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Daily Pivots: (S1) 1.2976; (P) 1.2996; (R1) 1.3033; More...

GBP/USD dips notably today but stays in range above 1.2906, and intraday bias remains 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) 1.0783; (P) 1.0804; (R1) 1.0840; More...

EUR/USD recovered today but stays in range of 1.0760/0871. Intraday bias remains neutral and further decline is still expected. On the downside, break of 1.0760 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. 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 1.0946).

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.

Dollar strengthened in the early session, buoyed by surprisingly strong ADP private sector job data that far outpaced expectations. This robust employment figure has bolstered optimism for Friday’s upcoming non-farm payrolls report, which many anticipate will confirm sustained strength in the US labor market. With job growth remaining solid, Fed may feel less pressure to ease its policy aggressively in the near term. However, Dollar’s gains are somewhat tempered by Q3 GDP data, which came in slightly below forecasts, indicating some moderation in overall growth momentum.

Meanwhile, Euro also found support and rallied modestly after Eurozone GDP for Q3 exceeded expectations. Germany, in particular, delivered a surprise by reporting economic growth, allowing it to narrowly avoid a technical recession. This economic resilience lessens the immediate need for ECB to consider more aggressive policy easing in the coming meeting.

In currency markets for the week so far, Euro stands out as the strongest performer, as it's consolidating recent losses against a resilient Dollar, which holds second place. British pound follows as the third-strongest currency. Yen lags at the bottom of the rankings, while Aussie and Swiss Franc also underperformed. Kiwi and Loonie are positioning in the middle.

Technically, Gold record-breaking trend resumed after brief consolidations. Outlook will now stay bullish as long as 2716.90 support holds. Next targets are 138.2% projection of 1984.05 to 2449.83 from 2293.45 at 2937.15, and then 161.8% projection at 3047.08.

In Europe, at the time of writing, FTSE is down -0.56%. DAX is down -1.27%. CAC is down -1.54%. UK 10-year yield is down -0.088 at 4.232. Germany 10-year yield is down -0.002 at 2.334. Earlier in Asia, Nikkei rose 0.96%. Hong Kong HSI fell -1.55%. China Shanghai SSE fell -0.61%. Singapore Strait Times fell -0.88%. Japan 10-year JGB yield fell -0.0239 to 0.953.

US Q3 GDP growth slows to 2.8% annualized, vs exp 3.0%

US economy expanded at an annual rate of 2.8% in the third quarter, slightly below the expected 3.0% and down from the previous quarter's 3.0% growth.

This increase in real GDP was primarily supported by stronger consumer spending, exports, and federal government expenditures. However, a rise in imports, which detracts from GDP, partially offset these gains.

Inflation pressures moderated, with PCE (PCE) Price Index rising by 1.8%, down from 2.5% in Q2 and well below the expected 2.7%.

US ADP jobs rises 233k, hiring robust and resilient

US ADP report revealed robust private sector job growth in October, with employment rising by 233k, well above the forecasted 110k. Sector-wise, service-providing jobs led the way with a 211k increase, while goods-producing jobs added 22k.

By company size, large businesses contributed the most with 140k jobs, followed by medium-sized firms at 86k, and small companies at 4k.

Wage growth trends continued to ease, with year-over-year pay gains for job-stayers slowing to 4.6% and for job-changers to 6.2%.

ADP Chief Economist Nela Richardson highlighted the labor market’s resilience, noting that “even amid hurricane recovery, job growth was strong in October.” As the year approaches its end, the U.S. hiring remains "robust and broadly resilient.”

Eurozone GDP grows 04% qoq in Q3, Germany avoids recession

Eurozone GDP rose by 0.4% qoq in Q3, surpassing the anticipated 0.2% qoq growth. A notable surprise came from Germany, where GDP grew by 0.2% qoq against expectations of a -0.1% qoq contraction, allowing Europe’s largest economy to narrowly avoid a recession. France also outperformed, with GDP increase of 0.3% qoq for the quarter.

For the EU as a whole, GDP expanded by 0.3% qoq. Among member states, Ireland posted the strongest growth at 2.0% qoq, followed by Lithuania at 1.1% qoq and Spain at 0.8% qoq.

However, some economies faced contraction, with Hungary’s GDP declining by -0.7% qoq, Latvia’s by -0.4% qoq, and Sweden’s by -0.1% qoq.

Year-over-year growth was mixed across the EU, with positive annual growth rates reported in seven countries, while six saw negative growth.

Swiss KOF falls to 99.5 in Oct, recovery very hesitant

Swiss KOF Economic Barometer declined sharply from 104.5 to 99.5 in October, missing the expected 105.0 and falling below the 100-point threshold for the first time since January. This shift suggests a weakening outlook for the Swiss economy, with the KOF describing the recovery as “very hesitant.”

In October, indicators across all production-related sectors, including manufacturing, financial and insurance services, hospitality, and construction, showed declines.

Demand-side indicators, such as those for foreign and consumer demand, remained stable but showed little promise of stimulating stronger economic momentum.

Australia’s Q3 CPI slows to 2.8% yoy, goods prices fall but services edge higher

Australia’s Q3 CPI came in softer than anticipated, with consumer prices rising just 0.2% qoq, down from 1.0% qoq in Q2 and below expectations of 0.3% qoq. This marks the lowest quarterly increase since Q2 2020.

On an annual basis, CPI slowed from 3.8% yoy to 2.8% yoy, comfortably returning to RBA's target range of 2-3% and registering the lowest year-over-year inflation rate since Q1 2021.

Core inflation, measured by trimmed mean CPI, showed resilience with a 0.8% qoq rise, down from Q2's 0.9% qoq, but slightly above the expected 0.7% qoq. Annually, trimmed mean CPI slowed from 3.9% yoy to 3.5% yoy, aligning with market expectations.

The breakdown shows a notable shift in price pressures: annual goods inflation dropped sharply from 3.2% yoy to 1.4% yoy, largely due to substantial declines in electricity and fuel costs. However, services inflation edged up slightly from 4.5% yoy to 4.6% yoy, driven by higher costs in rents, insurance, and child care.

September monthly CPI echoed this trend, slowing significantly from 2.7% yoy to 2.1% yoy, undershooting expectations of 2.3% and marking the smallest annual increase since July 2021.

This softer inflation data should provide the RBA with room to consider easing its policy stance in the coming months, should inflation remain within target.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0783; (P) 1.0804; (R1) 1.0840; More...

EUR/USD recovered today but stays in range of 1.0760/0871. Intraday bias remains neutral and further decline is still expected. On the downside, break of 1.0760 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. 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 1.0946).

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.

US economy expanded at an annual rate of 2.8% in the third quarter, slightly below the expected 3.0% and down from the previous quarter's 3.0% growth.

This increase in real GDP was primarily supported by stronger consumer spending, exports, and federal government expenditures. However, a rise in imports, which detracts from GDP, partially offset these gains.

Inflation pressures moderated, with PCE Price Index rising by 1.8%, down from 2.5% in Q2 and well below the expected 2.7%.

Full US GDP advance release here.

US ADP report revealed robust private sector job growth in October, with employment rising by 233k, well above the forecasted 110k. Sector-wise, service-providing jobs led the way with a 211k increase, while goods-producing jobs added 22k.

By company size, large businesses contributed the most with 140k jobs, followed by medium-sized firms at 86k, and small companies at 4k.

Wage growth trends continued to ease, with year-over-year pay gains for job-stayers slowing to 4.6% and for job-changers to 6.2%.

ADP Chief Economist Nela Richardson highlighted the labor market’s resilience, noting that “even amid hurricane recovery, job growth was strong in October.” As the year approaches its end, the U.S. hiring remains "robust and broadly resilient.”

Full US ADP employment release here.

The euro is up for a third straight day on Wednesday. In the European session, EUR/USD is trading at 1.0839 at the time of writing, up 0.20% on the day.

Germany’s GDP for the third quarter surprised on the upside with a modest 0.2% gain. This was above the -0.1% reading in the second quarter and the market estimate of -0.1%. The German economy managed to avoid a technical recession, which is defined as two consecutive quarters of negative growth.

On a yearly basis, GDP fell by 0.2%, compared to zero growth in Q2 and a market estimate of -0.3%. Germany’s economy, the largest in the eurozone, remains in trouble and is weighing on the bloc. Eurozone GDP will be released later today and is expected to show a gain of 0.2% q/q and 0.8% y/y in Q3 vs. 0.2% q/q and 0.6% y/y in the second quarter.

German, eurozone inflation expected to accelerate

The markets will be keeping an eye on German inflation, which is expected to rise to 1.8% y/y in October, compared to 1.6% in September. This will be followed on Thursday with eurozone CPI, which is projected to rise from 1.9%, up from 1.8% previously. Core inflation is expected to creep lower to 2.6%, down from 2.7% in September and above the European Central Bank’s 2% target.

The German and eurozone inflation releases will be significant factors in the ECB’s rate plans. The central bank holds its final meeting of the year in December and a rate cut seems likely, although there is dissension among ECB Governing Council members as to the extent of the hike. If October’s inflation data is weaker than expected, we are likely to see growing calls for a jumbo 50-basis point cut at the December meeting.

EUR/USD Technical

• EUR/USD is testing resistance at 1.0840. Above, there is resistance at 1.0861
• 1.0804 and 1.0783 are the next support levels

Eurozone GDP rose by 0.4% qoq in Q3, surpassing the anticipated 0.2% qoq growth. A notable surprise came from Germany, where GDP grew by 0.2% qoq against expectations of a -0.1% qoq contraction, allowing Europe’s largest economy to narrowly avoid a recession. France also outperformed, with GDP increase of 0.3% qoq for the quarter.

For the EU as a whole, GDP expanded by 0.3% qoq. Among member states, Ireland posted the strongest growth at 2.0% qoq, followed by Lithuania at 1.1% qoq and Spain at 0.8% qoq.

However, some economies faced contraction, with Hungary’s GDP declining by -0.7% qoq, Latvia’s by -0.4% qoq, and Sweden’s by -0.1% qoq.

Year-over-year growth was mixed across the EU, with positive annual growth rates reported in seven countries, while six saw negative growth.

Full Eurozone GDP release here.

The Australian dollar remains under significant pressure, with AUD/USD extending its downtrend mid-week to reach 0.6539, the lowest since August. The decline, which began on 1 October, has been relentless, with the pair experiencing little to no respite from its downward trajectory.

Recent data indicating that Australia's annual inflation cooled to 2.8% in Q3 from 3.8% in Q2, falling just below the expected 2.9%, has contributed to the accelerated sell-off. Although this brings inflation within the Reserve Bank of Australia's (RBA) target range of 2-3%, the core inflation gauge closely monitored by the RBA remains elevated at 3.5% year-on-year in Q3. Given the persistent core inflation, the RBA has no immediate impetus to lower interest rates.

The central bank maintains that inflation needs to stabilise before considering monetary easing. With the RBA's next meeting scheduled for next week, market consensus does not anticipate a change in the current interest rate of 4.35% per annum. Rate cuts are not expected until at least May 2025.

Technical analysis of AUD/USD

The AUD/USD is persisting in its downward wave, targeting 0.6533. If this level is reached, a corrective phase towards 0.6613 may follow, and the downward trend is expected to resume towards 0.6491. The MACD indicator supports this bearish outlook, as its signal line is well below zero, indicating a continuation of the downward momentum.

On the hourly chart, AUD/USD has established a consolidation range around 0.6570, breaking downwards to continue towards 0.6533. Once this level is achieved, a corrective move to 0.6613 may begin, with an intermediate target at 0.6570. This potential upward correction is confirmed by the Stochastic oscillator, whose signal line is below 20 but poised to rise towards 80, suggesting a brief respite from the selling pressure.

Market Picture

Bitcoin came within a hair’s breadth of an all-time high on Tuesday night, but the overall crypto market is well off its peak. Total cryptocurrency capitalisation at the overnight peak was $2.46 trillion, down $2.48 trillion from the July peak, almost 12% below the March high of $2.77 trillion and around $400 billion below the all-time high reached in November 2021. While the big picture points to a series of lower peaks, the medium-term uptrend since early September still suggests that new highs are a matter of months away. And the acceleration we saw last week suggests it’s a matter of weeks, not months.

Bitcoin has been the main driver, gaining momentum since Saturday. Trading near $72.4K, Bitcoin does not appear to be extremely overheated, leaving room for further strength.

The market seems to be pricing in Trump’s victory and the easing of regulations on cryptocurrencies. The euphoria is particularly evident in Doge, which has gained another 6% in one day, 24% in seven days and over 41% in the last 30 days. The coin has no direct benefit from Trump’s rise to power, but speculators are warming to it because of frequent mentions of Musk, who may get a position in Trump’s government.

News Background

Bitget Research notes that several factors support BTC’s potential growth, including the expected Fed rate cut on 7 November. Market dynamics could also be influenced by the Microsoft board’s vote on the Bitcoin investment scheduled for 10 December.

According to former BitMEX CEO Arthur Hayes, demand for Bitcoin will rise sharply because of the Chinese stimulus. He believes that the injection of money into the economy and the threat of further inflation will lead to increased investment in risky assets.

The annualised yield on Steak, the second most capitalised cryptocurrency, has fallen to ~3%. Kaiko noted that Ether’s steak yield is now lower than that of other major tier 1 protocols, including Cosmos, Polkadot, Celestia, and Solana, which range from 7% to 21%.

Zeta Markets noted that Ethereum’s limitations are forcing users, applications, and capital to turn to L2 networks and competing blockchains such as Solana as demand for faster and more scalable solutions grows.

GBP/USD is attempting a recovery wave above the 1.2950 resistance. EUR/GBP declined steadily below the 0.8330 and 0.8325 support levels.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

• The British Pound is attempting a fresh increase above 1.2950.
• There is a key rising channel forming with support near 1.2980 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP is trading in a bearish zone below the 0.8350 pivot level.
• There is a connecting bearish trend line forming with resistance near 0.8330 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair declined after it failed to clear the 1.3120 resistance. As mentioned in the previous analysis, the British Pound even traded below the 1.3000 support against the US Dollar.

Finally, the pair tested the 1.2910 zone and is currently attempting a fresh increase. The bulls were able to push the pair above the 50-hour simple moving average and 1.2950. The pair even climbed above the 50% Fib retracement level of the downward move from the 1.3071 swing high to the 1.2907 low.

On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.3015. It coincides with the 61.8% Fib retracement level of the downward move from the 1.3071 swing high to the 1.2907 low.

The next major resistance is near 1.3040. A close above the 1.3040 resistance zone could open the doors for a move toward 1.3070. Any more gains might send GBP/USD toward 1.3120.

On the downside, there is a key support forming near a rising channel at 1.2980. If there is a downside break below 1.2980, the pair could accelerate lower. The first major support is near the 1.2940 level.

The next key support is seen near 1.2910, below which the pair could test 1.2880. Any more losses could lead the pair toward the 1.2845 support.

EUR/GBP Technical Analysis

On the hourly chart of EUR/GBP at FXOpen, the pair started a fresh decline from well above 0.8400. The Euro traded below the 0.8350 and 0.8330 support levels against the British Pound.

The EUR/GBP chart suggests that the pair even declined below the 0.8310 level and tested 0.8300. It is now consolidating losses and trading below the 50-hour simple moving average. The pair is now facing resistance near the 61.8% Fib retracement level of the downward move from the 0.8350 swing high to the 0.8298 low.

The next major resistance could be 0.8300, a connecting bearish trend line, and the 50-hour simple moving average. It coincides with the 76.4% Fib retracement level of the downward move from the 0.8350 swing high to the 0.8298 low.

The main resistance is near the 0.8350 zone. A close above the 0.8350 level might accelerate gains. In the stated case, the bulls may perhaps aim for a test of 0.8400. Any more gains might send the pair toward the 0.8420 level.

Immediate support sits near 0.8310. The next major support is near 0.8300. A downside break below the 0.8265 support might call for more downsides. In the stated case, the pair could drop toward the 0.8220 support level.

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