitcoin hashrate in October. Since the halving, these companies have increased their share by 8%, highlighting their ‘efficiency and financial advantages’.