Sample Category Title

STOCKS

Equities have moved up well. Dow and Dax can rise towards 36500-37325 and 16400 respectively while Nikkei can test 31000 on the upside. Shanghai needs to sustain above crucial support in order to move up towards 3550 and higher. Nifty and Sensex looks bullish for the near term from current levels. Overall view is bullish for the next few sessions.

Dow (36327.95,+203.72, +0.56%) has surprised us by breaking above our expected resistance at 36100. The index can now target 36500, possibly even 37325 on the upside now. Overall view is bullish for the near term.

DAX (16054.36, +24.71, +0.15%) has broken the level of 16000 as well, and while above 16000 the view remains bullish to see a test of 16400 on the upside which is the next crucial resistance to keep an eye on.

Nikkei (29590.57, -21.00, -0.071%) has come down slightly. The view remains bullish to see a test of 30000/31000 while above 29500.A dip below 29500 if seen can take the index down towards 28000, negating our bullish view. In the medium term 31000 is an important and crucial resistance that can hold.

Shanghai (3493.63, +2.06, +0.059%) bounced back after testing the support at 3475/50.Our view is bullish to see a rise towards 3550 in the coming sessions. However, if the index falls below the support region of 3475-3450 then a fall to 3400/3375 cannot be negated. Watch price action near 3450/75 in the very near term.

Nifty (17916.80, +87.60, +0.49%) went up on Nov 4th, holding above support at 17600 and reducing chances of a possible fall to 17400 now. While 17600 holds, Nifty can rise towards 17800-18000 on the upside. There are higher chances of break above 18000, which could then target 18500.

Sensex (60067.62, +295.70, +0.49%) is bullish while above 60000 to see a rise towards 61000/62000 eventually.

COMMODITIES

Commodities have bounced well and could trade higher. Gold is bullish towards 1835/50 while Silver can rise to 24.65-25. Copper can rise towards 4.50/60. Brent and WTI can remain within 80-85 and 78-85/86 region for a few days.

Brent (83.78) and WTI (82.29) have risen as OPEC+, agreed on Thursday to stick to their plan to raise oil output by 400,000 barrels per day from December. Brent dipped to 80.26 last week. We expect resistance at 84/85 to hold for now and keep a range of 80-85 for a few days. WTI can remain within 78-85/86 region for sometime.

Gold (1819.40) and Silver (24.30) have surprisingly risen last week, stronger than expected. We now look for a possible rise to 1835/50 on Gold on a break above 1820 and a possible rise to 24.65/25 on Silver.

Copper (4.3625) has also bounced back and can rise towards 4.50/60.

FOREX

Currencies seem mixed just now as most of them have fallen and have supports coming up which could hold for the near term. Dollar Index can trade within 93.50-94.70-95.00 for the near term before breaking on either side while Euro looks bearish while below 1.16 for a test of 1.15-1.1490 on the downside initially. Overall trend looks bearish for Euro. EURJPY has bounced from 130.83 and may hold for a few sessions before again coming off from there. Pound and Aussie look bearish after a brief sideways consolidation initially. USDCNY can range within 6.3750-6.42 while USDINR can fall towards 74.20/74.00 in the near term.

Dollar Index (94.305) has immediate resistance near 94.70 and while that holds we may expect an initial rise to 94.70 before falling from there towards 94-93.50 on the downside. Overall range of 94.50-94.70/95.00.00 is likely to hold for the near term. Unless a break on either side of the range is seen, it would be difficult to see further movement beyond the mentioned range.

Euro (1.1558) tested 1.1513 yesterday before bouncing back slightly from there. Any bounce from 1.15 or near is likely to be limited to 1.16 for now before a sharper fall towards 1.15-1.1493/90 is seen initially and eventually a fall to 1.14 in the coming weeks. Overall trend remains bearish for Euro in the near term.

EURJPY (131.31) has bounced from 130.83 and while that holds, a rise towards 131.50-131.80 looks likely before again falling back towards 131-130 in the medium term.

Aussie (0.7392) bounced back sharply from 0.7350 but may range within 0.7350-0.7450 for the very near term before possibly breaking on the downside.

Pound (1.3476) fell sharply last week following the surprise decision by the Bank of England not to raise interest rates but it could in the coming months. The support mentioned near 1.3550 ha been broken sharply and while the Pound sustains lower, we may expect a test of 1.3320 before a reversal is seen. But some corrective bounce also looks possible from 1.34 in the near term. For now the bears look more strong and dominating the price that could keep pressure intact on the downside.

Dollar-Yen (113.60) came off sharply from 114.28 in the last couple of days and now looks likely to be ranged within a narrow range of 113.0/25-114.13/25 region. Any break on either side would then give clarity on further direction from here. The narrow ranged mentioned is within the broader range of 113-115 mentioned last week. Watch price action on a fall to 113.

USDCNY (6.3982) continues to remain ranged within 6.3750/38-6.42 for the near term.

USDINR (74.46) broke below 74.50 last week before closing for the Diwali holidays and had closed at 74.46 on the onshore market but as the nation celebrated Diwali, USDINR on the NDF declined and currently shows 74.19. This is holds can possible indicate a gap down opening for Dollar-Rupee today on the onshore markets and see an eventual fall towards 74 on the downside.

INTEREST RATES

US Treasury Yields have come-off sharply across tenors last week. There is room to dip further to test their near-term supports from where a corrective bounce is possible. The broader view remains bearish to break the supports eventually and see a deeper fall over the medium-term. The German Yields are coming down as expected and are keeping our bearish view intact. The yields can fall further in the coming days. The 10Yr and 5Yr GoI can oscillate in a sideways range for some more time.

The US 2Yr (0.41%), 5Yr (1.07%), 10Yr (1.47%) and the 30Yr (1.90%) Treasury yields have come-off sharply across tenors on Friday. The 10Yr has dipped below 1.5% and can now test 1.4%-1.35% on the downside while it remains below 1.5%. The 30Yr on the other hand can test 1.8%-1.75% on a further fall below 1.9% from here.

The German 2Yr (-0.75%), 5Yr (-0.59%), 10Yr (-0.28%) and the 30Yr (0.06%) have come down sharply towards the end of last week. The 10Yr has broken below -0.2% as expected and can now head down to -0.3% and -0.4%. The 30Yr has come down towards 0.05% in line with our expectation. A bounce from the 0.05%-0% region to 0.1% is possible before the 30Yr declines below 0% eventually.

The India 10Yr GoI (6.3577%) can remain in the 6.3%-6.4% range for some more time. We reiterate that 6.43%-6.45% will be a cap on the upside and a fall to 6.2% and lower levels is likely to be seen over the medium-term. A break below 6.3% will pave way for that fall.

The 5Yr (5.7271%) GoI on the other hand is stuck between 5.7% and 5.78%. We will have to wait for a breakout of this range to get a clear picture on whether the 5Yr can move up to 5.82%-5.85% or fall to 5.66% and lower.

EUR/USD: Focus on the US Labor Market

The central events last week were the meetings of two regulators, the US Federal Reserve and the Bank of England. Traders were also certainly interested in data from the US labor market, including such an important indicator as the NFP, the number of jobs created outside the US agricultural sector.

As expected, the Fed announced the curtailment of $120 billion quantitative easing (QE) program starting this month. The purchases of treasuries will decrease by $10 billion to $70 billion in November, mortgage bonds - by $5 billion, to $35 billion. The total reduction in the volume of asset repurchase will remain at the same level of $15 billion In December.

Commenting on the results of the last meeting, the head of the Federal Reserve Jerome Powell said that the time for raising interest rates has not yet come, since the labor market has not fully recovered and, according to forecasts, this will happen by mid-2022. The Fed will be patient until then. At the same time, Powell noted that the pace of reduction of incentives can be adjusted at the beginning of next year both towards acceleration and towards deceleration, depending on economic conditions.

It can be understood from this statement of the head of the FRS that the regulator keeps a path to retreat, and one should not expect an early cut in the ultra-soft monetary policy at the moment. This interpretation pushed the stock indices up again, and Dow Jones, S&P500 and Nasdaq updated their historical highs once again.

(It is worth noting that for the first time, transactions with NASDAQ 100 (Ustec.c) helped one of the traders to become one of the most productive NordFX clients, earning a profit of $38.124 in October).

So, the US Central Bank is ready to make and adjust its decisions depending on the market situation. As for the European Central Bank, unlike the Fed, it believes the markets are wrong. ECB President Christine Lagarde said Oo Wednesday November 03 that the bank's Governing Council has clearly formulated three conditions for raising interest rates, and that these conditions will not yet be met in 2022.

Investors were not pleased with the macro statistics of the Eurozone either. Composite PMI (Purchasing Managers Index) declined for the third month in a row, and the volume of industrial orders in Germany in September rose by only 1.3%, despite the fact that in August it fell by 8.8%. The growth in the yield of government bonds of the Eurozone countries, caused by their active sale, which reminds the markets of the prospects of the debt crisis, looks alarming as well.

All these factors put significant pressure on the common European currency and led to its fall, as a result of which the EUR/USD pair renewed its October lows.

Focusing on the recovery of the labor market, the head of the FRS outlined the priorities for his organization. Against this background, the dynamics of NFP (Non-Farm Payroll) becomes even more important. This US non-farm employment report is traditionally released on the first Friday of the month, this time November 05. According to its data, the number of new jobs in October was 531K (with the forecast of 425K and the previous value of 312K). In addition, the unemployment rate fell to 4.6% from 4.8% in September. Stock indices soared even higher against this background. As for the EUR/USD pair, after a correction, it completed the weekly session at 1.1567.

Naturally, most indicators on D1 face south. These are 100% among the trend indicators. The same could be said about oscillators. However, 10% of them have taken a neutral position, 10% are in the oversold zone and another 10% turned to the north at the very end of the week.

As for the experts, 25% vote for the growth of the pair, the same number is for its fall, and 50% is for the sideways movement. Support levels are 1.1535, 1.1500, 1.1485, 1.1425 and 1.1250. Resistance levels are 1.1575, 1.1615, 1.1665, 1.1715, 1.1800, 1.1910.

As for the upcoming release of macroeconomic statistics, data on the state of the consumer markets in Germany and the United States will be released on Wednesday, November 10, and the preliminary consumer confidence index of the University of Michigan will be announced on Friday, November 12. This index is an indicator of the US consumers’ confidence in economic growth and assesses their willingness to spend money.

GBP/USD: Shock from the Bank of England

The threat of stagflation, combining weak GDP growth and high inflation, is very dangerous for the British economy, which is still under pressure from the Brexit effects. According to forecasts of experts from the Bank of England, the annual inflation rate will accelerate to about 5% by April 2022 and will decrease to the target level of 2% as late as by the end of 2022. These are very high rates, and a few days before the meeting of the Bank of England, its head Andrew Bailey said that with such indicators, it may be necessary to act and raise interest rates more quickly than originally planned. As a result, the markets believed that the regulator would raise the key rate in November and... were deceived in their expectations.

The Monetary Policy Committee (MPC) of the Bank of England voted at its meeting on Thursday November 04 by seven votes to two to keep the interest rate at the previous level of 0.1%, and by six votes to three to keep the volume of asset purchases at £ 895 billion. Disappointed investors responded to the regulator with the collapse of the pound. The GBP/USD pair reached a local low, falling 270 points to 1.3425. The last chord of the week sounded at 1.3490.

Andrew Bailey stated in response to criticism that he misled investors, that "we never promised a November rate hike" and that "it is not my job to manage the markets." Sylvana Tenreiro, an external member of the Bank of England's Monetary Policy Committee, who believes that the Central Bank should not react to short-term shock situations and the problem of supply of goods will become less acute next year, spoke soothingly. The opposite position was taken by Deputy Head of the Bank Dave Ramsden, who said that he voted for a rate increase, as the shortage of labor is becoming more and more noticeable.

As some analysts note, there are currently growing expectations that London will decide to apply Article 16 of the EU Leaving Agreement. It is possible within the framework of this article for one of the parties to suspend part of the Brexit transaction if its further execution creates serious economic or other difficulties. That said, the EU's response could be more radical than the UK government expects. And this situation has and will continue to exert additional pressure on the pound.

The preliminary data on the UK GDP for the Q3 will be released on Thursday, November 11. They may affect market sentiment along with macro statistics from the US. In the meantime, analysts' opinion is as follows: 55% of experts bet on bears to win, 35%, along with graphical analysis on D1, support bulls, and the remaining 10% have taken a neutral position.

Among the oscillators on D1, 75% is colored red, 25% indicates that the pair is oversold. Trend indicators are 100% red. Support levels are 1.3470, 1.3420, 1.3380, 1.3200, the target of the bears is 1.3135. The resistance levels and targets of the bulls are 1.3510, 1.3570, 1.3610, 1.3735, 1.3835.

USD/JPY: Sideways Trend Again

The charts of the last three weeks showed that the upward momentum of the USD/JPY pair has dried up, and it has moved to its favorite activity: the sideways trend, limited by the range of 113.40-114.40. The yen rose on the back of the 10-year Treasury yield decline to 1.53% and continued to strengthen at the end of the working week, finishing at the lower boundary of this channel.

The current situation is clearly confirmed by the spread of expert opinions and indicator readings. Among analysts, 50% expect the pair to return to the upper border of the 113.40-114.40 channel, 25% to move along the 113.00 Pivot Point, and 25% to fall to the 112.00 area. It should be noted that, when moving from weekly to monthly forecast, the number of supporters of the latter increases to 50%.

There is a complete discordance among the oscillators on D1: 35% look north, 40% south, 15% give oversold signals and the remaining 10% turn neutral grey. There is a neutrality among the trend indicators: 50% side with the green ones, the other 50% side with the red ones. The resistance levels are 113.70, 114.40, 114.70 and 115.50, the long-term target of the bulls is the December 2016 high of 118.65. The nearest support level is 113.25, further targets are 112.00 and 111.65.

CRYPTOCURRENCIES: 9 Pages That Changed the World

It was 13 years ago, on October 31, 2008, that a person or a group of people known as Satoshi Nakamoto published the bitcoin white paper. The nine-page technical document described how the peer-to-peer payment system worked that would revolutionize the financial technology world. The bitcoin network was launched in January 2009. Satoshi Nakamoto disappeared in April 2011, and the public was never able to find out who wrote these 9 pages, which marked the beginning of a multi-billion-dollar industry. More precisely, multi-trillion, since the total crypto market capitalization reached a new all-time high last week, exceeding $2.7 trillion.

But the share of bitcoin has decreased again: its dominance index fell over the week from 44.15% to 42.84%. The historical record of $ 66,925, set by bitcoin on October 20, has not yet been broken. The bulls did try to update this result on Tuesday November 02, but having reached the $64,260 high, the BTC/USD pair reversed and rolled back to $60,000. The Crypto Fear & Greed Index is still in the Greed zone at 73 points (70 weeks ago).

While the main cryptocurrency is marking time, the attention of many investors has turned to altcoins. Ripple rose in price (XRP/USD), and the ETH/USD pair updated its all-time high once again, reaching $4.657 on Wednesday November 03.

Among the top altcoins, Ethereum attracts with its long history and use in many projects. The main driver of its growth in recent months has been the burning of coins for transactions on the network and the fact that the rate of their burning outstrips the rate of their production. However, after the activation of the London hard fork and the latest Ethereum 2.0 Altair update, commissions on the network have almost doubled, but the developers promise to solve this problem.

The past week is the sixth in a row since the beginning of the rise in the rate of Ethereum, which has added 75% since September 21. This token appears now to be targeting the $5,000 level. And this is not a limit. So a reputable cryptanalyst known as CryptosRUs predicts that ETH will soon reach $10,000. Moreover, he is confident that it is almost the last opportunity now to purchase this altcoin at a price below this mark. The forecast of Goldman Sachs specialists, who do not exclude that the ETH/USD pair may rise to $8,000 by the end of the year, is somewhere in the middle.

Of course, it would be unfair to say that the market has completely forgotten about bitcoin. Many investors and experts still single out this cryptocurrency. Whales added 142,000 BTC to their wallets in the last week of October alone, according to Chainalysis.

“Bitcoin is mathematics, mathematical purity” that allows it to maintain a level of predictability. Therefore, it outperforms the US dollar. This was stated by Apple co-founder Steve Wozniak in a recent interview with Yahoo Finance. In his opinion, regulators can create new paper notes on their whim, and therefore it is difficult to predict inflation of fiat money.

The author of the book “Rich Dad Poor Dad”, writer and investor Robert Kiyosaki, like Steve Wozniak, has criticized the administration of President Joe Biden and has declared his distrust the US federal government. He believes that the authorities "rip off people", promote inflation and do not try to reduce it. Get ready for an economic collapse and a new depression. Be smart. Buy gold, silver and bitcoin,” Kiyosaki urged. “I love bitcoin because I don't trust the Fed, Treasury, and Wall Street.”

Chinese crypto analyst Willie Woo said in an interview with Bitcoin Fundamentals that the current “bullish” growth cycle for bitcoin is very different from previous similar periods. Woo noted that the latest wave of BTC accumulation began at the end of last year, when institutional investors began to enter the crypto market, aiming at the long-term accumulation of digital assets. This factor, in his opinion, indicates that the current growth cycle will be longer, will last another six months or a year, and the price of bitcoin during this period will exceed $100,000.

The forecast of analysts at JPMorgan Chase looks much more modest. Cryptocurrencies can continue to grow, but are unlikely to be stable, so they cannot be recommended as a key asset, JPMorgan says. As for bitcoin, its fair value is estimated by JPMorgan Chase analysts at $35,000. They came to such an assessment based on a comparison with gold, noting that the volatility of the cryptocurrency is about 4 times higher than that of the precious metal. However, if BTC's volatility is halved, the $73,000 target will "look reasonable."

PayPal co-founder Peter Thiel doubts as well that now is the right time to buy BTC. “You know, bitcoin is already worth $60,000 and I'm not sure it should be bought aggressively. But, of course, this tells us that we are in a crisis moment,” Bloomberg quoted him as saying. At the same time, Thiel expressed regret once again that he had not invested more money in the first cryptocurrency when its price was significantly lower.

Daily Pivots: (S1) 152.65; (P) 153.21; (R1) 153.61; More...

Intraday bias in GBP/JPY remains on the downside at this point. The break of 55 day EMA dampened our original bullish view. Deeper fall could now be seen back to 148.93 structural support level. On the upside, break of 154.63 minor resistance will revive near term bullishness and turn bias back to the upside for 158.19 high.

In the bigger picture, rise from 123.94 is seen as the third leg of the pattern from 122.75 (2016 low). The stay above 55 week EMA affirms medium term bullishness. Current rise should now target 61.8% retracement 195.86 (2015 high) to 122.75 at 167.93 next. In any case, outlook will remain bullish as long as 148.93 structural support hold, even in case of deep pull back.

The financial markets are rather quiet today. Commodity currencies are paring back some of last week's losses while Yen is retreating. But there is no change in the overall outlook, with the decline in Yen crosses more likely to continue than not. Trading could remain subdued first in European session with a light economic calendar. But comments from a number of Fed officials, including Chair Jerome Powell, Clarida, Bowman, Evans and BoE Governor Andrew Bailey could trigger some volatility.

Technically, a major focus will be on whether EUR/USD would follow up with last week's downside breakout. For now, committed selling to push it through 1.1512 temporary low, and sustained trading below 1.1523 support, are needed to confirm resumption of the whole fall from 1.2348. At the same time, GBP/USD will need to break through 1.3410 support firmly to confirm resumption of the fall from 1.4248.

In Asia, at the time of writing, Nikkei is down -0.33%. Hong Kong HSI is down -0.57%. China Shanghai SSE is up 0.10%. Singapore Strait Times is up 0.45%. Japan 10-year JGB yield is down -0.0006 at 0.063.

BoJ opinions: Important to persistently continue with extremely accommodative monetary policy

In the Summary of Opinions of BoJ's October 27-28 meeting, it's noted that because of low inflation, it's important to persistently continue with extremely accommodative monetary policy even when pent-up demand increases." Also, BoJ should "persistently continue with the current monetary easing" so that "a rise in corporate profits leads to wage increases and the virtuous cycle from income to spending intensifies."

To "alleviate the effects of deterioration in the terms of trade", it's necessary to improve economic activity and raise inflation expectations so that "firms can smoothly pass on the rise in raw material prices to domestic selling prices." It's important to "improve the output gap" so that "the pass-through of price rises will be promoted..

Yen's depreciation reflected "differences in inflation rates and monetary policy stances among economies." It's important to consider the impact of rise in international commodity prices and Yen's depreciation. But, it is necessary to keep in mind that their effects on each economic entity are uneven depending on industry and size.

BoC Macklem: High inflation is transitory but not short-lived

BoC Governor Tiff Macklem said in in TV interview over the weekend that current high inflation will be "transitory but not short-lived".

I think transitory, to economists, means sort of not permanent," he said. "I think to a lot of people, transitory means it's going to be over quickly. … I don't know exactly what the right word is, but it's probably something like, 'transitory but not short-lived.'"

Macklem pointed to the latest economic projections, which indicated that inflation would rise further from current 18-year high of 4.4% to 5%, then gradually drop back to 2% by the end of next year. And that's what he meant by "transitory but not short-lived".

Bitcoin rises above 65k, Ethereum hits new record high

Bitcoin jumps above 65k handle today and rebound from 57762 finally picks up momentum after some setback. We're slightly favoring the case that it's ready to resume larger up trend to through 66982 record high. In that case, next target will be 161.8% projection of 29261 to 52922 from 39559 at 77842. However, break of 61613 support will delay the bullish case and extend the corrective pattern from 66982 with another falling leg.

A the same time, Ethereum also rises to new record high today as up trend extends. It's so far channeling well with steady upside momentum. Next target should be 100% projection of 1715.62 to 4025.10 from 2647.30 at 4956.78, which is close to 5k handle. For now, outlook will stay bullish as long as 4327.15 support holds, in case of retreat.

US CPI and PPI to highlight the week

Now that Fed has already laid out the path of tapering, main focuses will be on the timing of rate hike. That would very much depend on the path of inflation. Hence, US CPI and PPI could be market moving this week. Elsewhere, Eurozone Sentix and German ZEW, UK GDP, Australia employment and business confidence; New Zealand business confidence will also be closely watched.

As for central bank activities, BoJ will release summary of opinions while ECB will release monthly economic bulletin.

Here are some highlights for the week:

• Monday: BoJ summary of opinions, Japan leading indicators; Swiss unemployment rate; Eurozone Sentix investor confidence.
• Tuesday: Japan average cash earnings, current account; Australia NAB business confidence; Germany trade balance, ZEW economic sentiment; France trade balance; US PPI.
• Wednesday: Australia Westpac consumer sentiment; Japan M2; China CPI, PPI; Germany CPI final, industrial production; US CPI, jobless claims.
• Thursday: Japan PPI; New Zealand ANZ business confidence; Australia employment; UK GDP, productions, trade balance; ECB monthly bulletin.
• Friday: New Zealand BusinessNZ manufacturing index; Swiss PPI; Eurozone industrial production; US U of Michigan consumer sentiment.

GBP/JPY Daily Outlook

Daily Pivots: (S1) 152.65; (P) 153.21; (R1) 153.61; More...

Intraday bias in GBP/JPY remains on the downside at this point. The break of 55 day EMA dampened our original bullish view. Deeper fall could now be seen back to 148.93 structural support level. On the upside, break of 154.63 minor resistance will revive near term bullishness and turn bias back to the upside for 158.19 high.

In the bigger picture, rise from 123.94 is seen as the third leg of the pattern from 122.75 (2016 low). The stay above 55 week EMA affirms medium term bullishness. Current rise should now target 61.8% retracement 195.86 (2015 high) to 122.75 at 167.93 next. In any case, outlook will remain bullish as long as 148.93 structural support hold, even in case of deep pull back.

Economic Indicators Update

Bitcoin jumps above 65k handle today and rebound from 57762 finally picks up momentum after some setback. We're slightly favoring the case that it's ready to resume larger up trend to through 66982 record high. In that case, next target will be 161.8% projection of 29261 to 52922 from 39559 at 77842. However, break of 61613 support will delay the bullish case and extend the corrective pattern from 66982 with another falling leg.

A the same time, Ethereum also rises to new record high today as up trend extends. It's so far channeling well with steady upside momentum. Next target should be 100% projection of 1715.62 to 4025.10 from 2647.30 at 4956.78, which is close to 5k handle. For now, outlook will stay bullish as long as 4327.15 support holds, in case of retreat.

BoC Governor Tiff Macklem said in in TV interview over the weekend that current high inflation will be "transitory but not short-lived".

I think transitory, to economists, means sort of not permanent," he said. "I think to a lot of people, transitory means it's going to be over quickly. … I don't know exactly what the right word is, but it's probably something like, 'transitory but not short-lived.'"

Macklem pointed to the latest economic projections, which indicated that inflation would rise further from current 18-year high of 4.4% to 5%, then gradually drop back to 2% by the end of next year. And that's what he meant by "transitory but not short-lived".

In the Summary of Opinions of BoJ's October 27-28 meeting, it's noted that because of low inflation, it's important to persistently continue with extremely accommodative monetary policy even when pent-up demand increases." Also, BoJ should "persistently continue with the current monetary easing" so that "a rise in corporate profits leads to wage increases and the virtuous cycle from income to spending intensifies."

To "alleviate the effects of deterioration in the terms of trade", it's necessary to improve economic activity and raise inflation expectations so that "firms can smoothly pass on the rise in raw material prices to domestic selling prices." It's important to "improve the output gap" so that "the pass-through of price rises will be promoted..

Yen's depreciation reflected "differences in inflation rates and monetary policy stances among economies." It's important to consider the impact of rise in international commodity prices and Yen's depreciation. But, it is necessary to keep in mind that their effects on each economic entity are uneven depending on industry and size.

Full Summary of Opinions here.

Key Highlights

• EUR/USD is struggling to stay above the 1.1520 support.
• It is facing a major hurdle near the 1.1620 zone on the 4-hours chart.
• GBP/USD declined heavily below 1.3600 and 1.3500.
• The US Nonfarm Payrolls increased 531K in Oct 2021, better than the market forecast of 425K.

EUR/USD Technical Analysis

The Euro started a fresh decline after it failed to settle above 1.1650 against the US Dollar. EUR/USD declined below the 1.1550 support and is currently struggling to recover.

Looking at the 4-hours chart, the pair even spiked below the 1.1520 support. It settled well below the 1.1600 zone, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

A low was formed near 1.1513 and the pair is now attempting a recovery wave. On the upside, an immediate resistance is near the 1.1600 level.

The next major resistance is near the 1.1610 level and the 100 SMA. The 50% Fib retracement level of the downward move from the 1.1692 swing high to 1.1513 low is also near 1.1610.

EUR/USD needs to gain strength above 1.1610 and 1.1620 to start a fresh increase. The next major resistance could be 1.1650. Any more gains could lead the pair towards the 1.1720 level.

On the downside, an initial support is near 1.1520 level. The next major support is near 1.1500, below which there is a risk of a larger decline towards 1.1440.

Fundamentally, the US nonfarm payrolls report for Oct 2021 was released this past Friday by the US Bureau of Labor Statistics. The market was looking for an increase of 425K.

The actual result was better than the market forecast, as the US NFP increased 531K in Oct 2021. The last reading was also revised up from 194K to 312K. Besides, the US Unemployment rate declined from 4.8% to 4.6%.

Overall, the US Dollar could gain strength in the near term. Looking at GBP/USD, there was a sharp drop below 1.3500. Besides, USD/JPY corrected lower below 114.00.

Economic Releases

• Euro Zone Sentix Investor Confidence for Nov 2021 - Forecast 18.6, versus 16.9 previous.

[php_everywhere instance="1"]

According to the CFTC Commitments of Traders report for the week ended November 2, NET LENGTH of crude oil futures dropped -4 425 contracts to 419 293. Speculative longs dropped -4 425 contracts while shorts gained +2 885 contracts. For refined oil products, NET LENGTH for heating oil dropped -3 407 contracts to 22 384, while that for gasoline slipped -1 348 contracts to 49 697. NET SHORT of natural gas futures slipped -475 contracts to 137 713 during the week.

Gold futures’ NET LENGTH added +569 contracts to 215 129. Silver futures’ NET LENGTH dropped -4 417 contracts to 33 115. For PGMs,  NET LENGTH of Nymex platinum futures added +462 contracts to 15 364, while NET SHORT for palladium futures added +437 contracts to 3 391.