Sample Category Title

Japanese Yen continues to weaken, accelerating its decline in today's Asian session and edging closer to a multi-decade low against Dollar. The market appears to be gaining confidence that Japan will not intervene at this stage, despite the steep and extended depreciation. But the country's approach to currency intervention remains shrouded in typical discretion. So, it's "never say never" regarding the timing of intervention.

Still, it should be noted that top Japanese officials have previously attributed part of Yen's weakness to the divergent monetary policies between Japan and other major economies. BoJ remains cautious, with even the most optimistic officials suggesting a wait until early next year's wage negotiations to gauge the sustainability of the 2% inflation target. That's a clear prerequisite to loose policy exit. Hence, Yen's bearish trend is unlikely to change before that.

In the broader currency market, Canadian Dollar trails Yen as the second weakest, followed by Swiss Franc. On the other hand, New Zealand Dollar leads as the strongest, with Sterling and Australian Dollar also showing robustness. Euro and Dollar are showing mixed performance.

As the week progresses, the focus will shift back to key economic data, particularly CPI figures from US the UK, which are expected to influence market sentiment and central bank policies significantly.

Technically, CHF/JPY's pull back from 168.39 appears to be finished already, ahead of 55 EMA. The shallow fall is likely just a correction to the rise from 159.95 to 168.39 only. Immediate focus is now on 168.39. Decisive break there will resume larger up trend. Next target is 38.2% projection of 140.21 to 166.57 from 159.95 at 170.01. Firm break there could prompt upside acceleration to 61.8% projection at 176.24 next.

In Asia, at the time of writing, Nikkei is down -0.05%. Hong Kong HSI is up 0.01%. China Shanghai SSE is down -0.07%. Singapore Strait Times is down -0.91%. Japan 10-year JGB yield is up 0.026 at 0.884.

Japan's wholesale inflation eases to 0.8% yoy, continued downward trend

Japan's corporate goods price index, a key indicator of wholesale inflation, exhibited a significant slowdown in October, underscoring a continued trend of easing price pressures.

The index increased by just 0.8% yoy, falling short of the anticipated 0.9% yoy and marking its first dip below 1% since February 2021. This latest figure also represents the 10th consecutive month of slowing wholesale inflation.

The deceleration in the CGPI can be largely attributed to decreases in the prices of specific commodities. Notably, costs for wood, chemical, and steel products experienced declines, reflecting the broader impact of reduced global commodity prices.

Export price index saw an uptick from 0.5% yoy to 1.0% yoy. Import price index showed a lesser decline, moving from -15.5% yoy to -12.5% yoy.

RBA's Kohler warns of bumpy road ahead in tackling inflation

In a speech, Marion Kohler, Acting Assistant Governor of RBA, remarked that decline in inflation is expected to be a "more gradual process than previously thought."

This outlook stems from the current economic environment characterized by "still-high level of domestic demand" and "strong labour" alongside other cost pressures. These factors contribute to the prediction that inflation will hover just below 3% by the end of 2025.

The Assistant Governor pointed out that the recent trend of declining inflation has primarily been "driven by lower goods price inflation." In stark contrast, "domestically sourced inflation" – especially in the services sector – has shown resilience, being "widespread and slow to decline."

Kohler also underscored the nuanced challenges in the next phase of controlling inflation, which she anticipates to be "more drawn out than the first." This outlook aligns with experiences in other advanced economies that have faced similar inflationary patterns.

Furthermore, she cautioned about the potential for unforeseen challenges, citing the recent increase in fuel prices as an example of supply shocks that could unpredictably influence headline inflation.

Kohler emphasized the uncertain nature of the journey ahead in managing inflation, stating, "the road ahead could be bumpy."

New Zealand BNZ services fell to 48.9, contraction with economic angst

New Zealand's BusinessNZ Performance of Services Index experienced a notable dip in October, falling from 50.6 to 48.9, a level indicative of contraction in the sector. This decline also positions the index well below its long-term average of 53.5.

Activity and sales experienced a significant drop, moving from 50.9 to 47.4. There was also a downturn in employment, which decreased from 50.5 to 49.3. New orders and business fell as well,from 53.9 to 51.9. On a more positive note, stocks and inventories saw an increase, rising from 48.0 to 51.1, and supplier deliveries edged up slightly from 49.7 to 49.8.

Despite these declines, the proportion of negative comments in October decreased to 58.2%, a reduction from 61.8% in September and 63.9% in August, indicating a slight improvement in business sentiment.

BNZ Senior Economist Craig Ebert said that "combined, the PSI (48.9) and PMI (42.5) paint a picture of economic angst. This counsels caution around GDP for Q3, after it posted a surprising gain of 0.9% in Q2".

US CPI Data in Focus: A Test of Fed's Insufficient Confidence in Disinflation Progress

A slew of significant economic data releases are scheduled for the week. A major focal point will be US CPI. Market expectations are set for deceleration in headline CPI from 3.7% yoy to 3.3%, while core CPI is anticipated to hold steady at 4.1% yoy.

This data comes under the microscope following remarks from Fed Chair Jerome Powell last week. Powell expressed that Fed is "not confident" about whether the current monetary policy is "sufficiently restrictive" to bring inflation down to the 2% target. His concerns echo the global sentiment that the final leg of the disinflation journey is often the most challenging.

Adding to the intrigue, University of Michigan's report last Friday revealed an uptick in year-ahead inflation expectations to a seven-month high of 4.4%, a significant jump from the previous readings of 4.2% in October and 3.2% in September. Notably, long-term inflation expectations have also escalated to 3.2%, marking the highest point since 2011.

Should the upcoming US CPI report deliver any unexpected upside surprise, it could heavily tilt the scales towards at least one more rate hike by Fed before the end of the tightening cycle.

Alongside CPI, US retail sales data will also be under scrutiny, offering insights into consumer behavior amidst the dual challenges of high inflation and elevated interest rates.

Across the Atlantic, UK CPI is another critical data point, with expectations pointing to a significant slowdown in headline reading from 6.7% yoy to 4.7% yoy, and core CPI anticipated to decrease from 6.1% yoy to 5.7%.

UK's disinflation process is clearly lagging other major economies. BoE Chief Economist Huw Pill recently suggested a strategy of maintaining current interest rates for an extended period to effectively combat inflation. This approach is likely to persist, barring any dramatic spikes in inflation figures. More intensify debate would start when disinflation finally approaches the "last mile".

Additional data releases such as UK job data, retail sales, German ZEW economic sentiment, and Japan's GDP will also be closely monitored. For Australia, employment report is due, but its impact might be overshadowed by crucial data from China, including industrial production and retail sales, which hold significant implications for the Australian economy.

Here are some highlights for the week:

• Monday: New Zealand BNZ services index; Japan PPI, machine tool orders.
• Tuesday: Australia Westpac consumer sentiment, NAB business confidence; UK employment; Swiss PPI; Eurozone GDP revision; Germany ZEW economic sentiment; US CPI.
• Wednesday: Japan GDP; Australia wage price index; China industrial production, retail sales, industrial production; UK CPI; Eurozone industrial production, trade balance; Canada manufacturing sales, wholesale sales; US retail sales PPI, Empire state manufacturing, business inventories.
• Thursday: Japan machine orders, trade balance; Australia employment; Japan tertiary industry index; Italy trade balance; Canada housing starts; US jobless claims, Philly Fed survey, import prices, industrial production, NAHB housing index.
• Friday: New Zealand PPI; UK retail sales; Eurozone current account, CPI final; Canada IPPI, RMPI; US building permits and housing starts.

USD/JPY Daily Outlook

Daily Pivots: (S1) 151.30 (P) 151.45; (R1) 151.68; More...

As USD/JPY's rise from 149.17 extends, immediate focus is now on 151.93 key resistance. Decisive break there will confirm resumption of long term up trend. Next target will be 157.69 projection level. On the downside, below 151.21 minor support will turn intraday bias neutral first. But near term outlook will stay bullish as long as 149.17 support holds, even in case of deep retreat.

In the bigger picture, immediate focus is now on 151.93 resistance (2022 high). Rejection by 151.93, followed by sustained break of 145.06 resistance turned support will argue that rise from 127.20 has completed, and turn outlook bearish for 137.22 support and below. However, sustained break of 151.93 will confirm resumption of long term up trend. Next target will be 61.8% projection of 102.58 (2021 low) to 151.93 from 127.20 at 157.69.

Economic Indicators Update

The Aussie dollar fell every day last week, losing about 1.5 cents despite the RBA rate hike. A resilient US dollar kept a lid on A$, adding to the focus on US CPI data this week. There will also be key Australian data, including Q3 wages and October employment.

The RBA raised its cash rate 25bp to 4.35%, a decision expected by almost all forecasters (including Westpac) and about 80% priced into money markets. Governor Bullock’s statement summarised the information received since the previous official forecasts in August as showing that “the risk of inflation remaining higher for longer has increased.” Both economic growth and inflation were higher than expected, inflation uncomfortably so.

This reasoning was widely expected but markets reacted to a surprise change in the wording of the closely watched final paragraph, from “some further tightening of monetary policy may be required” (used for the past 6 meetings) to “whether further tightening of monetary policy is required.” This change obviously doesn’t close the door on another hike but it was enough to leave AUD/USD down about half a cent on the day, at 0.6435.

The Aussie’s underperformance on many cross rates is surprising given that money markets continue to price considerable risk of further RBA tightening, in contrast to major central banks. A 5 December hike is widely viewed as a low probability given the limited data before then. But a further 20bp (80% chance of a hike) is priced by May 2024. So on short-end yield spreads, the Aussie’s support is still much improved over the past few weeks.

The Aussie extended its decline on Wednesday and especially Thursday when the US dollar posted sharp gains. The main catalyst was a speech by Fed chair Jerome Powell. He said that “we are not confident that we have achieved” a sufficiently restrictive monetary policy setting to return inflation to the 2% target. Powell’s remarks prompted a bounce in US yields, part of a sizeable gain for the week – the 2-year Treasury note yield rose from 4.84% to 5.06%.

We will hear plenty more from Fed officials this week, but not from Powell. The US focus will be on key October data – the consumer price index and retail sales. CPI is most market-sensitive, with consensus 3.3%yr versus 3.7%yr in September but CPI ex-food and energy unchanged at 4.1%yr.

Australia’s data calendar is very crowded. Westpac-MI November consumer sentiment will show the public response to the RBA’s Melbourne Cup Day rate rise. The Q3 wages survey will capture the July jump in the minimum wage. Westpac looks for 1.3%qtr, 3.9%yr, up from 3.6%yr in Q2. The report will be perused for indicators of wage pressures outside the award wages jump.

In its November statement, the RBA said that “Conditions in the labour market have eased but they remain tight.” In October, Westpac expects a 25k rebound in employment after the soft 7k gain in September. We look for the unemployment rate to remain at 3.6%, while softness in hours worked will also be monitored. As always, there is plenty of room for surprise in this report so AUD will be on edge.

The Aussie’s commodity price support remains mixed. The LME base metals index slipped -1.3% over the week, to be just 1% above year-to-date lows. Crude oil prices hit lows since July, some analysts blaming worries over China’s growth prospects. But iron ore rallied another 3.9% to $127/tonne, reaching highs since March and a long way above Australia’s federal budget assumptions.

The slide in US equities last Thursday coincided with a sharp fall in the Aussie, though equity weakness is often also correlated with a rise in US yields so it can be hard to assess which is impacting the A$ more. It may be in the week ahead that the US equity/rates nexus determines whether AUD/USD tests the bounds of its November range of 0.6318-0.6523.

Event risk

Singapore holiday (Mon), Aust Nov Westpac consumer sentiment, Oct NAB business confidence, Germany Nov ZEW investor sentiment, UK Sep average earnings, US Oct CPI (Tue), Aust Q3 wage price index, Japan Q3 GDP, China Oct retail sales, industrial production, UK Oct CPI, US Oct retail sales (Wed), Aust Oct employment (Thu), UK Oct retail sales (Fri)

Key Highlights

• EUR/USD is correcting gains from the 1.0750 resistance zone.
• A key declining channel is forming with resistance near 1.0690 on the 4-hour chart.
• Gold prices started a downside correction from the $2,010 level.
• USD/JPY regained strength and was able to clear the 151.50 resistance.

EUR/USD Technical Analysis

The Euro moved into a bullish zone above the 1.0620 level against the US Dollar. EUR/USD even tested the 1.0750 zone before the bears appeared.

Looking at the 4-hour chart, the pair traded as high as 1.0756 before there was a downside correction. The pair declined below the 23.6% Fib retracement level of the upward move from the 1.0516 swing low to the 1.0756 high.

It is still trading well above the 1.0620, the 100 simple moving average (red, 4 hours), and the 200 simple moving average (green, 4 hours).

There is also a key declining channel forming with resistance near 1.0690 on the same chart. If there is a fresh increase, the pair could surpass the channel resistance. The next key resistance is near the 1.0720 level.

The main resistance is still near the 1.0750 level. A close above the 1.070 zone could open the doors for more upsides. The next stop for the bulls might be 1.0880.

If not, the pair might start another drop below the 1.0650 support. The first major support is now forming near the 1.0635 level or the 50% Fib retracement level of the upward move from the 1.0516 swing low to the 1.0756 high, below which the pair could test the 1.0620 pivot level in the near term.

The main support sits near the 1.0520 zone. A downside break below 1.0520 might spark a sharp decline. The next key support sits at 1.0440.

Looking at USD/JPY, the pair is rising and might soon aim for a new high above the 151.75 resistance zone in the coming sessions.

Economic Releases

• European Commission releases Economic Growth Forecasts.

Japan's corporate goods price index, a key indicator of wholesale inflation, exhibited a significant slowdown in October, underscoring a continued trend of easing price pressures.

The index increased by just 0.8% yoy, falling short of the anticipated 0.9% yoy and marking its first dip below 1% since February 2021. This latest figure also represents the 10th consecutive month of slowing wholesale inflation.

The deceleration in the CGPI can be largely attributed to decreases in the prices of specific commodities. Notably, costs for wood, chemical, and steel products experienced declines, reflecting the broader impact of reduced global commodity prices.

Export price index saw an uptick from 0.5% yoy to 1.0% yoy. Import price index showed a lesser decline, moving from -15.5% yoy to -12.5% yoy.

Full Japan CGPI release here.

New Zealand's BusinessNZ Performance of Services Index experienced a notable dip in October, falling from 50.6 to 48.9, a level indicative of contraction in the sector. This decline also positions the index well below its long-term average of 53.5.

Activity and sales experienced a significant drop, moving from 50.9 to 47.4. There was also a downturn in employment, which decreased from 50.5 to 49.3. New orders and business fell as well,from 53.9 to 51.9. On a more positive note, stocks and inventories saw an increase, rising from 48.0 to 51.1, and supplier deliveries edged up slightly from 49.7 to 49.8.

Despite these declines, the proportion of negative comments in October decreased to 58.2%, a reduction from 61.8% in September and 63.9% in August, indicating a slight improvement in business sentiment.

BNZ Senior Economist Craig Ebert said that "combined, the PSI (48.9) and PMI (42.5) paint a picture of economic angst. This counsels caution around GDP for Q3, after it posted a surprising gain of 0.9% in Q2".

Full NZ BNZ PSI release here.

In a speech, Marion Kohler, Acting Assistant Governor of RBA, remarked that decline in inflation is expected to be a "more gradual process than previously thought."

This outlook stems from the current economic environment characterized by "still-high level of domestic demand" and "strong labour" alongside other cost pressures. These factors contribute to the prediction that inflation will hover just below 3% by the end of 2025.

The Assistant Governor pointed out that the recent trend of declining inflation has primarily been "driven by lower goods price inflation." In stark contrast, "domestically sourced inflation" – especially in the services sector – has shown resilience, being "widespread and slow to decline."

Kohler also underscored the nuanced challenges in the next phase of controlling inflation, which she anticipates to be "more drawn out than the first." This outlook aligns with experiences in other advanced economies that have faced similar inflationary patterns.

Furthermore, she cautioned about the potential for unforeseen challenges, citing the recent increase in fuel prices as an example of supply shocks that could unpredictably influence headline inflation.

Kohler emphasized the uncertain nature of the journey ahead in managing inflation, stating, "the road ahead could be bumpy."

Full speech of RBA Kohler here.

• Gold reversed from resistance level 1985.00
• Likely to fall to support level 1900.00

Gold recently reversed down from the key resistance level 1985.00 (which has been reversing the price from the middle of May) intersecting with the 61.8% Fibonacci correction of the downward impulse from May.

The downward reversal from the resistance level 1985.00 started the earlier short-term ABC correction 2.

Given the strength of the resistance level 1985.00, Gold can be expected to fall further toward the next round support level 1900.00.

• S&P 500 broke key resistance level 4385.00
• Likely to rise to resistance level 4450.00.

S&P 500 index recently broke the key resistance level 4385.00 (previous double top from October) standing near the 50% Fibonacci correction of the downward ABC correction 2 from July.

The breakout of the resistance level 4385.00 accelerated the active medium-term impulse wave (3).

Given the prevalence of the risk-on sentiment seen today, S&P 500 index can be expected to rise further toward the next resistance level 4450.00.

EUR/USD: How Mr. Powell Aided the Dollar

The past week witnessed few significant events, which reflected in EUR/USD pair's fluctuations around 1.0700. Notably, there was a slight increase in the Dollar Index (DXY), starting at 105.05 and reaching a peak of 105.97 by Friday, November 10. This growth was primarily attributed to the "hawkish" comments made by the Chair of the Federal Reserve.

On Thursday, November 09, Jerome Powell, participating in a discussion on monetary policy organized by the International Monetary Fund, affirmed that decisions at each Federal Reserve meeting are made "based on the totality of incoming data and its impact on the outlook for economic activity and inflation." Powell expressed uncertainty about the Fed's success in implementing sufficiently restrictive policies to gradually reduce inflation to 2%. Additionally, he noted the rapid growth of the U.S. GDP, suggesting that further economic acceleration could undermine the progress achieved in stabilizing the labor market.

Powell's comments were validated by the data on initial claims for unemployment benefits for the week ending November 04, totaling 217K, slightly below the previous figure of 220K. While the decrease is modest, it signifies a decline rather than an increase in unemployment.

Market interpretation of Powell's remarks hinted at the regulator's intention to raise the key interest rate once again. Consequently, the yield on 10-year U.S. Treasury bonds increased by almost 3%, surpassing the 4.6% mark, providing support to the dollar.

Downward pressure on EUR/USD was also exerted by macroeconomic statistics from the EU. In Germany, month-on-month inflation (CPI) showed a decrease from 0.3% to 0%. Retail sales volumes in the Eurozone as a whole declined by 0.3% in September after a 0.7% decrease in August. However, on an annual basis, this indicator dropped from -1.8% to -2.9%. Many analysts considered that such a decline in consumer activity ahead of the Christmas and New Year holidays could indicate the onset of a technical recession in the Eurozone before the end of the current year.

According to CME Group FedWatch data, markets are still pricing in a 90% probability that the Federal Reserve will leave the interest rate unchanged in December 2023. Economists at Finland's Nordea Bank believe that the U.S. Central Bank will maintain the federal funds rate at the current level of 5.50% even in 2024.

However, it seems that the interest rate hike cycle for the Euro has likely come to an end. According to strategists at Wells Fargo, one of the largest banks in the U.S., the bleak growth prospects for the Eurozone suggest that the tightening of the ECB's monetary policy is likely over. The recent successes in reducing inflation strengthen their belief that the peak of rate hikes [4.50%] has already been reached.

Both Nordea and Wells Fargo agree that the ECB will likely be compelled to start reducing borrowing costs in the early summer of next year. "We do not anticipate the first ECB rate cut until the June 2024 meeting, although thereafter, it will consistently cut the deposit rate by 150 basis points to 2.50% from mid-2024 to early 2025. Overall, we believe the risk of rate cuts by the ECB will be higher than previously expected or more aggressive."

Factors such as improved global risk appetite and a slowdown in the U.S. economy could support the Euro. However, the divergence in monetary policy between the Federal Reserve and the ECB will continue to exert downward pressure on EUR/USD. This applies to the currencies of other major countries as well – if their central banks keep current interest rates unchanged or, more so, begin to lower them, the dollar may further strengthen its positions.

EUR/USD concluded the past week at the level of 1.0684. Currently, expert opinions regarding its immediate future are divided as follows: 25% voted for the strengthening of the dollar, 60% sided with the euro, and 15% maintained neutrality.

In terms of technical analysis, 85% of oscillators on the D1 chart are colored green, and 15% are neutral-gray. Among trend indicators, the ratio is 70% to 30% in favor of green.

The nearest support for the pair is located around 1.0620-1.0640, followed by 1.0480-1.0520, 1.0450, 1.0375, 1.0200-1.0255, 1.0130, and 1.0000. Bulls will encounter resistance around 1.0740, then 1.0800, 1.0865, 1.0945-1.0975, and 1.1065-1.1090, 1.1150, and 1.1260-1.1275.

Unlike the past, rather calm week, the upcoming one is expected to be more eventful. On Tuesday, November 14, data on Consumer Price Index (CPI) in the USA will be released, along with preliminary data on Eurozone GDP for Q3. The next day will bring statistics regarding retail sales volumes and Producer Price Index (PPI) in the United States. On Thursday, November 16, as usual, data on the number of initial claims for unemployment benefits in the U.S. will be reported. Finally, on Friday, a crucial inflationary indicator, Eurozone Consumer Price Index (CPI), will be disclosed.

GBP/USD: Dangerous Proximity to 1.2200

Recall that on November 3, the British currency received a strong bullish impulse following the release of U.S. labor market data. At that moment, GBP/USD literally surged upwards. On Monday, November 6, the pound rose again, reaching a height of 1.2427. However, it decided that it was time for the bulls to stop celebrating and that it was time for GBP/USD to return to the 1.2200 zone.

The trend reversal to the south was aided by statistics from the United Kingdom. In October, business activity in the country's construction sector increased only slightly, from 45.0 to 45.6. Meanwhile, orders in this sector have been declining for the fourth consecutive month, and they are already 20% lower than a year ago. The average mortgage rate now exceeds 8%, and the number of approved mortgage loans has been declining for the fourth consecutive month. Therefore, expecting a significant increase in business activity here is unlikely.

Although the GDP of the United Kingdom grew slightly in September, from 0.1% to 0.2%, it is likely to show a decline in the third quarter, from 0.2% to 0.0%, and remain at 0.6% on an annual basis. In such conditions, the Bank of England (BoE) is unlikely to raise interest rates in the near future. But it won't lower them either. BoE Chief Economist Hugh Pill recently stated that there is no need to raise rates to contain inflation but it is necessary to ensure the restrictive nature of monetary policy. In other words, the rate will remain the same, at 5.25%. As mentioned earlier, in such a situation, the advantage is likely to remain on the side of the dollar. This was clearly demonstrated by the market's reaction after the speech by Federal Reserve Chair Jerome Powell on November 9. As soon as he made a vague hint about rates, GBP/USD rapidly plummeted.

The past week concluded with the pair settling at the level of 1.2225. According to economists at Scotiabank, the 1.2200 zone may serve as a short-term support point; however, weakness below this level indicates the risk of continued losses and a retest of the 1.2000-1.2100 area. Regarding the median forecast for the near future, 60% of analysts voted for a new upward move of the pair, 20% voted for a downward movement, and 20% took a neutral position. Among the D1 oscillators, 50% indicate a southward direction, 15% indicate northward, and the remaining 35% indicate eastward. Among trend indicators, only 15% point upward, while the overwhelming majority (85%) signal a downward trend. In the event of a southward movement, the pair will encounter support levels and zones at 1.2040-1.2085, 1.1960, and 1.1800-1.1840, 1.1720, 1.1595-1.1625, 1.1450-1.1475. In the case of an upward movement, resistance levels will be at 1.2290-1.2335, 1.2430-1.2450, 1.2545-1.2575, 1.2690-1.2710, 1.2785-1.2820, 1.2940, and 1.3140.

Noteworthy in the upcoming week's economic calendar for the United Kingdom is Tuesday, November 14. On this day, a comprehensive set of data on the country's labor market will be released. Moving on to Wednesday, November 15, when the value of the British Consumer Price Index (CPI) for October will be disclosed. Finally, rounding off the week on Friday, November 17, we anticipate the announcement of retail sales volumes in the United Kingdom.

USD/JPY: Tough Times for the Yen Now, Good Times Ahead

The Bank of Japan (BoJ), in its meeting on October 31, decided to keep its monetary policy parameters unchanged, a stance it has maintained for a very long time. The regulator not only retained the negative interest rate at -0.1% but also kept the yield on 10-year government bonds (JGB) at the existing level. Some market participants were hopeful that, following inflation growth data, the BoJ would raise the yield ceiling from 1% to at least 1.25%. (It's worth noting that the yield on similar U.S. securities exceeded 4.6% on November 9.) However, instead of adjusting to clear signs of increasing inflationary pressure, the Bank of Japan continued to ignore them. This pushed USD/JPY to a peak of 151.71. It would have remained there if not for the U.S. labor market data on November 3, which brought it down to 149.34.

Many analysts believed that officials from the Ministry of Finance and the Bank of Japan (BoJ), with their verbal interventions and incantations, would keep the USD/JPY pair at these levels. If real yen purchases by the authorities were to occur, the pair was expected to continue its decline. However, this did not happen, and on November 10, the pair once again rose to the height of 151.59, concluding the five-day period not far from it at 151.51.

"Hardly surprising is USD/JPY upward trend," commented strategists at Commerzbank. "At current exchange rates, investments in the Japanese yen are simply not particularly attractive for foreign (and domestic) investors. [...] As long as Japan's monetary policy does not undergo a radical change, USD/JPY is likely to test another high soon. The Ministry of Finance will probably react again with the threat of interventions. However, if the Bank of Japan cannot resist making 'dovish' comments, and if the Ministry of Finance indeed intervenes, it will likely only temporarily prevent the rise in currency rates."

According to Dutch Rabobank, the slow pace of Japan's monetary policy normalization suggests that USD/JPY may continue trading above the 150.00 level in the coming weeks. However, the fear of actual interventions from the Japanese Ministry of Finance may impede its upward movement, and the market is likely to be very reluctant to push the pair towards 152.00 and beyond.

Meanwhile, analysts at the Singaporean United Overseas Bank (UOB) believe that the risk of the pair breaking above last week's peak near 151.80 has increased. This level is not far from last year's peak around 151.95, and if the dollar can breach this resistance zone, it is likely to continue its ascent to the 152.50 level in the next 1-3 weeks.

Despite forecasts of growth, experts, echoing officials from the Ministry of Finance and the Bank of Japan, persist in stating that the current weakness of the yen is unjust. "Any increase in rate hike speculation will allow USD/JPY to move lower next year," predicts Rabobank. "We believe," they write, "that in the second half of 2024, the pair could return below the 145.00 level." "Fair value, based on spreads, equity yields, and trading conditions [...] suggests that the dollar is significantly overvalued and should trade closer to 144.50," according to economists at Scotiabank.

However, the question of when this "fairness" will be restored remains open. Soon, according to Societe Generale. In their view, the yen will undoubtedly continue to disappoint for some time, but the downward reversal in USD/JPY is getting closer and closer.

In discussing the near-term prospects of the pair, 55% of analysts anticipate the strengthening of the yen, while 10% have taken a neutral stance. About 35% voted for the pair breaking above 152.00 at the time of the review. Technical analysis supports the latter group, with 100% of trend indicators and oscillators on D1 painted in green.

The closest support level is situated in the 150.00-150.15 zone, followed by 148.45-148.80, 146.85-147.30, 145.90-146.10, 145.30, 144.45, 143.75-144.05, and 142.20. The nearest resistance lies at 151.70-151.90 (October 2022 high), followed by 152.80-153.15 and 156.25.

Aside from the release of preliminary GDP data for Japan's Q3 on Wednesday, November 15, no other significant statistics regarding the state of the Japanese economy are scheduled for the upcoming week.

CRYPTOCURRENCIES: Market Scandals and Records

The past week was marked by two events: the Ethereum scandal and the subsequent rise of bitcoin and the overall crypto market. Let's start with the scandal.

Former Ethereum platform consultant, lawyer Steven Nerayoff, accused Vitalik Buterin and Joseph Lubin of fraudulent activities. He believes that the ETH co-founders were involved in machinations that exceed the scale of crimes committed by FTX CEO Sam Bankman-Fried (whom, by the way, the jury found guilty, facing up to 110 years in prison).

"Buterin's claims of attempting to create a decentralized currency are fake. It was centralized from the beginning, and today, this influence is even more concentrated," Nerayoff writes. "A small circle of ETH investors controls about 75% of all protocol assets. So now it's easy to manipulate the price or even set its upper or lower limit. Most of the trading you see on exchanges is fake or fictitious to create the appearance of liquidity," he continues with his revelations.

Nerayoff also suspects the existence of a secret agreement between the Ethereum network administration and high-ranking US officials, such as SEC Chairman Gary Gensler and former SEC Chairman Jay Clayton, which was concluded during the initial stages of the altcoin's launch. Earlier, the lawyer speculated that the full-scale attack on Ripple by US regulatory bodies could have been sponsored by influential ETH holders. In his opinion, Ripple's adversaries may include individuals connected to the SEC, the Department of Justice, the FBI, and even some Ripple employees.

Interestingly, crypto investigator Truth Labs made similar revelations. However, unlike Steven Nerayoff, they believe that it is not the US but the Chinese conglomerate Wangxian Group that has decisive influence over the Ethereum network, and organizations close to the Communist Party of China (CPC) control almost 80% of mined ETH. Truth Labs also claims that Wangxian was one of the early sponsors of the Ethereum network in 2015. This group is also credited with creating Buterin's original wallets.

Whether Nerayoff and Truth Labs can substantiate their accusations is a big question. For now, the price of ETH is rising and reached a maximum of $2,130. As for the leading cryptocurrency, on Thursday, November 9, BTC/USD broke through the $37,000 resistance and set a local high at $37,948: it last traded there in May 2022.

The development of the bullish trend in BTC has led to the updating of annual and historical indicators. The net capital inflow into the crypto market over the last 30 days reached $11 billion, a record for 2023. Institutions added $767 million to crypto funds over the last six weeks, surpassing last year's record of $736 million and reaching the level at the end of 2021. Open interest in bitcoin futures on the Chicago CME Exchange is also at the December 2021 level ($3.7 billion). Long-term holders continue to accumulate bitcoins, bringing their holdings to 14.9 million BTC (more than 70% of the total BTC issuance). The volume of their purchases exceeded 25,000 coins per month. Short-term investors and speculators have also become more active, influenced by the FOMO (Fear of Missing Out) effect.

The list of records could go on, but what concerns everyone more is what comes next. If the current dynamics continue, demand for digital gold will keep growing, and supply will continue to decline. In that case, new local or even historical records and highs may be on the horizon.

We've repeatedly listed the factors contributing to the current BullRally. The key ones include the anticipated approval of SEC Bitcoin spot ETFs, the halving in April 2024, and the potential reversal of the Federal Reserve's monetary policy. Markus Thielen, Head of Research at Matrixport, reminded that after the end of the Fed's tightening cycle in January 2019, digital gold increased fivefold. However, Thielen cautioned against expecting a repeat of such dynamics but agreed that the leading cryptocurrency could "move significantly" in 2023 and 2024. According to his calculations, bitcoin tends to grow on average by 23% during the pre-Christmas period of November-December this year.

In addition to the growth drivers mentioned earlier, MicroStrategy founder Michael Saylor identified several factors that, in the medium term, could lead to a tenfold increase in the price of Bitcoin. According to Saylor, a positive development will be the soon-to-come new rules for accounting for Bitcoin reserves by companies in the United States. "In perspective, this will open the door for corporations to adopt Bitcoin as a treasury asset and create shareholder value," Saylor believes.

The entrepreneur also pointed to the positive effect of regulatory and law enforcement actions by authorities, including the trial of the former CEO of the collapsed FTX exchange. According to Saylor, "all these early crypto cowboys, tokens being unregistered securities, unreliable custodians" were passively benefiting bitcoin. To take the crypto industry to a new level, it needs "parental supervision." MicroStrategy's founder also thinks there is a need to "move away from the 100,000 tokens" that are merely used for speculation, back to bitcoin. "When the industry shifts its focus away from small shiny coins that distract attention and destroy shareholder value, I believe it will move to the next level, and we will get a 10x increase from the current level," Saylor concluded.

Note that this is not the most impressive forecast. CEO of ARK Investment, Catherine Wood, believes that in the next decade, the price of digital gold will exceed $1 million. (Note: Charlie Munger, Warren Buffett's longtime partner, recently criticized Bitcoin again, calling it a "tainted product" and adding to his previous descriptions like "the most foolish investment," "rat poison," and a "venereal disease.")

If we talk about the forecast for the near future, according to Rachel Lin, CEO of the SynFutures exchange, by the end of November, the first cryptocurrency could reach $47,000. "The past weeks have strengthened October's reputation as Uptober, with bitcoin gaining almost 29%. Even more interesting is that historically November outperforms October with an average bitcoin return of over 35%. If this November brings a similar profit, the asset will reach around $47,000," she calculated.

As an additional positive factor, Lin noted the growth in the number of users and transactions. In her opinion, the surge in spot trading volume with a noticeable increase in the number of payments over $100,000 is particularly noteworthy. "This is a clear indicator of increased institutional interest. Large players are consolidating positions in digital assets, especially in BTC," the specialist believes.

Despite the prevailing optimism, the analyst under the alias Doctor Profit believes that investors should be prepared for corrections and the emergence of "black swans," similar to those before the 2020 halving amid the COVID-19 outbreak. The expert does not exclude the possibility that bitcoin may drop to $26,000 before the upcoming April 2024 halving.

As of the writing of this review on Friday, November 10, BTC/USD is trading at $37,320. The total market capitalization of the crypto market is $1.42 trillion, compared to $1.29 trillion a week ago. The Crypto Fear & Greed Index has increased from 65 to 70 points and continues to remain in the Greed zone.

In conclusion of the review, let's delve into our irregular segment of crypto life hacks. So, what do you do if you've lost the password to your crypto wallet? The answer comes from Rain Lõhmus, co-founder of Estonian LHV Bank. During the ICO in July 2015, he acquired 250,000 ETH for $75,000. On November 10, 2021, when the price of Ethereum reached an all-time high of around $4,800, Lõhmus's holdings grew to $1.22 billion. Even now, they are valued at over $500 million. Throughout this time, the coins remained dormant. At some point, the businessman discovered that he had lost the wallet password and now intends to recover it using artificial intelligence. "My plan," he stated, "is to create an AI version of Rain Lõhmus and see if it can retrieve its memories." The banker shared his plans. (By the way, the artificial intelligence ChatGPT predicted that the value of Ethereum by the beginning of 2024 would range from $3,000 to $10,000. If this happens, Lõhmus could become a billionaire again—assuming he finds the wallet password.)