The Euro (EUR) remains subdued as Eurozone inflation confirms a decline to 2.9%, signaling economic challenges. The EUR/USD pair trades at 1.0870, up 0.17%, after a significant 1.68% gain earlier in the week following a weak US inflation report. The Eurozone's economic woes, highlighted by stagnation and Germany's economic struggles, prompt expectations of the European Central Bank (ECB) extending its rate hold. Despite ten consecutive rate hikes, the ECB faces a complex decision amid falling inflation and a lackluster economic outlook. Meanwhile, the US experiences economic slowdown signs, with lower-than-expected inflation, declining retail sales, and elevated unemployment claims. The US Federal Reserve's potential pause in its rate-tightening cycle adds further uncertainty to the global economic landscape.

The Euro (EUR) is experiencing a period of subdued trading activity as Eurozone inflation is confirmed at 2.9%, reflecting broader economic challenges and leaving the European Central Bank (ECB) facing a delicate monetary policy dilemma.

In the European session, the EUR/USD pair is trading at 1.0870, marking a modest increase of 0.17%. This follows a notable 1.68% gain earlier in the week, triggered by a soft US inflation report that led to sharp losses for the US Dollar.

Eurozone inflation, officially reported at 2.9% year-on-year in October, has affirmed the initial estimates. This figure represents a significant drop from the 4.3% recorded in September and aligns with consensus expectations. The decline in inflation is attributed to lower energy and food prices. On a monthly basis, inflation eased to 0.1%, down from 0.3% in September, in line with market forecasts. The core inflation rate, remaining notably higher than the headline figure, showed a modest decrease from 4.5% to 4.2%, matching consensus estimates.

The ECB opted to maintain rates at 4.0% in October, concluding a series of ten successive rate hikes. However, with inflation on a downward trajectory, expectations are mounting that the central bank will extend its hold on rates. This anticipation arises amid a challenging economic landscape, with the Eurozone economy stagnating. Germany, once a global economic powerhouse, is now contributing to the Eurozone's economic struggles.

ECB President Christine Lagarde hinted at the possibility of a prolonged rate hold, stating that the ECB would not be trimming rates in the "next couple of quarters." She acknowledged the significant decrease in inflation but suggested that rates may have peaked.

On the other side of the Atlantic, the United States is grappling with signs of an economic slowdown. Lower-than-expected inflation at 3.2%, a 0.1% decline in retail sales, and a three-month high in unemployment claims at 231,000 indicate challenges for the US economy. US Treasury yields fell to 4.45%, down from 4.53%, amid growing speculation that the Federal Reserve might pause or conclude the current rate-tightening cycle. The markets are pricing in a potential rate cut as early as May 2024.

In terms of technical analysis, the EUR/USD pair faces resistance at 1.0926, with additional resistance nearby at 1.0943. Earlier, the pair tested support at 1.0842, and further support is identified at 1.0799. Despite trading near the 1.0900 area, the US Dollar received support during the US session from higher Treasury yields and mixed market sentiment. The pair is poised to post its highest weekly close since August.

Looking at the technical chart, there is a suggestion of another decline to come, with the price approaching the 0.618 retracement level. This decline could represent a continuation of the broader market uncertainty and economic challenges, impacting both the Eurozone and the United States.

As the Euro continues to drift amid economic uncertainties, the global financial landscape remains complex, with central banks facing critical decisions that could shape the trajectory of monetary policy and impact currency movements.

ENTRY PRICE : 1.08900

STOP  LOSS : 1.08200

TAKE PROFIT : 1.09800

WTI crude oil plummeted on Thursday to its lowest level since July 10, as the decline accelerated due to increased inventories and breaking below critical technical support levels.

WTI crude briefly approached the $72 per barrel mark on Thursday, following a report on Wednesday indicating a rise in US crude inventories and a breach of the 200-day SMA. Simultaneously, Brent crude prices dipped below $77.00 per barrel, driven by algorithmic selling after falling below $80.00.

"Algorithm-driven" refers to the settlement of most commodity trades before the end of the trading day. The fair value of long and short positions on this trading day, calculated by algorithms, led to selling as their fair value was lower than the current price.

The recent drop in oil prices may be in sync with previous rounds of accelerated selling, creating a vicious cycle. In the absence of significant short-term bearish factors on the supply and demand side, the continuous breaking and falling of oil prices under the dual negative impact of increased supply and dim demand prospects cause distress (stampede events).

Setting aside the disturbances to oil prices caused by technical factors, we tend to believe that the crucial trend of oil prices in the next 4-6 weeks depends on the execution of OPEC+ production cuts. If OPEC+ (especially Saudi Arabia) fails to fulfill the promised production cuts made in early September, oil trades will return to macroeconomic fundamentals. Instead, if it complies with production cuts during November and December, oil prices will continue to be influenced by supply considerations.

WTI crude oil experienced a significant decline this week, with a drop of around 4.9% yesterday, reaching the lowest point in four months, marking the fourth consecutive week of decline.

Despite OPEC+ and the International Energy Agency (IEA) predicting supply tightness in the fourth quarter, disappointing global economic data and a substantial increase in US crude inventories, coupled with ongoing record production levels, intensified the following pessimistic sentiment.

From a technical perspective, earlier this week, WTI crude oil prices failed to recover the psychological level of $80.00, solidifying the bearish sentiment. We currently anticipate WTI crude oil prices to fall to the 161.8% Fibonacci retracement level of $95.50-$91.07, with a target of $68.85. Meanwhile, the range of $63.67-$66.94 is expected to provide significant support, potentially triggering a reversal.

Overall, WTI crude oil continues to be in a long-term range-bound pattern, oscillating in the range of $63.00-$96.00. In terms of trading, the strategy is focused on selling high and buying low.

Trading Direction: Short

Entry Price: 76.00

Target Price: 70.19

Stop Loss: 79.70

Valid Until: 2023-12-01 23:55:00

Support: 72.33, 70.24, 66.98

Resistance: 74.95, 76.75, 79.86

On Friday, USDJPY displayed a downward trend for the second consecutive day, falling below 150.30 during the European session. The asset faces new challenges due to the softening market risk sentiment. This is mainly attributed to a series of pessimistic economic data from the US, raising doubts about the Fed's inclination to raise interest rates and exacerbating the overall sentiment surrounding the asset.

However, in the short term, the downward trend of USDJPY receives some support amid the Bank of Japan's more dovish stance.

BOJ Governor Kazuo Ueda emphasized the central bank's commitment to maintaining an ultra-loose monetary policy, citing the need for patience in the face of uncertain inflation dynamics.

Ueda stated, "Trend inflation is likely to gradually accelerate toward our 2% inflation target through fiscal 2025. But this needs to be accompanied by a positive wage-inflation cycle." He added, "Uncertainty on whether Japan will see such a positive wage-inflation cycle is high."

Regarding the performance of the 10-year Japanese government bond yields, Ueda mentioned that, despite upward pressure, he does not expect them to significantly rise above the reference level of 1%.

Looking ahead, Ueda clarified the BOJ's stance on potentially ending yield curve control and negative interest rate policies, stating, "We will consider ending yield curve control and negative interest rates if we can expect inflation to stably and sustainably meet our 2% target."

He emphasized that the sequence of policy adjustments would depend on various factors, including economic conditions, price trends, and market developments.

In terms of the market, due to the continued decline in US Treasury yields, USDJPY fell below the 150.00 level on Friday, reaching a new low since the previous Monday. The US dollar also erased earlier modest gains against the euro, pound, and kiwi, while experiencing slight declines against the Swiss franc, Canadian dollar, and Australian dollar. The US dollar's decline poses a significant blow to its resilience this week, sparking renewed debates about the potential technical breakdown of the US dollar as the market anticipates the upcoming week.

Japanese Vice Finance Minister Ryosei Akazawa reiterated the government's stance on possible intervention in the foreign exchange market. He stated that the government would intervene in the forex market to curb excessive volatility but did not specify the specific exchange rate level that would trigger such intervention. Akazawa emphasized that any forex intervention would aim to address excessive volatility, not just respond to yen weakness.

However, considering the softer risk sentiment and the possibility of intervention, bears may take advantage of the weakened US dollar to further sell USDJPY. At this juncture, authorities could trigger a stampede event with only a small portion of funds, reminiscent of last year's intervention. The funds utilized for this intervention will be relatively inexpensive.

USDJPY continued its descent today. Despite bulls briefly testing last year's high at 151.94 and experiencing a significant pullback, the market showed impulsive movements due to extremely mild risk sentiment and a death cross signal in the daily chart structure.

Simultaneously, momentum indicators have reached a critical stage. The Average Directional Movement Index (ADX) is below the 25 threshold, indicating a lack of market trend. On the other hand, the Relative Strength Index (RSI), after hovering above the 50 midpoint for the fourth consecutive month, is now turning downward, signaling increased bearish pressure. Crucially, the stochastic oscillator is gradually declining, preparing to test the resistance set by the moving average line. Breaking below the average line would be considered a strong bearish signal.

Currently, USDJPY bears have breached the lower limit of the trend channel, the October 3rd high at 150.15, and the 50-day SMA at 149.35. If they break below 147.71 again, the downward path will be relatively clear, extending until the 144.99-146.65 range.

Overall, there is vitality in USDJPY bears, but the battle continues; bulls still aim to reclaim levels above 150.00. However, given the current situation, the path of least risk is downward. In terms of trading strategy, going short at highs is preferred.

Trading Direction: Short

Entry Price: 150.00

Target Price: 140.04

Stop Loss: 151.50

Valid Until: 2023-12-01 23:55:00

Support: 148.78, 148.20, 147.28

Resistance: 150.00, 150.17, 151.42

WTI crude oil plummeted on Thursday to its lowest level since July 10, as the decline accelerated due to increased inventories and breaking below critical technical support levels.

WTI crude briefly approached the $72 per barrel mark on Thursday, following a report on Wednesday indicating a rise in US crude inventories and a breach of the 200-day SMA. Simultaneously, Brent crude prices dipped below $77.00 per barrel, driven by algorithmic selling after falling below $80.00.

"Algorithm-driven" refers to the settlement of most commodity trades before the end of the trading day. The fair value of long and short positions on this trading day, calculated by algorithms, led to selling as their fair value was lower than the current price.

The recent drop in oil prices may be in sync with previous rounds of accelerated selling, creating a vicious cycle. In the absence of significant short-term bearish factors on the supply and demand side, the continuous breaking and falling of oil prices under the dual negative impact of increased supply and dim demand prospects cause distress (stampede events).

Setting aside the disturbances to oil prices caused by technical factors, we tend to believe that the crucial trend of oil prices in the next 4-6 weeks depends on the compliance of OPEC+ production cuts. If OPEC+ (especially Saudi Arabia) fails to fulfill the promised production cuts made in early September, oil prices will return to macroeconomic fundamentals. Instead, if it complies with production cuts during November and December, oil prices will continue to be influenced by supply considerations.

WTI crude oil experienced a significant decline this week, with a drop of around 4.9% yesterday, reaching the lowest point in four months, marking the fourth consecutive week of decline.

Despite OPEC+ and the International Energy Agency (IEA) predicting supply tightness in the fourth quarter, disappointing global economic data and a substantial increase in US crude inventories, coupled with ongoing record production levels, intensified the following pessimistic sentiment.

From a technical analysis perspective, earlier this week, WTI crude oil prices failed to recover the psychological level of $80.00, solidifying the bearish sentiment. We currently anticipate WTI crude oil prices to fall to the 161.8% Fibonacci retracement level of $95.50-$91.07, with a target of $68.85. Meanwhile, the range of $63.67-$66.94 is expected to provide significant support, potentially triggering a reversal.

Overall, WTI crude oil continues to be in a long-term range-bound pattern, oscillating in the range of $63.00-$96.00. In terms of trading, the strategy is focused on selling high and buying low.

Trading Direction: Short

Entry Price: 75.00

Target Price: 70.19

Stop Loss: 77.30

Valid Until: 2023-12-01 23:55:00

Support: 72.33, 70.24, 66.98

Resistance: 74.95, 76.75, 79.86

During Friday's (November 17th) Asian session, spot gold oscillated at highs, and it is now trading at 1982. Yesterday, the U.S. Congress passed a stopgap funding bill and avoided a government shutdown. The U.S. data were below expectations, showing signs of economic weakness, once again weighing on the dollar and boosting gold prices. Yesterday, the gold price first rose from 1956 to a high of 1970 and then pulled back to 1960. It surged again in the U.S. session, closing with a large bull candle. Recent U.S. economic data have been weaker than expected, so there are stronger expectations of the Fed stopping raising interest rates. In the short term, gold prices are expected to be stronger driven by sentiment. However, the dollar will not fall smoothly unless the U.S. Treasury yields turn downward, which is less possible for now. With the supply-demand structure deteriorating, perhaps the Fed will keep interest rates higher for longer than we expected, so the correction in gold prices is not yet over. But in the long run, we can still buy gold at lows. 

Data: U.S. Initial Jobless Claims reached 231,000 last week, a new high since the week of August 19th, and it was expected to be 220,000, compared to a revised number of 218,000 last month. By the week of November 4th, U.S. continuing jobless claims were 1.865 million, rising to the highest level in nearly two years, while the expected number was 1.847 million. U.S. industrial production fell 0.6% MoM in October, compared with an expected 0.3% drop and a 0.1% rise in the previous month. Manufacturing output fell 0.7% MoM, compared with an expected 0.3% drop and a 0.2% rise in the previous month. In addition, the U.S. NAHB housing market index in November was 34, declining for the fourth consecutive month, a record low since December 2022. 

News: Federal Reserve Bank of Cleveland President Mester said that while inflation has cooled, it will take time to fall to the Fed's target level of 2%. If the economy develops beyond expectations, monetary policy needs to remain flexible and respond appropriately to changing prospects and risks. 

Today's focus: No important data today, and the market is mainly digesting previous news.

There wasn't great space for gold trading in the Asian session yesterday. It once retraced to 1956 and then surged to 1965 with oscillations, failing to test the area from 1950 to 1953. Thus, there was no chance to go long. Nevertheless, gold pulled up quickly with the support of a weakening dollar in the European and the U.S. sessions, crossing above the weekly high of 1975 to reach 1980. It once touched 1988, tending to test the double shoulder levels between 1933 and 1997 and closing the daily chart with a big bullish candle. By extending this week's rebound, the 5-day SMA starts to cross above the 10-day SMA, activating the ascending trend. Furthermore, we clarified last week that when gold retraces enough in the short term, there would not be much downside space. Now, gold tests the previous high again. However, the momentum is insufficient, and the MACD is at a high level. Thus, gold will maintain oscillating for a while and could be stopped by the previous high to form a double-top structure. According to the 1H chart, MACD is in the overbought area, indicating the price will retrace. But, it is just a retracement. We should closely watch the support of the 60-day SMA at $1968. Today, the trading range will start from 1968 to 1995, and aggressive traders should buy low and sell high in this range.

Trading direction: Short

Entry price: 1997

Target price: 1968

Stop loss: 2002

Support: 1968.000/1950.000

Resistance: 1993.000/2008.000

Delve into the intricate world of currency movements as the New Zealand Dollar showcases resilience against the Pound. Unravel the underlying factors, from the nuanced reactions to U.S. inflation figures to the delicate balance of global and domestic influences. Analyst David Croy's insights shed light on the Kiwi's remarkable performance, while market dynamics prompt questions about potential shifts in New Zealand's economic cycle. Meanwhile, the Pound faces its own challenges, with soft UK CPI data impacting its position. Explore the complexities of these currency dynamics, marked by breakouts, retests, and the delicate interplay of economic indicators shaping the path forward.

In the initial half of the week, the New Zealand Dollar showcased resilience, emerging as the most robust among major currencies. This surge was prompted by a near-euphoric response to news indicating that U.S. inflation figures had fallen below expectations.

This exceptional performance may be attributed to a "tighter squeeze" experienced by the New Zealand Dollar compared to other currencies, stemming from relatively lower liquidity levels.

The decline in U.S. inflation instigated market speculation that the Federal Reserve had concluded its cycle of interest rate hikes. This, in turn, fostered expectations of rate cuts in 2024 and an optimistic global economic outlook. While these global factors provide support for the New Zealand Dollar, domestic influences may prove less favorable, particularly as expectations for Reserve Bank of New Zealand rate cuts gain momentum.

However, the trajectory from this point forward introduces vulnerability to lower rates. Market sentiment has shifted away from anticipations of OCR (Official Cash Rate) hikes, with current odds evenly split for a cut by May and a pricing of 23 basis points in cuts by July. Croy draws parallels with a similar shift affecting the USD, raising the question of whether such a scenario could unfold in New Zealand, given its leadership in the economic cycle.

Turning attention to the Pound to New Zealand Dollar exchange rate, there's been  a return to the midpoint of its range. This realignment is attributed to subdued UK Consumer Price Index (CPI) data, exerting downward pressure on the Pound.

Concerns persist regarding the implications of lower New Zealand rates on this currency cross.

Examining the GBPNZD chart since October, it reveals a break below a significant horizontal level of 2.078, confirming a breakout. Consequently, anticipation arises for a pullback and retest, followed by a subsequent upward movement.

Noteworthy developments in the UK add complexity to the situation. Economic data softening since August has led to an adjustment in market expectations for UK interest rates in 2024. A reported decline in UK inflation to 4.6% in October has further fueled predictions of rate cuts in 2024, contributing to a broad-based depreciation of the Pound.

Despite this, core inflation (5.7% year-on-year) and services inflation (6.6% year-on-year) remain elevated, potentially resisting a significant decline due to substantial wage increases in the UK. This factor may hinder the Bank of England from implementing rate cuts as promptly as implied by rates markets, thereby mitigating Pound Sterling weakness.

The prevailing narrative challenges expectations of an 80-basis-point interest rate cut by the Bank of England in the coming year, as viable arguments persist for an upward trajectory in UK interest rates. The GBP_NZD chart's breach of the key horizontal level at 2.078, confirmed by the breakout, underscores the anticipation of a pullback, retest, and subsequent upward movement.

ENTRY  PRICE :2.07600

STOP LOSS : 2.06400

TAKE PROFIT  :2.09600

EXP  : 30 NOVEMBER 2023