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Daily Pivots: (S1) 0.8283; (P) 0.8305; (R1) 0.8317; More...

EUR/GBP's decline accelerates lower today and intraday bias stays on the downside for 61.8% projection of 0.8624 to 0.8294 from 0.8446 at 0.8242. Break there will target 0.8201 key support. On the upside, above 0.8324 minor resistance will turn intraday bias neutral first. But outlook will stay bearish as long as 0.8446 resistance holds, in case of rebound.

In the bigger picture, down trend from 0.9267 (2022 high) is in progress. Next target is 0.8201 (2022 low), but strong support should be seen there to bring rebound. However, outlook will remain bearish as long as 0.8624 resistance holds even in case of strong rebound. Decisive break of 0.8201 will indicate long term bearish reversal.

Daily Pivots: (S1) 152.07; (P) 152.72; (R1) 153.30; More...

Range trading continues in USD/JPY and intraday bias stays neutral for the moment. Further rise is expected as long as 151.27 support holds. Above 154.70 will resume the rally from 139.57 towards 161.94 high. However, considering bearish divergence condition in 4H MACD, break of 151.27 will indicate short term topping, and turn bias back to the downside for 55 D EMA (now at 149.74).

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) 0.8716; (P) 0.8742; (R1) 0.8784; More…

USD/CHF's rally resumed by breaking through 0.8733 temporary top and intraday bias is back on the upside. Current rise from 0.8374 should target 61.8% retracement of 0.9223 to 0.8374 at 0.8899 next. On the upside, below 0.8752 minor support will turn intraday bias neutral again. But outlook will stay bullish as long as 0.8614 support holds, in case of retreat.

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern. Rise from 0.8374 is seen as the third leg. Overall outlook will continue to stay bearish as long as 0.9223 resistance holds. Break of 0.8332 low is in favor at a later stage when the consolidation completes.

Daily Pivots: (S1) 1.2870; (P) 1.2933; (R1) 1.2981; More...

GBP/USD is still bounded in range above 1.2833 temporary low and intraday bias stays neutral for the moment. Further decline is expected 1.3047 resistance holds. Break of 1.382 will resume the fall from 1.3433 to 61.8% retracement of 1.2298 to 1.3433 at 1.2732. However, considering bullish convergence condition in 4H MACD, firm break of 1.3047 will indicate short term bottoming, and turn bias back to the upside.

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) 1.0667; (P) 1.0738; (R1) 1.0788; More...

EUR/USD's decline resumed by breaking through 1.0681 temporary low and intraday bias is back on the downside. Sustained trading below 61.8% projection of 1.1213 to 1.0760 from 1.0936 at 1.0656 will extend the fall from 1.1213 to 100% projection at 1.0483. On the upside, above 1.0727 minor resistance will turn intraday bias neutral first. But outlook will stay bearish as long as 1.0936 resistance holds.

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.

Euro is facing immense selling pressure today as US session commences, driven by both external trade concerns and internal political challenges in Germany. The market is wary of escalation in trade tensions with the US following Donald Trump’s election victory, with reports suggesting that Robert Lighthizer—a trade hawk known for his aggressive stance—could make a return as the US Trade Representative. Such a move signals a push for increased tariffs, raising fears of a "second round" of the trade war, which could place substantial pressure on Europe’s already sluggish economy.

Compounding these external risks, Germany is facing its own internal political crisis. Chancellor Olaf Scholz has indicated willingness to move up national elections after the collapse of his ruling coalition last week. This came following his dismissal of former Finance Minister Christian Lindner, triggering turmoil within the government. The prospect of a snap election adds a layer of uncertainty for Euro, as markets turn anxious about Germany’s future fiscal direction, given its role as the economic engine of the Eurozone.

Despite the Euro's struggles, Yen remains the weakest currency today. Prime Minister Shigeru Ishiba managed to retain his position in a parliamentary vote but received only 221 votes, well below the required majority in the 465-seat legislature. Ishiba’s position is now precarious, heading a minority government that faces escalating trade threats from the US, along with heightened geopolitical challenges involving China and North Korea. This political instability could hinder BoJ’s ability to execute its planned policy tightening as the central bank deals with heightened uncertainty both at home and abroad.

Meanwhile, Dollar is so far the day’s strongest performer, though it remains below last week's peak against all major currencies except the Euro and Swiss Franc, indicating restrained momentum. Australian and New Zealand Dollars follow the greenback as next strongest. British Pound and Canadian Dollar sit in the middle of the pack.

Technically, EUR/GBP's down trend also picks up momentum today. Further fall should be seen to 61.8% projection of 0.8624 to 0.8294 from 0.8446 at 0.8242 and possibly below. The question remains on whether 0.8201 key support (2023 low) is strong enough to contain downside.

In Europe, at the time of writing, FTSE is up 0.68%. DAX Is up 1.45%. CAC is up 1.31%. UK 10-year yield is up 0.033 at 4.478. Germany 10-year yield is down -0.007 at 2.364. Earlier in Asia, Nikkei rose 0.08%. Hong Kong HSI fell -1.45%. China Shanghai SSE rose 0.51%. Singapore Strait Times rose 0.41%. Japan 10-year JGB yield fell -0.0045 to 1.001.

SNB's Martin: Swiss Franc appreciation expected due to inflation differentials

SNB Vice President Antoine Martin conveyed a cautious stance on future monetary policy in an interview with Le Temps.

While SNB indicated at its September meeting the readiness to cut interest rates further, Martin stressed that "it's not useful for central banks to lock themselves into forward-looking communications."

He highlighted that "between now and the next decision, there may be changes in conditions that render current communications invalid," This approach means SNB has made "absolutely no commitment" to a specific policy path.

Addressing the performance of Swiss Franc, Martin noted that its development this year has been "neither particularly surprising nor exceptionally problematic."

He explained that due to the inflation differential between Switzerland and other countries, SNB expects Swiss Franc to "appreciate structurally over time in nominal terms."

However, he pointed out that "in real terms, excluding the inflation effect, the appreciation has been limited."

BoJ affirms core stance: Rate hikes to proceed gradually if economic outlook holds

BoJ's Summary of Opinions from its October 30-31 reiterated its "basic thinking" that it will adjust the degree of monetary accommodation if the outlook for economic activity and prices unfolds as expected. Emphasizing the importance of "communicating effectively" this core message, BoJ aims to manage market expectations carefully.

One member indicated that if economic conditions progress as anticipated, BoJ could "raise the policy interest rate gradually," reaching 1.0% in the second half of fiscal 2025 at the earliest.

Conversely, another member expressed caution, noting the difficulty in confidently conveying a medium-term policy rate path due to "high uncertainties" surrounding the neutral interest rate and the transmission mechanism of monetary policy.

RBNZ 1-yr inflation expectation down, 2-yr's up

RBNZ's latest Survey reveals that expectations for one-year-ahead annual inflation dropped significantly by -35 basis points from 2.40% to 2.05%, extending a steady downward trend in inflation expectations since Q2 2023. On the other hand, two-year inflation expectations inched up to from 2.03% 2.12% .

For wage inflation, one-year-ahead expectations decreased modestly by -7 basis points to 2.81%, while two-year projections rose from 2.86% to 3.16%.

Growth expectations improved. The mean one-year-ahead GDP growth expectation jumped by 61 basis points to 1.60%, with a smaller increase of 7 basis points for two-year growth expectations to 2.17%.

On the interest rate front, the survey points to further monetary easing ahead. OCR is expected to be 4.20% by the end of Q4 2024, with a sharper decline to 3.33% anticipated by Q3 2025. OCR is currently at 4.75% following a recent 50bps cut in October.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0667; (P) 1.0738; (R1) 1.0788; More...

EUR/USD's decline resumed by breaking through 1.0681 temporary low and intraday bias is back on the downside. Sustained trading below 61.8% projection of 1.1213 to 1.0760 from 1.0936 at 1.0656 will extend the fall from 1.1213 to 100% projection at 1.0483. On the upside, above 1.0727 minor resistance will turn intraday bias neutral first. But outlook will stay bearish as long as 1.0936 resistance holds.

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.

The New Zealand dollar is showing limited movement on Monday. In the European session, NZD/USD is trading at 0.5967, up 0.07% on the day. The New Zealand dollar was trounced on Friday, falling 1%.

New Zealand inflation expectations inch up to 2.1%

New Zealand inflation expectations inched higher to 2.1% in the fourth quarter, up from 2.0% in Q3. Expectations for one-year ahead annual inflation declined to 2.05% from 2.40%. The Reserve Bank of New Zealand keeps a careful eye on inflation expectations are they can translate into real inflation. Inflation has been on a downtrend and fell to 2.2% in the third quarter, the first time in over three years that inflation is back in the target band of 1% to 3%.

The RBNZ has been aggressive in its easing cycle in response to falling inflation. The central bank slashed the cash rate by 50 basis points to 4.75% last week and is expected to reduce rates by another 50 bp at the final meeting of the year on Nov. 27. The RBNZ is likely to continue trimming rates in 2025, with the pace and size of rate cuts largely dependent on inflation, employment and GDP.

China’s CPI ticks lower

China’s consumer prices rose 0.3% y/y in October, below the 0.4% gain in September and the lowest since June. This missed the market estimate of 0.4%. The monthly reading pointed to deflation, coming in at -0.3%, compared to 0% in September and lower than the -0.1% market estimate. China’s central bank announced in September aggressive stimulus to boost the sluggish economy and encourage more consumption, but the measures will take time to filter through the economy.

NZD/USD Technical

• NZD/USD has pushed above resistance at 0.5987 and is testing resistance at 0.6002
• There is support at 0.5957 and 0.5942

Gold remains at the back foot and stays in red for the second day on firmer dollar and also pressured by eased US political uncertainty, which recently fueled safe haven demand, along with geopolitics and expectations for stronger Fed rate cuts.

New circumstances after Trump’s victory point to measures which will boost economic growth and subsequently fuel inflation that requires revision of Fed’s current stance on monetary policy.

The latest remarks from Fed Chair Powell suggest that the US central bank will be likely less aggressive in rate cuts and that policy easing cycle would likely end earlier than initially planned, which may further dent metal’s safe haven appeal.

Pivotal supports at $2646/43 (Fibo 76.4% of $2602/$2790 / Nov 7 higher low) came under pressure, with break here to further weaken near-term structure and risk test of key supports at $2616/02 (top of thick rising daily Ichimoku cloud / Oct 10 trough), violation of which to generate reversal signal and open way for deeper correction.

Such scenario won’t be a surprise as gold was in steep uptrend and without significant correction for one year, however fundamentals, currently metal’s key driver, are expected to define fresh direction.

Technical studies weakened on daily chart as negative momentum continues to strengthen, MA’s (10/20/30-d) turned to bearish configuration and south-heading RSI points to more space for downside extension.

Adding to negative signals was last week’s bearish close with the biggest weekly loss since mid-May.

Markets focus on release of US October inflation data and speeches from several Fed officials (due later this week) which would provide fresh details on direction and the pace of changes in the US monetary policy in the near future.

Res: 2686; 2700; 2749; 2758.
Sup: 2643; 2600; 2560; 2471.

USDJPY regained traction and bounced from 152.14 (low of two-day pullback from new multi-week tops), offsetting negative signal from bull-trap on weekly chart (failure to register weekly close above 153.40 (Fibo 61.8% of 161.95/139.57).

Fresh strength signals that the dollar is likely to continue benefiting from renewed Fed hawkishness on expectations that Trump’s administration will follow campaign’s promises and focus on boosting economic growth.

Technical studies on daily chart show strong positive momentum, with the latest formation of 20/200DMA golden cross, adding support.

We look for initial bullish signal on close above 153.40 Fibo level but lift and close above 154.70 double top (Nov 6/7 highs) to confirm signal and open way for acceleration towards next target at 156.67 (Fibo 76.4%).
Caution on potential repeated rejection a 154.70 pivot which would keep the price in extended consolidation, with bullish bias above correction low (152.14).

Stronger bearish signal to be expected on firm break of 151.70/30 zone (200DMA / recent range floor).

Res: 153.88; 154.70; 155.22; 156.67.
Sup: 153.40; 153.00; 152.14; 151.69.

According to ICE data, the U.S. Dollar Index futures have reached highs last seen in early July 2024. The dollar’s strength is attributed, in part, to anticipated economic stimulus measures outlined by the newly elected President Donald Trump during his campaign.

This has put pressure on other currencies paired with the dollar. Currently, the British pound is trading near 1.28400, close to a three-month low.

Today’s technical analysis of the 4-hour GBP/USD chart reveals:

→ long-term price fluctuations have shaped an upward channel since May;

→ the pair is near a key support level at the lower boundary of this channel;

→ a downtrend channel (in red) has formed since early October, highlighting recent bearish control; → the ATR indicator is at an annual high, indicating heightened volatility.

Key economic events are on the horizon:

→ UK labour market data on Tuesday at 10:00 (GMT+3),

→ U.S. CPI figures on Wednesday at 16:30 (GMT+3),

→ speeches by the Fed and Bank of England heads on Thursday.

With these events approaching, traders may anticipate continued wide fluctuations around the lower boundary of the upward channel.

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