Bullish Trend Intact with Possibility of Short-Term Correction

Economic

Commodity

Summary:

On Wednesday, the US released the ADP employment data and Q3 GDP figures. The ADP report showed impressive gains, achieving the largest increase since July 2023, while the GDP growth rate came in below expectations, highlighting ongoing challenges in the US economy.

BUY XAUUSD

Close Time

CLOSED

2777.61

Entry Price

2835.00

2735.00

2667.04 +33.83 +1.28%

426.1

Pips

Loss

2735.00

2734.99

Exit Price

2777.61

Entry Price

2835.00

Fundamentals

On Wednesday, the ADP employment report, often referred to as the "small non-farm payrolls", indicated that US employment grew by 233,000 in October, marking the largest increase since July 2023. This result contrasted with expectations for a slowdown in employment due to factors such as the Boeing strike and two severe hurricanes impacting the East Coast in October.

Additionally, US GDP for Q3 showed an annualized growth rate of 2.8%, down 0.2 percentage points from Q2 and below the forecasted 3.1%, marking the first time this metric has missed expectations in 2023. This points to continued challenges in the US economy, with the market still expecting a 25 basis point rate cut in November.

Gold prices initially dipped but quickly resumed an upward trend following these data releases. The market appears unconcerned with the negative implications of the ADP data for gold, as concerns over the US economy lend support to gold prices.

It's also worth noting that Friday's release of the US non-farm payroll data is still highly anticipated. Although the ADP report and the official non-farm payrolls draw on different samples, they tend to show similar trends. As a result, the market awaits Friday's report for further confirmation of the employment situation.

Technical Analysis

Looking at the daily chart, gold prices have shown an upward trend and have consistently reached new highs. However, technical indicators are starting to shift as prices rise: the Relative Strength Index (RSI) has corrected from an overbought level, and momentum indicators have dropped from October highs. These shifts suggest possible short-term pullback pressure. Nonetheless, all moving averages are running upward, indicating that the long-term uptrend remains intact.

Bullish Trend Intact with Possibility of Short-Term Correction_1

From the 4-hour chart, gold has been consolidating below the 1.618 Fibonacci extension level at $2,790.64 after reaching a new high of $2,789.74, showing a weakening of upward momentum and increasing short-term pullback risk. If gold can break above the $2,790.00 resistance level, it would open up room for further gains, with the first target being the psychological level of $2800.00, followed by $2840.00.

In the short term, gold may pull back toward the $2,759.00 support level, but the overall trend remains bullish. Therefore, a trend-following approach to buying the dips is recommended.

Trading Recommendations

Trading Direction: Buy

Entry Price: 2762.00

Target Price: 2835.00

Stop Loss: 2735.00

Valid Until: Nov 14, 2024 15:00:00

Support: 2758.37, 2746.24, 2743.16

Resistance: 2790.64, 2800.00, 2840.62

Risk Warnings and Disclaimers

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Winkelmann

Commodity

Summary:

The fervor for gold is at an all-time high, but caution is warranted as the long positions become increasingly crowded. A correction in gold prices could be just around the corner.

SELL XAUUSD

Close Time

CLOSED

2778.32

Entry Price

2761.00

2806.00

2667.04 +33.83 +1.28%

173.2

Pips

Profit

2761.00

2760.95

Exit Price

2778.32

Entry Price

2806.00

Fundamentals

Over the recent period, despite the market's reduced bets on substantial rate cuts by the Fed and the continued strength of the US dollar and Treasury yields, gold has chosen to ignore these factors. Instead, it has surged under the safe-haven support provided by geopolitical tensions and uncertainties surrounding the US elections. The glittering trajectory of gold prices continues, seemingly detached from both fundamental and technicals, currently pressuring the $2800 mark.

However, as we approach this significant psychological threshold of $2800, there is a degree of hesitancy among bulls to continue chasing the uptrend. A pullback could be imminent. Nevertheless, the enthusiasm for gold remains high, with the upward trend in gold prices being very robust. Even if a correction occurs, it is expected to be relatively mild.

Technical Analysis

In the 4-hour chart, XAUUSD encountered resistance below $2790, with the upward momentum temporarily slowing down, and the short-term being severely overbought. There is a risk of overcrowded long positions, which could lead to a reversal and a drop in gold prices. However, the dominant trend is clearly upward. As gold prices repeatedly set new historical records, this trend becomes more entrenched. Every price dip is quickly followed by a rebound. The $2760 level might be a strong support point. Only a breach below $2750 could lead to a more profound adjustment.

For short-term traders, it is advised to exercise caution in chasing long positions. Traders can attempt to take a position for a pullback as prices approach $2788. The target is set at $2760, with the stop loss placed above $2800.

Trading Recommendations

Trading Direction: Sell

Entry Price: 2787

Target Price: 2761

Stop Loss: 2806

Support: 2760/2770

Resistance: 2790/2800

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

GBP/USD continues its downward trend, impacted by a strengthening US Dollar as the US presidential election approaches, fueling market caution.

SELL GBPUSD

Close Time

CLOSED

1.29700

Entry Price

1.27950

1.30500

1.27806 +0.00442 +0.35%

102.4

Pips

Profit

1.27950

1.28676

Exit Price

1.29700

Entry Price

1.30500

The GBP/USD pair is under pressure, extending losses into a second consecutive day as it hovers near 1.2950 in the Thursday Asian session. A potent combination of a strengthening US Dollar, market apprehension regarding the upcoming US presidential election, and the UK's budget announcement has exerted downward pressure on the Pound. This confluence of factors appears likely to set the stage for a challenging period for GBP/USD, with technical indicators further suggesting a bearish trajectory.

As the US presidential election nears, market sentiment leans toward caution. The latest Reuters/Ipsos poll reveals a tight race, with Vice President Kamala Harris holding a marginal 46% to 43% lead over former President Donald Trump. This close contest has led to heightened market uncertainty, with traders wary of potential policy shifts depending on the outcome. While Harris has made gains with white women voters, Trump’s growing appeal among Hispanic men has helped close the gap, contributing to significant volatility in the US Dollar as investors look to hedge against political risk.

Election cycles often amplify demand for safe-haven assets, and this year’s contest is no exception. The USD’s appeal has grown not only due to political uncertainty but also due to broader macroeconomic conditions and positive data points. ADP Employment Change figures released on Wednesday reported 233,000 new jobs in October, marking the largest monthly increase since July 2023. Although this was somewhat offset by a Q3 GDP growth rate of 2.8%, which fell short of expectations, the labor market data has added fuel to the Greenback’s upward momentum.

The UK’s budget, presented by the new Labour government, has introduced a sweeping £40 billion in tax hikes aimed at addressing long-standing public finance shortfalls. However, the tax-heavy approach has raised concerns about its impact on UK households and businesses amid an already challenging economic backdrop. With national insurance contributions—taxes on earnings paid by employers—seeing increases, the fiscal policy is expected to tighten disposable incomes, which may weigh on consumer spending and, in turn, economic growth.

The market’s reaction to the UK’s budget announcement has been swift, with the Pound falling following the release. This budget, as reported by CNBC, aims to balance the need for public funding with inflationary pressures and stagnant productivity. However, traders remain skeptical of the budget’s efficacy in addressing deeper structural issues in the UK economy. Additionally, the timing of such a fiscal package could strain the GBP further as markets assess the long-term effects of increased taxation on an economy struggling to regain post-Brexit footing.

Looking ahead, market participants are closely watching key US economic data points that could add momentum to the USD’s recent rally. The PCE inflation report on Thursday and Friday’s Nonfarm Payrolls (NFP) figures are critical indicators for gauging the US Federal Reserve’s likely stance on interest rates. Strong results in either could see the Greenback extend its gains, amplifying the downside for GBP/USD.

Meanwhile, a keynote speech by Bank of England Deputy Governor Sarah Breeden at a joint conference hosted by the Hong Kong Monetary Authority and the Bank for International Settlements is also under scrutiny. Breeden is expected to discuss the “Opportunities and Challenges of Emerging Technologies in the Financial Ecosystem,” which may provide insight into the BoE’s policy outlook in response to evolving financial landscapes. However, without clear indications of a rate hike or dovish signals, GBP/USD may remain at the mercy of broader US Dollar trends.

Technical Analysis

From a technical perspective, GBP/USD's inability to sustain levels above 1.3000 underscores a bearish correction, retracing gains from a recent bullish wave. Current trading action suggests the pair is likely headed toward 1.2974, a level that could act as a temporary support before additional downside exploration.

The pair’s movement below the 50-day Exponential Moving Average (EMA) further underscores a bearish bias, indicating that GBP/USD might struggle to break out of its current downtrend. For the bearish trend to continue with greater certainty, the pair must maintain its hold below the 1.3000 resistance level. The anticipated trading range for today sits between 1.2860 (support) and 1.3010 (resistance), with technical indicators aligning with a bearish outlook.

TRADE RECOMMENDATION

SELL GBPUSD

ENTRY PRICE: 1.2970

STOP LOSS: 1.3050

TAKE PROFIT: 1.27950

Risk Warnings and Disclaimers

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Eva Chen

Economic

Commodity

Summary:

The market is absorbing the risk premium associated with the U.S. elections, leading to a continued surge in gold prices. Goldman Sachs anticipates that gold prices will rise above previous expectations, with a target set at US$2,900.

BUY XAUUSD

Close Time

CLOSED

2781.45

Entry Price

2889.00

2698.00

2667.04 +33.83 +1.28%

834.5

Pips

Loss

2698.00

2697.30

Exit Price

2781.45

Entry Price

2889.00

Fundamentals

The gold prices have continued its historic rise today, reaching an intraday high of US$2,789. This year, gold has demonstrated remarkable strength, with prices increasing by approximately 35% due to a variety of global factors driving investor demand.

As the market continues to absorb the risk premium associated with the U.S. presidential election, gold prices have sustained their upward trend. In the betting markets, Trump's advantage over Harris is widening, raising concerns about tariffs, inflation, and fiscal issues. Given the volatility of the electoral landscape and geopolitical uncertainties, maintaining long positions in gold and other defensive assets remains appealing in the short term.

Goldman Sachs projects that by early 2025, gold prices will reach US$2,900 per ounce, surpassing their previous forecast of US$2,700. This optimism is largely attributed to a surge in gold purchases by central banks, particularly those in emerging markets. Furthermore, Goldman Sachs anticipates that by December 2025, gold prices will increase by approximately 10%, reaching US$3,000.

Technical Analysis

The gold market experienced a significant rise on Wednesday, reaching a new historical peak. Technically, the overnight breakout from the trading range established over the past week is viewed as a new bullish trigger. Meanwhile, momentum indicators remain bullish.

If the bulls maintain their confidence, they may continue to drive prices higher, with the next target being the psychological level of 2,800. Given the current demand for safe-haven assets, upcoming events in the next week could lead to a stronger market rebound.

On the other hand, any substantial correction is likely to find solid support near the trading range. The initial support level is around the 2,750 range, and some subsequent selling could push gold prices further down to the intermediate support level of 2,732-2,730. This could be followed by a decline to the 2,715 range with the next significant level at 2,700. A breach of this level would open the door for a drop towards the next relevant support zone at 2,675.

Overall, due to ongoing concerns regarding major upcoming events in the U.S., the demand for this safe-haven asset remains robust, suggesting that gold prices may rise again.

Trading Recommendations

Trading Direction: Buy

Entry Price: 2757

Target Price: 2889

Stop Loss: 2698

Deadline: November 08, 2024 23:55:00

Support: 2757, 2735, 2717, 2708

Resistance: 2789, 2800, 2812, 2826

Risk Warnings and Disclaimers

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Eva Chen

Forex

Summary:

Germany and the Eurozone's quarterly Gross Domestic Product (GDP) exceeded market expectations, bolstering the euro. The EURGBP rose as the British pound faced challenges ahead of the autumn forecast statement.

BUY EURGBP

Close Time

CLOSED

0.83467

Entry Price

0.86530

0.81700

0.82723 -0.00105 -0.13%

41.7

Pips

Profit

0.81700

0.83884

Exit Price

0.83467

Entry Price

0.86530

Fundamentals

The EURGBP has regained its recent losses, trading around 0.8350 during the European session on Wednesday.

The increase in the EURGBP is attributed to Germany and the Eurozone's quarterly GDP figures exceeding market expectations, which bolstered the euro.

Data released on Wednesday indicated that the eurozone's GDP grew by 0.4% quarter-on-quarter in the third quarter, surpassing the anticipated 0.2%. Germany's performance was particularly surprising, with a quarter-on-quarter GDP growth of 0.2%, while a contraction of -0.1% was expected, allowing the largest economy in Europe to narrowly avoid recession. France also outperformed other countries, with a quarter-on-quarter GDP growth of 0.3% this quarter.

Following the data release, the probability of the European Central Bank (ECB) lowering the deposit reserve rate by 50 basis points in December has decreased from 45% to 22%. (bullish for the euro.)

Additionally, the British pound has weakened ahead of the upcoming autumn forecast statement in the UK. This will mark the first budget announcement by a Labour government in 15 years.

According to government sources cited by Reuters, Chancellor of the Exchequer Rachel Reeves plans to implement approximately £40 billion (US$52 billion) in fiscal measures, primarily through tax increases, to fulfill her commitment to fund the government's daily expenditures. This could potentially boost spending and instill confidence in the UK bond market regarding the government's growth strategy. While the pound may remain largely unaffected, this scenario is still largely speculative.

Support at the Eight-year Bottom Remains Robust_1

Technical Analysis

The EURGBP has continued to fluctuate at the lower end of its range over the past week without any significant rebound, until a strong surge occurred on Wednesday following the release of Germany and Eurozone GDP data, breaking through the 20-day SMA at 0.8350, temporarily halting further declines.

From the current structural trend of the EURGBP, today's bullish rebound aligns with established expectations and represents a normal reaction to the price reaching the lower boundary of its range. The potential for a robust surge is highly anticipated, especially with the upcoming U.S. Elections likely to elevate risk sentiment.

Overall, while momentum indicators still point towards a downward trend, the support at the eight-year bottom remains intact. We maintain a bullish outlook on the buyer's market.

Trading Recommendations

Trading Direction: Buy

Entry Price: 0.8330

Target Price: 0.8653

Stop Loss: 0.8170

Deadline: November 14, 2024 23:55:00

Support: 0.8295, 0.8276, 0.8250

Resistance: 0.8353, 0.8371, 0.8425

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Summary:

The USDCAD continues to attract buying at the dips, supported by various factors. The Bank of Canada's (BOC) ongoing interest rate cuts have contributed to the weakening of the Canadian dollar.

BUY USDCAD

Close Time

CLOSED

1.39152

Entry Price

1.40590

1.38000

1.41189 -0.00260 -0.18%

20.0

Pips

Profit

1.38000

1.39352

Exit Price

1.39152

Entry Price

1.40590

Fundamentals

On Wednesday during the European session, the USDCAD approached its highest level since August 5, fluctuating around the 1.3920-1.3925 range, seemingly poised to continue the upward trend observed over the past month. Various factors may continue to exert pressure on the Canadian dollar, coupled with a resurgence of buying interest in the U.S. dollar, affirming the recent positive outlook for the USDCAD.

Meanwhile, the dovish remarks from BOC Governor Tiff Macklem have further depressed Canadian dollar assets.

Earlier, Macklem explained the rationale behind last week's 50 basis point rate cut during a session of the House of Commons Finance Committee, emphasizing that "inflation has now returned to the 2% target." He highlighted that Canada is currently experiencing a "low inflation" period, with the BOC's primary objective being to "maintain a low and stable inflation rate" while successfully "stabilizing the economy."

Macklem noted that interest rate cuts are also aimed at "stimulating a rebound in demand" while the economy remains "weak". Looking ahead, the BOC anticipates that, supported by lower interest rates, the Canadian economy will "gradually" strengthen in 2025 and 2026.

If economic conditions align with the BOC's outlook, Macklem expects to "further reduce the policy interest rate" to sustain demand and keep inflation stable around the target.

However, he clarified that decisions on timing and scale will be data-driven, with BOC will take monetary policy decisions "one at a time".

On the other hand, the U.S. dollar continues to attract some buying at the dips, preventing a slight pullback from the highest levels since July 30, as more investors accept that the Federal Reserve will continue to implement modest rate cuts. This still supports rising U.S. Treasury yields, which in turn bolsters the prospects for further appreciation of the U.S. dollar, indicating that the path of least resistance for the USDCAD is upward.

Technical Analysis

Since the rebound from the support level of 1.3421, the USDCAD has showed a pronounced bullish momentum, with buyers pushing the price close to a three-month high around 1.3946. The USDCAD has appreciated by 4.6% during this rebound, and the medium-term outlook has shifted to positive.

From a momentum perspective, the Relative Strength Index (RSI) is moving above the 70 level, while the MACD is losing some momentum above its zero line. Both indicators suggest that the market is overextended and may continue to expand, although a pullback could also occur.

A more significant upward movement could propel the market past the 1.3946 threshold, potentially breaking through the 22-month high of 1.3976. A decisive break above this resistance range would confirm the resumption of a larger upward trend.

On the downside, a drop below the minor support level of 1.3875 would shift the intraday bias and initially lead to consolidation.

Overall, the USDCAD continues to maintain a positive upward trend, with only a drop below the 200-day SMA (located around 1.3680) likely to alter the bias to neutral.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.3900

Target Price: 1.4059

Stop Loss: 1.3800

Deadline: November 14, 2024 23:55:00

Support: 1.3876, 1.3838, 1.3811

Resistance: 1.3946, 1.3976, 1.4000

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

The US dollar is under pressure amid market expectations that the US Federal Reserve (Fed) may ease monetary policy, while technical indicators point to the possibility of USD/CHF continuing to correct to lower support levels...

SELL USDCHF

EXP

EXPIRED

0.86750

Entry Price

0.86000

0.87000

0.87761 -0.00091 -0.10%

Pips

EXPIRED

0.86000

0.86630

Exit Price

0.86750

Entry Price

0.87000

USD/CHF has been under pressure due to market expectations that the Fed will cut interest rates in the near future, especially as recent data points to a weakening US economy. Inflation data from Switzerland fell to 0.8% in September, leading to expectations that the Swiss National Bank (SNB) could resume its monetary easing policy later this year. However, the USD has not received much support from these signals due to the decline in inflation and the uncertain economic outlook, putting pressure on USD/CHF.

Market psychology

Investors are currently bearish on USD/CHF due to concerns about the Fed’s ability to adjust interest rates. Meanwhile, the relative strength of the Swiss franc is due to its stability and safe-haven appeal amid global economic uncertainty. The decline in Swiss inflation expectations also suggests that the SNB will maintain a flexible interest rate policy, making the franc more attractive against the USD.

Technical analysis

Áp lực giảm USD/CHF gia tăng: Đà giảm có thể kéo dài?_1

On the H15 chart, USD/CHF is facing strong resistance at 0.8685, and the Stochastic indicator is showing overbought signals, suggesting a possible short-term downside correction. According to the forecast, if USD/CHF fails to hold support at 0.8640, the downside is likely to extend to the target levels of 0.8600 and 0.8570, which mark important support levels for the next trend.

Trading Recommendations

Based on the overall analysis and current market situation, USD/CHF short order is a reasonable strategy. However, investors should continue to closely monitor economic information from the US and Switzerland to be able to adjust the strategy in time when there are new fluctuations.

Entry: 0.8675

Take Profit : 0.8600

Stop Loss : 0.8700

Risk Warnings and Disclaimers

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