Sample Category Title

UK PMI Services index was finalized at to 49.5 in October up fractionally from 49.3 in September, lingering in contraction territory for the third consecutive month. PMI Composite showed a minor improvement to 48.7 from an 8-month nadir of 48.5

Economics Director at S&P Global Market Intelligence, Tim Moore, highlighted, "A shallow downturn in UK service sector activity persisted in October as businesses struggled to make headway against a backdrop of worsening domestic economic conditions and stretched household budgets."

The outlook remains cautious at best. "Forward-looking survey indicators suggested that service providers will continue to skirt with recession," said Moore, noting that business optimism has dipped to its lowest point of the year.

On the brighter side, there was a silver lining with a slight uptick in new export sales. Furthermore, input cost inflation showed signs of easing, reaching its softest point in over two years due to reduced raw material prices and supplier discounting.

Nevertheless, this hasn't stopped businesses from hiking prices. "Higher wages and fuel bills were still passed on to clients, which resulted in the strongest increase in average prices charged inflation for three months," Moore explained.

Full UK PMI services release here.

The Federal Reserve decided unanimously to maintain interest rates at 5.25-5.50%, a highly anticipated move that retains significant implications for monetary policy's future course. Despite this decision, the FOMC refrained from definitively ruling out potential future rate hikes, leaving room for policy adjustments. During his press conference, Chair Jerome Powell expressed deep concerns about ongoing inflation, implying that the current policy might not be restrictive enough. Rising bond yields also captured the Fed's attention, contributing to tightening financial conditions.

On the other side of the Atlantic, the Bank of England (BOE) took a similar stance by holding existing interest rates, following a series of consecutive rate hikes from December 2021 to August 2022. The UK grapples with high inflation, which surged to 6.7% in September, significantly exceeding the BOE's 2% target, similar to the US and Europe. Core inflation, excluding volatile food and energy prices, remains uncomfortably high at 6.1% for the UK. The country maintains a 15-year high interest rate of 5.25%, and it remains to be seen how this would impact the NFP release.

USDCAD - H4 Timeframe

USDCAD began a steady decline a short while ago, and the drop is currently approaching a demand zone. When price reaches the demand zone, I expect to see a bullish rally because the demand zone overlaps with other confluences like; the 200-period moving average, trendline support, and the bullish array of the moving averages indicating a bullish trend is at play.

Analyst’s Expectations:

• Direction: Bullish
• Target: 1.38349
• Invalidation: 1.35614

EURUSD - H4 Timeframe

At this time, we can see the price action on the 4-Hour timeframe of the EURUSD chart returning to the previous high where we have a supply zone. My expectation is that the bullish move will be rejected from the supply zone, back to the 50-period moving average.

Analyst’s Expectations:

• Direction: Bearish
• Target: 1.06024
• Invalidation: 1.06968

GBPUSD - H4 Timeframe

GBPUSD’s 4-Hour timeframe chart provides a much cleaner price action compared to the EURUSD chart of the same period. Here on GBPUSD we see the supply zone clearly at the 76% of the Fibonacci retracement as the price action slowly approaches it. The bearish moving average array is also quite clear.

Analyst’s Expectations:

• Direction: Bearish
• Target: 1.21124
• Invalidation: 1.22916

CONCLUSION

The trading of CFDs comes at a risk. To succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

The S&P500 jumped almost 2% to above its 200-DMA, and Nasdaq 100 gained 1.74% and tested its 50-DMA to the upside as the rally in the US sovereign bonds extended to another day.

Apple disappoints

Apple will likely slow the rally in major US indices. Apple shares dived up to 4% in the afterhours trading after announcing that the sluggish Chinese demand for iPhones dented revenue. The Mac computers sales also fell short of a billion USD. Apple sales fell for the fourth straight quarter, the longest such decline in 22 years. As a result, Apple stock could sink to $170 a share, the critical 38.2% Fibonacci retracement level, if taken out, would let Apple sink into the medium-term bearish consolidation zone. The only thing that could save Apple from falling into dark waters is… a further rally in US bonds, and a further fall in yields.

Falling yields are no good for Fed

The US bond rally popped this week because the US Treasury said that it would borrow slightly less than previously thought and slightly less 3-, 10- and 30-year papers. The Federal Reserve (Fed) hinted that the rate hikes could be coming to an end because the recent surge in US long term yields helped them tighten the financial conditions without the need for another rate hike.

But if the yields fall at this speed, the Fed expectations will become hawkish very quickly, and depending on how far the market will go, the Fed could be obliged to hike rates again in December, or in January to keep financial conditions tight enough.

Jobs day

US growth is strong, and the jobs market remains healthy. The Fed thinks that solid labour-force participation and immigration explain the resilience of the jobs market. According to the consensus of analyst estimates on Bloomberg, the US economy is expected to have added 180K new nonfarm jobs, the unemployment rate is seen steady at around 3.8% and the wages growth may have slowed from 4.2% to 4% on an annual basis. Any strength in job additions or wages growth data could bring bond trades back to earth and remind them that if the US jobs market - and the economy - remains this strong, the Fed could turn hawkish again. But strong jobs data in a context of higher supply is not necessarily inflationary.

Gloomy UK outlook

The Bank of England (BoE) kept its interest rate unchanged for the second straight month yesterday. Some MPC members still voted for a 25bp hike to make sure that the pause is not premature, but they all said the same thing: it’s too early to talk about rate cuts.

Good news is that inflation may fall below 5% in October and somewhere near 4.5% by the year end. But at 4.5-5%, inflation is still more than twice the BoE’s policy target. Therefore, the BOE can’t promise that it’s done hiking. It could only hope that the cumulative impact of higher rates on the economy would do the rest of the heavy lifting.

In the best-case scenario, the UK’s gloomy economic outlook - which seems to become gloomier as months go by - weighs on demand and brings inflation lower. In the worst-case scenario, inflation remains sticky while the economy sinks into a recession. In both cases, the BoE wouldn’t hike. The expectation of another hike is down to 1 in 3 and markets now fully price in 3 quarter-point cuts by the end of 2024. The softer economic outlook and softening BoE expectations are threatening for sterling bulls both against the US dollar and the euro.

• USDCAD in the red after reaching 3-year high
• Aggressive rally since the July 14 low of 1.3091
• Momentum indicators appear to support the current downleg

USDCAD is moving lower today, registering its third consecutive red candle after trading at a 3-year high of 1.3898. It has been an aggressive rally from the July 14 low with the bulls potentially staying on the sidelines this week due to numerous key events. In the meantime, the bullish series of higher highs and higher lows remains intact but a possible shooting star doji today could complicate the outlook.

Amidst this price action, the momentum indicators appear to be favouring the current correction. The RSI is hovering a tad above its midpoint, and the Average Directional Movement Index (ADX) is pointing to an aggressively weakening bullish trend in the market. Interestingly, the stochastic oscillator has crossed below both its moving average and overbought territory, signaling that the current downleg could have legs.

Should the bulls remain in control of the market, they could try to keep USDCAD above the December 16, 2022 high at 1.3704. They could then have a go at overcoming the 1.3807-1.3854 area. If successful, they could have the chance to record a new 2023 high and potentially set their course for the October 13, 2022 peak at 1.3977.

On the flip side, the bears appear determined for the current correction to pick up pace and they could first try to push USDCAD below the 1.3704 level. They could attempt to stage a sell-off towards the 1.3605-1.3635 region that is defined by the 23.6% Fibonacci retracement of the April 5, 2022 – October 13, 2022 uptrend and the 50-day simple moving average (SMA). Lower, the support set by the July 14, 2023 ascending trendline could be stronger than currently anticipated.

To sum up, USDCAD bears are trying to recoup lost ground after the recent strong bullish run, potentially capitalizing on the increasingly negative momentum.

Daily Pivots: (S1) 159.25; (P) 159.66; (R1) 160.26; More....

Intraday bias in EUR/JPY remains neutral for consolidation below 160.84. Outlook stay bullish as long as 157.67 support holds. Break of 160.84 will resume larger up trend to 163.06 projection level next.

In the bigger picture, rise from 114.42 (2020 low) is in progress. Next target is 100% projection of 124.37 to 148.38 from 139.05 at 163.06. On the downside, break of 154.32 support is needed to be the first sign of medium term topping. Otherwise, outlook will remain bullish even in case of deep pullback.

Daily Pivots: (S1) 1.6448; (P) 1.6587; (R1) 1.6671; More...

Intraday bias in EUR/AUD remains on the downside at this point. Corrective rebound from 1.6319 could have completed at 1.6843 already. Deeper fall would be seen to retest 1.6319 support. On the upside, above 1.6588 minor resistance will turn intraday bias neutral first.

In the bigger picture, the strong support from medium term rising trend line indicates that rise from 1.4281 (2022 low) is still in progress. Sustained break of 1.7062 will pave the way to 61.8% retracement of 1.9799 (2020 high) to 1.4281 at 1.7691. In any case, outlook will stay bullish as long as 1.6319 support holds. However, decisive break of 1.6319 will confirm medium term topping at 1.7062, and bring deeper fall to 1.5846 support.

Daily Pivots: (S1) 0.8684; (P) 0.8698; (R1) 0.8714; More....

Intraday bias in EUR/GBP remains neutral and outlook is unchanged. Consolidation from 0.8752 could extend further. Downside should be contained by 55 D EMA (now at 0.8656). Firm break of 0.8752 will resume the whole rise from 0.8491, and target 100% projection of 0.8491 to 0.8704 from 0.8614 at 0.8827 next. However, sustained break of 55 D EMA will argue that whole rebound from 0.8491 has completed, and bring deeper fall to 0.8614 support.

In the bigger picture, current development suggests that whole down trend from 0.9267 (2022 high) has completed with three down to to 0.8491. Rise from 0.8491 is seen as another leg inside that pattern from 0.9499 (2020 high). Further rally should be seen to 0.8977 resistance and above. This will now remain the favored case as long as 0.8614 support holds.

Daily Pivots: (S1) 0.9582; (P) 0.9607; (R1) 0.9647; More...

Intraday bias in EUR/CHF remains neutral first and further rise is in favor. Break of 0.9627 will resume the rebound from 0.9416 to 0.9691 key structural resistance. Firm break there will carry larger bullish implication. On the downside, below 0.9555 will turn bias to the downside for deeper pullback.

In the bigger picture, down trend from 1.2004 (2018 high) is still in progress. Decisive break of 0.9407 will confirm resumption, and target 61.8% projection of 1.1149 to 0.9407 from 1.0095 at 0.9018. On the upside, break of 0.9691, however, will indicate medium term bottoming just ahead of 0.9407. Further rally could then be seen back towards 1.0095 resistance.

AUD/USD is moving higher and might climb above 0.6450. NZD/USD is also rising and could extend its increase above the 0.5915 resistance zone.

Important Takeaways for AUD USD and NZD USD Analysis Today

• The Aussie Dollar started a fresh increase above the 0.6350 and 0.6400 levels against the US Dollar.
• There is a connecting bullish trend line forming with support near 0.6425 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD is gaining bullish momentum above the 0.5870 support.
• There is a short-term contracting triangle forming with support near 0.5885 on the hourly chart of NZD/USD at FXOpen.

AUD/USD Technical Analysis

On the hourly chart of AUD/USD at FXOpen, the pair started a fresh increase from the 0.6320 support. The Aussie Dollar was able to clear the 0.6350 resistance to move into a positive zone against the US Dollar.

There was a close above the 0.6400 resistance and the 50-hour simple moving average. Finally, the pair tested the 0.6455 zone. A high is formed near 0.6456 and the pair is now consolidating gains.

On the downside, initial support is near the 23.6% Fib retracement level of the upward move from the 0.6318 swing low to the 0.6456 high at 0.6425. There is also a connecting bullish trend line forming with support near the same zone.

The next support could be the 50-hour simple moving average at 0.6400. If there is a downside break below the 0.6400 support, the pair could extend its decline toward the 76.4% Fib retracement level of the upward move from the 0.6318 swing low to the 0.6456 high at 0.6350.

Any more losses might signal a move toward 0.6320. On the upside, the AUD/USD chart indicates that the pair is now facing resistance near 0.6455.

The first major resistance might be 0.6480. An upside break above the 0.6480 resistance might send the pair further higher. The next major resistance is near the 0.6550 level. Any more gains could clear the path for a move toward the 0.6620 resistance zone.

NZD/USD Technical Analysis

On the hourly chart of NZD/USD on FXOpen, the pair started a steady increase from the 0.5790 level. The New Zealand Dollar broke the 0.5820 resistance to start the recent increase against the US Dollar.

The pair settled above 0.5850 and the 50-hour simple moving average. It tested the 0.5915 zone and is currently consolidating gains above the 23.6% Fib retracement level of the upward wave from the 0.5788 swing low to the 0.5916 high.

The NZD/USD chart suggests that the RSI is still above 50 and signaling more upsides. On the upside, the pair might struggle near 0.5900. The next major resistance is near the 0.5915 level.

A clear move above the 0.5915 level might even push the pair toward the 0.5950 level. Any more gains might clear the path for a move toward the 0.6000 resistance zone in the coming days.

On the downside, there is major support forming near a short-term contracting triangle at 0.5885. The next major support is near the 50-hour simple moving average at 0.5870, below which the pair might test the 50% Fib retracement level of the upward wave from the 0.5788 swing low to the 0.5916 high at 0.5850.

If there is a downside break below the 0.5850 support, the pair might slide toward the 0.5820 support. Any more losses could lead NZD/USD in a bearish zone to 0.5790.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

The short-term Elliott wave view in the DAX suggests that the index has ended the cycle from the 31 July 2023 peak as a leading diagonal structure in a higher degree corrective sequence. Whereas the decline to 15468 low ended wave 1, wave 2 ended at 16042 high. Wave 3 ended at 14948 low & wave 4 ended at 15575 high. Down from there, wave 5 unfolded in a lesser degree 5 waves structure where wave ((i)) ended at 15103 low. Wave ((ii)) ended at 15288 high, wave ((iii)) ended at 14820 low, wave ((iv)) ended at 14914 high and wave ((v)) ended at 14630 low. Thus ended wave 5 of (A) as a leading diagonal structure.

Up from there, the index is doing a 3-wave corrective bounce within the wave (B) bounce as an Elliott wave zigzag correction. While the initial rally to 14916 high has ended wave ((i)). Then a pullback in wave ((ii)) unfolded as a flat correction where lesser degree wave (a) ended at 14809 low. Wave (b) ended at 14933 high, and wave (c) ended at 14655 low. Above from there, the index is extending higher in wave ((iii)) as an impulse sequence. Near-term, as long as dips remain above 14630 low the index is expected to continue to extend higher for a few more highs. To complete the first leg of the bounce in wave A. Afterward, the index is expected to see a pullback in wave B. Then it should do another extension higher in wave C to complete the 3-wave corrective bounce.

DAX 1-Hour Elliott Wave Chart From 11.03.2023

DAX Elliott Wave Video

https://www.youtube.com/watch?v=NtPsbOnlnmw