Get started

Esperio

EUR/USD Takes a Breather Ahead of U.S. CPI Data The EUR/USD pair is taking a breather on Wednesday, consolidating the previous weekly gain at the 1.0050 area after a three-day rally that saw the pair accumulating over 300 pips. The euro reached a two-month high of 1.0096 against the dollar on Tuesday as the U.S. currency weakened, weighed by a pullback in Treasury yields, while American citizens went to the polls for the midterm elections. At the time of writing, the EUR/US pair is trading at the 1.0055 zone, slightly below its opening price but over 3% above last week’s lows before the release of the U.S. nonfarm payrolls data. Recent USD weakness comes on the back of expectations of a Fed pivot – slowing down the pace of tightening after four consecutive meetings hiking 75 bps. Focus now turns to October’s CPI data, which will be released on Thursday and could trigger directional moves in the EUR/USD as investors await the outcome of the midterm elections. Ahead of the results, which could take weeks, polls point to a majority of Republicans in the House of Representatives and a close call in the Senate. From a technical perspective, the EUR/USD pair retains the short-term bullish bias according to indicators on the daily chart, while the price accomplished a daily close above the 100-day SMA, which is a positive signal. If the pair manages to break above the 1.0100 area, the next bullish targets are seen at 1.0197, September monthly high, and 1.0368, August monthly high. On the other hand, a loss of the 1.0030 area would expose the 20-day SMA at 0.9900 and risk a retest of last week’s lows at the 0.9730 area.
by Alex_Boltyan_FXAnalyst
EUR/USD Hits Two-Week Highs On U.S. Election Day The U.S. dollar remains on the defensive on Tuesday, with the EUR/USD advancing to fresh to a two-week high while investors remain cautious on the U.S. midterm election day. At the time of writing, the EUR/USD is trading at the 1.0065 zone, 0.45% above its opening price. The dollar saw a short-lived bounce earlier on the day but then turned lower alongside Treasury yields. The midterm election outcome might have an impact on fiscal policy as Republicans are ahead in the polls. Americans are voting to elect one-third of the Senate, all seats of the House of Representatives, and more than 30 governors. Meanwhile, the euro got some support from the European Central Bank Luis de Guindos' comments and better-than-expected data. The ECB Vice-President stated the Governing Council will continue to raise the rates to a level that ensures that inflation "will come back into line with the ECB's definition of price stability." Eurozone Retail Sales advanced 0.4% in September, just as expected, and recorded a 0.6% yearly decrease, much better than expectations of a 1.3% decline. From a technical standpoint, the EUR/USD short-term perspective remains tilted to the upside according to indicators on the daily chart as the price struggles to establish itself above the 100-day SMA. A decisive break above the 100-day SMA could pave the way to the 1.0100 area, ahead of September's highs at 1.0197. On the other hand, the following support levels could be faced at parity and then at the 20-day SMA standing around 0.9875.
by Alex_Boltyan_FXAnalyst
EUR/USD Approaches to Critical Resistance LevelThe EUR/USD pair advanced beyond parity on Monday as market sentiment improved and the dollar retreated versus most peers while investors continued to assess last week’s Fed statement and nonfarm payrolls data. At the time of writing, the EUR/USD pair is trading at the 1.0025 area, 0.67% above its opening price, after bottoming at a daily low of 0.9905 earlier in the session. The pair is advancing for the second day in a row, approaching a key resistance area as selling pressure continues to surround the U.S. dollar despite increasing yields. While the NFP report showed solid job creation, the increase was offset by the rise in the unemployment rate, which reached 3.7% in October. Ahead of October’s CPI report on Thursday, investors are now wondering whether the Fed will slow down the pace of rate increases going forward. The WIRP tool suggests that a 50 bps hike is already priced in for the December meeting, slightly favoring a 75 bps increase. Meanwhile, the greenback, measured by the DXY index, is down for a second consecutive day, posting a 0.58% daily loss at the 110.15 area. Across the pond, data showed German Industrial Production expanded by 0.6% on a monthly basis in September. The reading came much better than the expectations of a 0.8% fall and helped the euro gain traction earlier in the session. Regarding the European Central Bank policy, another 75 bps is about 60% priced in for the December meeting, although swap markets are pricing a lower terminal policy rate between 3.0-3.25%. From a technical perspective, the EUR/USD short-term outlook looks bullish, with indicators gaining traction on the daily chart and the pair trading above the 20-day SMA. The EUR/USD is about to retest the 100-day SMA as resistance, currently around 1.0045, which has not been broken out since February. Hence, a breach of that level could improve the EUR/USD medium-term outlook. The next resistance level is seen at 1.0100, and September’s monthly high at the 1.0200 area. On the other hand, the next support level is seen at the 0.9900 area, followed by the 0.9880 zone, where the upper end of a broken descending channel stands and the 20-day SMA at around 0.9857.
by Alex_Boltyan_FXAnalyst
EUR/USD Rallies Above 0.9900 After NFP DataThe EUR/USD advanced on Friday despite mixed Eurozone PMIs data and extended gains after the release of October’s U.S. nonfarm payrolls report. The EUR/USD pair reached a two-day high of 0.9940 as the greenback slumped across the board despite better-than-expected U.S. jobs data. At the time of writing, the EUR/USD is trading at 0.9923, posting a 1.8% daily gain, although still headed to a 0.4% weekly decline. The U.S. nonfarm payrolls report showed 261,000 new jobs were created in October, above the consensus of 200,000, while the September reading was upwardly revised to 315,000. The wage inflation rate, measured by the average hourly earnings, came at 0.4% in October and eased to 4.7% in the annual reading. Finally, the unemployment rate rose to 3.7% from 3.5% the previous month and above the consensus of 3.6%, overshadowing to some degree strong job creation. Although the strong payrolls keep supporting the case for the continuation of the tightening cycle by the Federal Reserve, the greenback came under pressure, while Treasury yields moved higher. Earlier on the day, data showed the Eurozone activity continued to contract in October at the sharpest rate in almost two years. The S&P Global Eurozone Composite PMI dropped to a 23-month low of 47.3 but came slightly above the consensus of 47.1. In addition, the German services PMI showed another contraction amid soaring inflation, higher interest rates, and uncertainty in the area. The German S&P Global services PMI came in at 46.5, above the expectations of 44.9 and slightly improving from the last reading of 44.9. According to the weekly chart, the EUR/USD pair holds a bearish outlook and will close this week lower after two consecutive gains. On the daily chart, however, the perspective has turned slightly positive following Friday’s bounce, with the price moving above both the 20-day SMA and the northbound of the descending channel drawn from February highs. A daily close above 0.9900 could favor a re-test of parity and a move towards October’s high of 1.0080. On the other hand, short-term support levels are seen at the 20-day SMA at the 0.9839 zone and the 0.9800 area, ahead of weekly lows at the 0.9730 zone.
by Alex_Boltyan_FXAnalyst
EUR/USD Falls To Two-Week Lows After Fed, Nonfarm Payrolls EyedThe EUR/USD fell for the fourth day in a row on Thursday and hit its lowest level in two weeks as the greenback continued to strengthen in the aftermath of the Federal Reserve decision and ahead of the October U.S. nonfarm payrolls report on Friday. At the time of writing, the EUR/USD pair is trading at the 0.9750 area, 0.67% below its opening price, and over 300 pips below last week's peak. The pair hit a low of 0.9730 earlier in the session, last seen on October 21. The EUR/USD has been moving steadily south, making lower lows and lower highs after being rejected by levels above parity heading into the Federal Reserve verdict. On Wednesday, the Federal Open Market Committee (FOMC) lifted the fed funds range by 75 basis points to 3.75%-4% as expected. In the subsequent press conference, Chairman Jerome Powell said that recent data suggested that the ultimate level of interest rates will be higher than anticipated and reaffirmed the Fed's commitment to cool inflation down. However, he acknowledged that the pace of tightening would need to slow eventually. After a short-lived pullback, U.S. yields and the dollar bounced significantly as markets understood Powell's message as the central bank will not be slowing down in December. In the meantime, European Central Bank President Christine Lagarde said on Thursday that a "mild recession" is possible but that it wouldn't be sufficient in itself to stem inflation. From a technical standpoint, the EUR/USD pair holds a short-term negative bias, with the price losing the support of the 20-day SMA and indicators heading down in negative territory on the daily chart. On the downside, the next support level could be faced at the 0.9700 area, followed by October’s monthly low of 0.9630. On the upside, short-term resistance is given by the 20-day SMA at the 0.9830 zone, followed by the 0.9900 area, where the upper side of the nine-month-long descending channel stands after a failed break as the EUR/USD couldn’t hold it as support.
by Alex_Boltyan_FXAnalyst
EURUSD Seesaws On Fed's Decision,Investors Decode Powell's WordsThe EUR/USD pair seesawed between gains and losses on Wednesday in the aftermath of the U.S. Federal Reserve's decision to raise rates by 75 basis points for the fourth meeting in a row, taking the federal funds' range to 3.75%-4.0%. Although market participants widely anticipated the decision, the accompanying statement was perceived as dovish as it mentioned the Federal Open Market Committee (FOMC) "will take into account cumulative tightening, policy lags, and economic and financial developments in determining the pace of rate hikes." However, during the press conference, Chairman Jerome Powell said that recent data suggests "that the ultimate level of interest rates will be higher than expected." Additionally, he stated that the FOMC needs to see inflation "coming down decisively and good evidence of that would be a series of down monthly readings," but that is not the appropriate test for slowing the pace of increases. Powell's comments failed to convince investors that a slowdown in tightening pace was imminent while lifting the terminal rate expectations, which in turn boosted U.S. yields and the dollar. The EUR/USD pair shot higher and hit a high of 0.9975 right after the statement, only to tumble toward a fresh weekly low of 0.9821 after the press conference. At the time of writing, the EUR/USD trades at the 0.9825 area, 0.49% below its opening price. From a technical perspective, the EUR/USD pair maintains a neutral to slightly bearish short-term bias as indicators are turning lower on the daily chart, while the price continues to post lower lows and has failed to sustain the channel as support. On the downside, the following supports are now seen at 0.9700, ahead of October's low at 0.9630. On the flip side, immediate resistances could be found at 0.9975 and parity.
by Alex_Boltyan_FXAnalyst
GBP/USD Retreats Below 1.1500 After U.K., U.S. DataThe GBP/USD trimmed intraday gains on Tuesday after the UK PMI data, while the dollar managed to shrug off early weakness following solid domestic figures and a bounce in Treasury yields. At the time of writing, the GBP/USD pair is trading at the 1.1480 area, posting a 0.20% daily gain after peaking at 1.1566 earlier in the session. S&P Global PMI showed the U.K. manufacturing sector contracted for the fourth consecutive month as the index fell to a 29-month low of 46.2 in October, down from 48.4 in September but above the earlier estimate of 45.8. Across the pond, U.S. manufacturing PMI recorded a slight expansion coming in at 50.2, beating the market consensus of 50 but decelerating its growth pace from its previous reading of 50.9. S&P Global reported weak demand conditions are dampening growth. On Wednesday, the Federal Reserve will announce its monetary policy decision. Market participants have completely discounted the fourth consecutive 75 bps. In addition, investors will eye the FOMC members’ economic projections, the dot plot, and any monetary policy forward guidance. From a technical perspective, the GBP/USD pair maintains a short-term neutral outlook as indicators are turning flat on the daily chart while the price consolidates in a wide range between the 20- and the 100-day SMAs. The RSI gained a slight positive slope above its midline, while the MACD prints lower green bars. On the upside, the next critical resistance stands at the 1.1600 psychological mark. A break above could pave the way towards the 1.1625 area and the 100-day SMA, currently at 1.1710. On the downside, immediate support could be found at the 1.1435 zone, followed by the 1.1400 area and at the 20-day SMA currently at 1.1310.
by Alex_Boltyan_FXAnalyst
EUR/USD Starts Eventful Week On The Back Foot The EUR/USD pair retreated on Monday as the euro lost momentum after Eurozone and German data, while the greenback firmed on the back risk aversion and higher U.S. bond yields ahead of the Fed's meeting on Wednesday. At the time of writing, the EUR/USD is trading at the 0.9890 area, 0.78% below its opening price. Deeping energy concerns and soaring inflation are the main factors weighing on the shared currency. While European Central Bank's President Christine Lagarde stated on Thursday that the ECB was expecting economic activity to contract significantly in Q3, Eurostat's preliminary reading revealed on Monday that the euro area Q3 GDP expanded at an annualized rate of 2.1%, matching the market's expectations. In addition, the eurozone inflation, measured by the HICP, jumped to 10.7% YoY in October, surpassing the market's expectations of 10.2% and accelerating from its previous reading of 9.9%. The greenback, measured by the DXY index, is trading at the 111.50 area fueled by the rise of the U.S. 10-year bond yields, which climbed back above 4%. The Federal Reserve will announce its rate decision on Wednesday. The WIRP tool suggests a 75 bps hike is completely priced in as the FOMC aims to keep their hawkish tone and to bring inflation down. From a technical perspective, the EUR/USD short-term bias looks neutral, as indicators in the daily chart are losing ground but remain in positive levels. The RSI holds a negative slope above its midline, while the MACD prints lower green bars. If the EUR/USD breaks decisively below the 0.9900 area – where the upper end of a descending channel traced from February highs stands – the short-term outlook might deteriorate, with the next target at the 20-day SMA at 0.9840 followed by the 0.9800 area. On the other hand, next resistance zones are seen at parity and the 100-day SMA at 1.0075.
by Alex_Boltyan_FXAnalyst
EUR/USD Trims Weekly Gains But Holds Critical Support LevelThe EUR/USD pair has continued to pull back on Friday, trimming previous weekly gains, although it remains poised to close above Monday's opening following mixed U.S. and European data. At the time of writing, the EUR/USD pair is trading at the 0.9930 area, 0.3% below its opening price and on track to post a 0.8% weekly advance, despite being rejected by the 100-day SMA earlier in the week. On the data front, the German annual inflation rate – measured by the HICP – soared in October and reached 11.6%, way higher than the market consensus of 10.9%. On the other hand, German's third-quarter GDP came in higher than expected. While European Central Bank's President Christine Lagarde stated on Thursday that the ECB was expecting economic activity to contract significantly in Q3, data revealed that the GDP of the largest economic block of the EU expanded at an annualized rate of 1.2%, beating the consensus of a 0.8% growth. However, the euro area outlook is still surrounded by uncertainty and didn't allow the euro to capitalize on the data. Across the pond, ahead of next week's Fed meeting, the PCE deflator showed prices grew at an annualized pace of 6.2% in September versus 5.8% the previous month. From a technical perspective, the EUR/USD short-term bias remains neutral as indicators have turned flat in the daily chart suggesting that the bulls are losing momentum. The price has printed lower lows and lower highs and approaches a broken-out descending channel to test it as support at the 0.9900 area. A break below this level could add pressure on the shared currency, with the following supports seen at the 20-day SMA at 0.9837 and the 0.9800 area. On the upside, the next resistance levels could be found at parity and then at 1.0080, where the 100-day SMA stands. After being rejected twice this week by this level, a break above would improve the euro's outlook for the short term.
by Alex_Boltyan_FXAnalyst
EUR/USD Loses Ground After ECB Rate Hike, U.S. GDP dataThe EUR/USD pair fell Thursday following the European Central Bank interest rate decision, which was followed by cautious comments from President Christine Lagarde during the press conference. At the same time, the greenback is gaining ground thanks to solid GDP readings. At the time of writing, the EUR/USD is trading at the 1.0000 area, 0.70% below its opening price, after being rejected from a high of 1.0093. The European Central Bank announced today its decision to hike rates by 75 basis points for the second time in a row. During the press conference, Christine Lagarde said economic activity in the euro area will likely have contracted "significantly" in the third quarter and will likely continue to do so for the rest of 2022 and 2023 due to higher prices and falling real wages. When asked about inflation and forward guidance, ECB President stated that "there is still ground to cover," but the future path and pace will be decided meeting by meeting and will remain data-dependent. Lagarde confirmed that higher rates are needed to reach their medium-term target, but she refrained from giving more insights into her estimations of the neutral rate. Meanwhile, the U.S. Bureau of Economic Analysis released its first estimates of the third-quarter Gross Domestic Product. Q3 GDP growth came in at 2.6%, above the 2.4% increase expected. Other data revealed that Durable Goods Orders increased by 0.4% in September, below the 0.6% expected. The focus will now shift to next week's Fed meeting when the broad market consensus expects another 75 bps hike. From a technical standpoint, the EUR/USD short-term bias looks neutral, according to indicators on the daily chart. The RSI has turned south but remains above its midline, while the MACD printed a lower green bar, indicating a dwindling buying interest. At the same time, the price remains capped by the 100-day SMA (1.0087) and moves to test the broken channel as support at the 0.9910 area. A break below could add pressure on the euro, with the following supports seen at 0.9830, 20-day SMA, and 0.9800. If the EUR/USD manages to overcome the 100-day SMA, the next resistances could be found at September's highs in the 1.0200 zone.
by Alex_Boltyan_FXAnalyst
EUR/USD Extends Gains Above Parity Ahead Of ECB MeetingThe EUR/USD pair is rising for the sixth day in a row on Wednesday as the greenback continues to face selling pressure while investors gear up for Thursday’s European Central Bank interest rate decision. At the time of writing, the EUR/USD pair is trading at the 1.0060 zone, 1% above its opening price. The euro reached its highest level in six weeks against the greenback at 1.0080 so far. On Thursday, the ECB will decide on monetary policy. Expectations remain hawkish as the WIRP tool suggests a 75 bps hike is completely priced in. Meanwhile, the swaps markets are betting on another 75 bps increase in December and a 50 bps increase at February’s meeting. Investors will watch President Christine Lagarde’s press conference, especially on economic assessments and forward guidance. At the last meeting, Lagarde stated that she only knew the terminal rates were “far away” from current levels, but that following decisions would depend on incoming data. Meanwhile, investors bet the FOMC will almost certainly hike by 75 bps on November 2. Still, swaps markets are building a stronger case for a 50 bps hike for the December 15 meeting, while a week ago probability was only 20%. Against this backdrop, the greenback has begun losing interest, with the DXY already down 1.8% this week. At the time of writing, the DXY is trading at the 109.80 area, its lowest level in five weeks. U.S. Q3 GDP data will also be on the docket on Thursday. From a technical perspective, the EUR/USD short-term outlook has turned more constructive as indicators gain ground on the daily chart and the price has broken out above a descending trendline drawn from February highs. However, the chart suggests that the pair could stage a technical correction before the next leg higher as the RSI is swiftly approaching overbought levels. On the upside, the next resistances are seen at the 100-day SMA, 1.0092, and the 1.0100 level, ahead of the September monthly high of 1.0197. On the other hand, support levels could be faced at parity and the 0.9900 zone, ahead of the 20-day SMA currently at 0.9823.
by Alex_Boltyan_FXAnalyst
Gold Prices Advance Ahead Of Central Banks’ MeetingsGold prices advanced on Tuesday, reversing some of their Monday's losses, as the dollar weakened across the board during the New York session, weighed by lower U.S. yields as investors brace for the major central banks' interest rate decisions. At the time of writing, the spot price, XAU/USD, is trading at $1,655 an ounce, 0.29% above its opening price. Still and despite the positive outcome, XAU/USD has posted a lower low and a lower high on Tuesday. Meanwhile, investors' focus now turns to the following interest rate decisions scheduled for this week and the next. The Bank of Canada, the European Central Bank, the Bank of England and the Federal Reserve, among others, will meet. For the ECB's decision on Thursday, investors expect another 75 bps hike announcement. For the Fed meeting on November 2, a fourth consecutive 75 bps increase is already priced in, while for the BoE's decision the following day, investors are expecting a 100 bps hike. Meanwhile, the U.S. dollar, measured by the DXY index, lost the 111.00 level and faced severe selling pressure after disappointing U.S. data. The Federal Housing Agency reported housing prices retreated 0.7% in August, while the CB Consumer Confidence Index fell to 102.5 in October. Furthermore, the Richmond Fed Manufacturing Index plunged to -10 in the same month. The yellow metal benefited from recession fears as the real economy is suffering from the tighter financial conditions imposed by the Fed. In addition, the U.S. Q3 GDP reading on Thursday could also have an impact on gold prices. From a technical view, the XAU/USD short-term outlook remains neutral to slightly bearish as the price remains below the main moving averages while indicators stay on the negative ground. The RSI has gained upward slope but remains below its midline, while the MACD seems poised to cross to positive territory. On the upside, the next resistances are seen at the 20-day SMA, currently around $1,670, followed by $1,685 and the $1,700 psychological level. On the downside, the next support could be found at the daily low of $1,638, followed by the $1,620 area, and then the cycle low of $1,614, struck on September 28.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Clings To Gains Near 0.9900The EUR/USD pair is treading water below the 0.9900 level on Monday after seesawing throughout the day following the release of worse-than-expected U.S. and EU PMIs data. At the time of writing, the EUR/USD pair is trading at the 0.9870 area, virtually unchanged on the day, after hitting a low of 0.9806 and a high of 0.9899 earlier in the session. "Eurozone economic contraction intensifies in October," read the Eurozone's PMI report from S&P Global. The EU PMI Composite fell to a 23-month low of 47.1 in October, according to flash numbers, while both manufacturing and services PMI missed the market consensus and fell to 49.9 (29-month low) and 48.8 (20-month low), respectively. Meanwhile, across the pond, the U.S. composite PMI fell to 47.3 in October, below the 49.1 expected. The services sector index fell to 46.6, missing by far the market's consensus of 49.2. The manufacturing PMI also pointed to contraction in the sector as the index fell to 49.9 (28-month low) and came in below the expectations of 51.2. As a reaction, the greenback extended last Friday's slide, with the U.S. Dollar Index retreating from a daily high of 112.53 and dipping below the 112.00 level. Substantial gains in Wall Street also weighed on the dollar and favored the EUR/USD consolidation near a three-week high of 0.9899. On Thursday, the European Central Bank will decide on monetary policy while the Federal Reserve will meet next week. From a technical standpoint, the EUR/USD short-term outlook is slightly tilted to the upside, according to indicators on the daily chart, which are gathering momentum, while the price has printed a higher high and a higher low. The RSI remains flat above its midline, while the MACD printed a higher green bar, favoring an upward move. On the upside, the next resistance level is seen at the 0.9900 area, followed by the 0.9950 zone, where the upper side of a downward channel drawn from February highs stands. A break above the latter would pave the way to parity. On the downside, support levels are seen at the 20-day SMA around 0.9785, followed by the 0.9700 level and then the 0.9630 zone.
by Alex_Boltyan_FXAnalyst
EUR/USD Ends The Week Above 0.9800, Improving Short-Term OutlookThe EUR/USD pair edged higher on Friday and managed to close the week with gains above the 0.9800 level, as the dollar retreated across the board alongside U.S. yields. At the weekly close, the EUR/USD pair was trading at the 0.9860 zone, up 0.8% on the day and 1.4% higher in the week, posting the first weekly advance in three. After hitting fresh cycle highs, U.S. yields pulled back on Friday as investors assessed the possibility the Federal Reserve might pivot policy following November's meeting. The rate on the U.S.10-year note peaked at 4.335% before sliding to 4.22% by the end of the New York session. In the meantime, stocks rallied in Wall Street, with the main indexes gaining more than 2% on the day. While a 75 bps rate hike by the Fed in November is fully priced in, there is some speculation the central bank might dial down the pace of tightening in the subsequent meetings. Still, for now, the WIRP tool point to a 57% probability of another 75 bps increase in December. From a technical perspective, the EUR/USD pair's short-term outlook has improved according to indicators on the daily chart, although the bigger picture remains tilted to the downside. As the price advances above the 20-day SMA, technical indicators hold onto the positive ground. The RSI has a positive slope above its midline, while the MACD prints taller green bars, indicating increasing buying interest. Next resistance levels could be faced at the 0.9900 psychological level, and the 0.9980 area, where the upper-side of a downward channel drawn from February highs stands. On the flip side, the next support is seen at the 20-day SMA, around 0.9775, followed by the 0.9635 area and the 0.9550 zone.
by Alex_Boltyan_FXAnalyst
1
Gold’s Recovery Limited By Soaring U.S. YieldsThe yellow metal recovered some ground on Thursday, with the gold spot price XAU/USD bouncing from a three-week low of $1,622 an ounce amid a broad-based pullback of the dollar despite the unremittable advance of U.S. Treasury yields. At the time of writing, the XAU/USD pair is trading at the $1,635 area, 0.3% above its opening price, having hit a daily peak of $1,645 earlier on the day. The dollar pulled back earlier on the day following somewhat dovish comments from Fed’s James Bullard. He said he believes the FOMC can conquer inflation without cracking the labor market. Still, the U.S. dollar managed to recover ground during the New York session as U.S. yields reached yet fresh cycle highs. The 10-year note rate reached a peak of 4.207%, its highest level since June 2008, while the 2-year note rate climbed to 4.614%. From a technical point of view, the XAU/USD short-term bias remains skewed to the downside as the price has posted a lower low and a lower high, while indicators remain in negative ground on the daily chart. The RSI has turned flat above oversold territory, while the MACD continues to print bigger red bars, signaling increasing selling interest. On the downside, the yellow metal could face the next support levels at the $1,620-15 area, followed by $1,600 and then April 2020 lows at the $1,575 zone. On the flip side, the next resistance point is seen at the $1,650 region, followed by the 20-day SMA at $1,665 and $1,700.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Edges Lower Amid Higher U.S. YieldsThe EUR/USD pair retreated on Wednesday as the U.S. dollar gained momentum on the back of risk aversion and a spike in the U.S. 10-year yield, which climbed to its highest level since 2008. Despite mixed data from the housing market, the dollar managed to keep its momentum. At the time of writing, the EUR/USD pair is trading at the 0.9775 area, 0.8% below its opening price, after bottoming at 0.9757 earlier in the session. The yield on the U.S. 10-year bond climbed to a high since July 2008 of 4.134%, boosting the greenback across the board. The U.S. Dollar Index, DXY, advanced 0.8% to trade around 112.90 after hitting a daily peak of 113.09. In the meantime, U.S. housing market data showed that the September Building Permits increased by 1.4% MoM, but the Housing Starts declined by 8.1% in the same period. The tighter financial conditions imposed by the Fed will likely continue to weaken the sector amid the economic slowdown and higher mortgage rates. Across the pond, the eurozone final inflation rate for September was slightly revised to the downside to 9.9%, but the data had little impact on the shared currency. From a technical perspective, the EUR/USD pair retains the short-term bearish bias according to indicators on the daily chart. The RSI fell back below its midline, while the MACD printed a lower green bar, signaling dwindling buying momentum. The immediate support level is seen at the 20-day SMA at 0.9767. A break below this level could pave the way towards the 0.9700 mark en route to the 0.9635 area. On the other hand, immediate resistance levels could be faced at the 0.9800 and 0.9900 zones. In case of breaking above, the bulls may gather enough momentum to retest parity.
by Alex_Boltyan_FXAnalyst
GBP/USD Retreats From Two-Week Highs Amid Fiscal Plan MayhemCable moved away from two-week highs on Tuesday as the greenback recovered ground across the board. The GBP/USD pair climbed to 1.1439 on Monday, its highest level since October 5, as the government continued to fold its mini-budget plan. However, the pair failed to hold above the 1.1400 mark. At the time of writing, the GBP/USD pair trades at the 1.1320 area, 0.30% below its opening price, after peaking at a daily high of 1.1410 earlier in the session. Brand new British Chancellor of the Exchequer Jeremy Hunt scrapped most of the tax cuts introduced last month by his predecessor Kwasi Kwarteng and announced that the energy cost support scheme would only run until April with the following revision. On the data front, investors will keep an eye on U.K. September’s inflation data to be released on Wednesday and its impact on tightening expectations for the next BOE meeting. As the members of the MPC need to regain investor confidence, the broad market consensus is that the interest rate hike will be at least 100 bps, while the swaps markets are pricing a policy rate peak at around 5.75%. No first-tier macroeconomic data will be published this week on the U.S. side. From a technical perspective, the GBP/USD pair maintains a short-term neutral bias slightly skewed to the upside, as indicators are gathering upward momentum on the daily chart. The RSI stands flat above its midline, while the MACD jumped to positive territory and signals increasing buying interest. Still, the Cable needs to break above the 1.1495-1.1500 area to improve the short-term outlook and pave the way towards the 1.1550 level and the 1.1600 zone. On the other hand, support levels are seen at the 1.1255 zone and the 1.1200 area ahead of the 20-day SMA, currently at 1.1130.
by Alex_Boltyan_FXAnalyst
1
EUR/USD Starts The Week On A Quiet Note After Data TurbulenceThe EUR/USD pair advanced slightly on Monday but remained trading within a narrow range as investors take the backseat ahead of a quiet week. With the most relevant data already behind, the U.S. bond yields and risk sentiment will dictate the pace of the markets in the following sessions. At the time of writing, the EUR/USD pair is trading at daily highs at the 0.9770 zone, 0.55% above its opening price. Markets’ focus now shifts to the ECB’s and Fed’s meeting after September’s inflation readings of both economic blocks. In the eurozone, CPI inflation rose to double digits, hitting 10% while in the U.S. inflation eased slightly to 8.2%, but the core reading jumped to a new 40-year high of 6.6%. In addition, last Friday, the 5-year Consumer Inflation Expectation from the University of Michigan survey jumped to 2.9% from 2.7%. Ahead of the central banks’ meetings, the WIRP tool shows that a 75 bps hike is practically fully priced in, but investors refrain from pricing a higher increase of 100 bps for the FOMC meeting on November 2. On the other hand, a 75 bp hike by the ECB on October 27 is nearly priced in, while the swaps market is pricing in 225-250 bps of tightening over the next 12 months, which would see the terminal rate peak between 3.0-3.25%. From a technical standpoint and according to the daily chart, the EUR/USD pair holds a short-term bearish perspective despite the fact the indicators are gaining some ground. The RSI trades with a positive slope below its midline, while the MACD printed a higher green bar, signaling bulls are gaining momentum. On the upside, the immediate resistance level is given by the 20-day SMA at 0.9775. A break above this latter could improve the short-term perspective for the euro and support the advance to the 0.9800 zone and then to the 0.9900 area. On the other hand, the next support levels are seen at the 0.9635 area, followed by 0.9600 and the cycle low of 0.9535.
by Alex_Boltyan_FXAnalyst
EUR/USD Bounces Above 0.9800 As Investors Assess CPI Data The EUR/USD pair bounced sharply after hitting fresh weekly lows as investors assess the U.S. consumer price index data. The pair retreated to a low of 0.9631 at the beginning of the American session after the U.S. CPI came in stronger than expected, although the EUR/USD took a U-turn afterwards to trade positively on the day. At the time of writing, the EUR/USD pair is trading at the 0.9800 zone, 1.03% above its opening price, having struck a daily peak of 0.9806. The U.S. consumer price index rose by 8.2% YoY in September, decelerating from its previous reading of 8.3% but coming in higher than the market's consensus of 8.1%. Core inflation reached a 40-year high of 6.6%, advancing from the August 6.3% reading and above the 6.5% rate expected. The greenback strengthened across the board immediately after the release of the U.S. CPI data. However, the tables turned as investors continue to anticipate, for now, a 75 bps rate hike by the Federal Reserve at November's meeting despite inflation not receding. The WIRP tool shows market participants already fully priced in a 75 bps hike, and chances of a 100 bps increase are barely 6.2%. From a technical perspective, the EUR/USD pair's short-term bias has turned neutral, although the dominant trend remains bearish. On the daily chart, the RSI has turned higher but holds below its midline, while the MACD has crossed into positive territory. On the upside, if the EUR/USD pair manages to establish itself above 0.9800 – where the 20-day SMA reinforces the psychological level – the next resistances are seen at 0.9900 and October 6 high at 0.9926 ahead of parity. On the downside, support levels could be faced at 0.9630 and 0.9600 ahead of the cycle low of 0.9535.
by Alex_Boltyan_FXAnalyst
EUR/USD Unfazed by FOMC Minutes, Eyes U.S. CPI Data The EUR/USD pair continues to gravitate around the 0.9700 level, unfazed by U.S. Producer Price Index data or the latest FOMC minutes as investors await the consumer inflation figures due on Thursday. At the time of writing, the EUR/USD pair is trading at the 0.9700 area seesawing between small gains and losses, having retreated from a daily high of 0.9735 and hit a low of 0.9667. The U.S. Bureau of Labor Statistics released August Producer Price Index data. The PPI inflation slowed down to 8.5% YoY from its previous reading of 8.7% and slightly above the 8.4% expected. On the other hand, the core PPI inflation (which excludes energy and food volatile items) slowed to 7.2% YoY from August’s 7.7% and came in below the market’s consensus of 7.3%. Meanwhile, the Federal Open Market Committee (FOMC) minutes offered no surprises and reaffirmed the FOMC’s strong commitment to returning inflation to the 2% objective, with many members stressing the importance of staying on this course “even as the labor market slowed.” Investors’ tightening expectations are still adjusting, and according to the WIRP tool, swap markets are pricing 18.7% odds of a 50 bps hike for the November meeting and 81.3% odds in favor of a 75 bps hike. Unless inflationary pressures show compelling evidence of a slowdown, FOMC members will most likely fulfill expectations and take the bigger hike From a technical standpoint and according to the daily chart, the EUR/USD pair holds a short-term slightly bearish perspective. The price stands below its main moving averages, while indicators fell into negative territory, although losing directional strength. The RSI holds below its midline but stands flat, while the MACD printed another shy red bar. On the downside, the following support levels are seen at the 0.9635 area, followed by the 0.9600 psychological mark and the cycle low of 0.9535. On the other hand, short-term resistances could be faced at the 0.9730 zone, followed by this week’s highs at the 0.9780 area. Still, the euro needs to regain the 20-day SMA, currently around 0.9810, to ease the immediate selling pressure and aim for a steeper recovery.
by Alex_Boltyan_FXAnalyst
Gold Treads Water Despite Lower U.S. YieldsGold prices tread water on Tuesday following four consecutive daily losses as the dollar’s rally lost its steam amid retreating U.S. Treasury yields. Spot gold, XAU/USD, is currently trading at the $1,670 area, virtually unchanged on the day, having hit and bounced off from a weekly low of $1,661 earlier on the day. Gold’s upside potential remains limited as Fed officials continue the drumbeat of hawkish comments. Chicago’s Fed Charles L. Evans said there is “great uncertainty about how restrictive policy must actually become” and added that he sees the nominal funds rate rising to a bit above 4.5% early next year. Elsewhere, Lael Brainard claimed that “monetary policy will be restrictive for some time to ensure that inflation moves back to target over time” and confirmed that the pace and size of future hikes will remain data-dependent in order to assess the effects of the contractive policies on economic activity, employment, and inflation. While the 10-year U.S. bond yield is trading at the 3.92% level, nearly 1% down on the session, the metal has been unable to pick up momentum as investors brace themselves for a busy week. September’s Consumer Price Index (CPI) data will be released on Thursday, with markets expecting the headline inflation to decelerate to 8.1% and acceleration of core inflation from August’s 6.3% to 6.5% YoY. September’s Producer Price Index (PPI) data will be published on Wednesday. From a technical perspective, the XAU/USD maintains a short-term bearish bias, with the price trading below its main moving averages, while technical indicators point to dwindling buying pressure on the daily chart. The RSI remains flat below its midline, while the MACD continues to print green but decreasing bars. On the upside, immediate resistance is seen in the 20-day SMA at $1,674, followed by the more relevant $1,700 psychological level and then the $1,730 area. On the other hand, the loss of the $1,660 support zone would expose the $1,640 area en route to the cycle lows at $1,615.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Ends The Week Lower After Failure to Regain ParityThe EUR/USD pair fell to a one-week low on Friday following the release of better-than-expected U.S. nonfarm payrolls data. The pair bottomed at 0.9726 and closed the session at 0.9740, recording a 0.52% daily decline and shedding 0.62% in the week. The U.S. Bureau of Labor Statistics reported the U.S. economy added 263,000 jobs in September, beating the market consensus of 250,000 but decelerating from its previous reading of 315,000. Meanwhile, wage inflation came in as expected, as Average Hourly Earnings advanced 0.3% MoM, while the unemployment rate dropped to 3.5%. As an immediate reaction, U.S. bond yields – and the dollar – pushed higher as the markets leaned in favor of a bigger rate hike by the Fed in the next November meeting. The WIRP tool suggests that investors are betting on a 76% probability of a 75 bps hike in the next meeting and on 24% odds of a smaller increase of 50 bps. Investors will keep an eye on the release of U.S. September’s CPI figures next week, especially core inflation. Unless inflationary pressures show compelling evidence of a slowdown, FOMC members will most likely fulfill expectations by acting aggressively. From a technical perspective, the EUR/USD maintains a bearish bias in the short term, according to indicators on the weekly and daily charts. At the same time, the EUR/USD pair trades below its main daily moving averages after a short-lived bounce seen earlier in the week, while it has returned to the mid-line of the descending channel drawn from February highs. Immediate support levels could be found at the 0.9635 and 0.9600 areas, ahead of the cycle low of 0.9535. On the other hand, the 20-day SMA offers resistance at the 0.9860 zone, followed by parity and the upper side of the channel around 1.0050.
by Alex_Boltyan_FXAnalyst
EUR/USD Resumes Decline And Slips Below 0.9800The EUR/USD pair retreated on Thursday as the U.S. dollar gained momentum on the back of risk aversion and higher U.S. bond yields. The European Central Bank's Monetary Policy Meeting Accounts revealed some "dovish" insights, which also weighed on the euro. At the time of writing, the EUR/USD pair is trading at the 0.9800 area, 0.8% below its opening price, having retreated from a daily high of 0.9926 and hit a low of 0.9788. The U.S. labor market showed some evidence of deterioration ahead of the government's nonfarm payrolls report. The Jobless Claims for the week that ended on September 30 increased to 219,000, above the market's expectations of 200,000. The nonfarm payrolls figures will give a better outlook on the current situation of the labor market. Economists expect a slowdown in U.S. job growth from August's 315,000 to 250,000 in September. If that's the case, the Fed may start to consider decelerating the pace of rate hikes. Across the pond, the ECB published the Monetary Policy Meeting Accounts, which showed some officials leaned towards a smaller hike of 50 bps in their last meeting. Additionally, the report remarked that the depreciating euro would increase inflationary pressures. Many officials called for the bank to act decisively now to prevent the need to hike at a more aggressive pace later. From a technical standpoint and according to the daily chart, the EUR/USD pair holds a short-term bearish perspective. The EUR/USD trades below its main moving averages, while its indicators fell into negative territory. The RSI has crossed its midline and points south, while the MACD printed a lower green bar, signaling bulls are losing momentum. The immediate support level for the EUR/USD is seen at the 0.9750 area, followed by the 0.9635 level, and then the cycle low at 0.9535. On the upside, the pair must regain the 20-day SMA, which stands at 0.9875. A break above the latter could pave the way to the 0.9900 zone and potentially parity.
by Alex_Boltyan_FXAnalyst