Technical Outlook and Review

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Summary:

The DXY chart currently demonstrates a bullish momentum, with the possibility of a short-term drop to the 1st support level before potentially bouncing and rising towards the 1st resistance level.

DXY

The DXY chart currently demonstrates a bullish momentum, with the possibility of a short-term drop to the 1st support level before potentially bouncing and rising towards the 1st resistance level.

The 1st support at 106.19 is identified as an overlap support, which may provide a level of price stability. The 2nd support at 105.68 is also considered an overlap support, potentially offering additional support to price declines.

On the resistance side, the 1st resistance at 107.13 is crucial, with the presence of the 127.20% Fibonacci Extension, indicating its significance as a potential barrier to price increases. Beyond this, the 2nd resistance level at 107.91 is recognized as a swing high resistance

EUR/USD

The EUR/USD chart currently exhibits bearish momentum, with the potential scenario of a short-term rise towards the 1st resistance level before reversing and moving towards the 1st support.

The 1st support at 1.0459 is considered significant due to the presence of the 61.80% Fibonacci Projection and the 127.20% Fibonacci Extension, suggesting Fibonacci confluence and making it a noteworthy level for potential price reversals. Additionally, the 2nd support at 1.0395 is identified as a swing low support, further reinforcing its importance as a potential support level.

On the resistance side, the 1st resistance at 1.0500 is characterized as an overlap resistance, indicating its potential role as a barrier to price increases. Furthermore, the 2nd resistance at 1.0395 is recognized as a swing high resistance, emphasizing its significance in potential price reversals.

EUR/JPY

The instrument being analyzed is EUR/JPY, and the current overall momentum of its chart is bullish.

There is a potential scenario where the price could make a bullish bounce off the 1st support level, which is at 156.75, and head towards the 1st resistance level at 158.50.

The 1st support at 156.75 is considered significant because it acts as a multi-swing low support.

Additionally, there is a 2nd support level at 155.82, which is also valuable due to its status as a multi-swing low support. It aligns with a 161.80% Fibonacci Extension level, adding to its importance.

On the resistance side, the 1st resistance level at 158.50 is considered important because it represents a multi-swing high resistance.

Moreover, there is a 2nd resistance level at 159.42, which holds importance as a pullback resistance in the chart analysis.

EUR/GBP

The instrument being analyzed is EUR/GBP, and the current overall momentum of its chart is bearish.

There is a potential scenario where the price could make a bearish reaction off the 1st resistance level, which is at 0.8671, and subsequently drop to the 1st support level at 0.8635.

The 1st support at 0.8635 is considered significant because it acts as an overlap support and corresponds to a 61.80% Fibonacci Projection.

Additionally, there is a 2nd support level at 0.8614, which is also valuable due to its status as an overlap support.

On the resistance side, the 1st resistance level at 0.8671 is considered important because it represents an overlap resistance. Furthermore, this level aligns with a 61.80% Fibonacci Retracement, adding to its significance.

Moreover, there is a 2nd resistance level at 0.8701, which holds importance as a multi-swing high resistance in the chart analysis.

GBP/USD

The GBP/USD chart currently maintains a bearish momentum, with factors contributing to this momentum being its position below the bearish Ichimoku cloud.

There is a potential scenario of a bullish bounce off the 1st support level at 1.2067, which is supported by the presence of the 127.20% Fibonacci Extension, indicating a possible reversal point. Additionally, the 2nd support at 1.2011 is identified as a swing low support and aligns with the 161.80% Fibonacci Extension, further emphasizing its significance.

On the resistance side, the 1st resistance level at 1.2124 is recognized as an overlap resistance, suggesting it may act as a barrier to bullish movements. Beyond this, the 2nd resistance at 1.2265 is also categorized as an overlap resistance.

GBP/JPY

The instrument being analyzed is GBP/JPY, and the current overall momentum of its chart is bullish.

There is a potential scenario where the price could drop further to the 1st support level, which is at 180.59, in the short term before bouncing from there and rising to the 1st resistance level at 181.87.

The 1st support at 180.59 is considered significant because it acts as a multi-swing low support and corresponds to a -27% Fibonacci Expansion.

Additionally, there is a 2nd support level at 179.73, which is also valuable as it functions as a pullback support and aligns with a 161.80% Fibonacci Extension.

On the resistance side, the 1st resistance level at 181.87 is considered important because it represents a pullback resistance.

Moreover, there is a 2nd resistance level at 182.90, which holds significance as a swing high resistance in the chart analysis.

USD/CHF

The USD/CHF chart currently exhibits a bullish momentum.

There's a potential scenario of a bullish continuation towards the 1st resistance level at 0.9211. The 1st support at 0.9095 is identified as a swing low support, indicating a potential level where the price might find support. Additionally, the 2nd support at 0.9016 is categorized as a pullback support, further strengthening its significance.

On the resistance side, the 1st resistance level at 0.9211 is recognized as a swing high resistance and marks a potential point where the price could face resistance initially. Beyond this, the 2nd resistance at 0.9263 is notable for the convergence of the 161.80% Fibonacci Extension and the 61.80% Fibonacci Retracement, indicating a Fibonacci confluence and underscoring its importance as a potential resistance zone.

USD/JPY

The USD/JPY chart currently has a bullish momentum, but there's a potential scenario of a short-term drop to the 1st support level at 148.44 before bouncing and rising towards the 1st resistance.

The 1st support at 148.44 is identified as an overlap support, making it a significant level for potential price support. Additionally, the 2nd support at 147.80 is categorized as a pullback support, further reinforcing its importance as a potential level where the price might find support.

On the resistance side, the 1st resistance level at 149.90 is crucial, with the presence of the 127.20% Fibonacci Extension, indicating its significance as a potential resistance zone. Beyond this, the 2nd resistance at 150.42 is marked by the 161.80% Fibonacci Extension, further underlining its importance as a potential barrier to upward movements in the price.

USD/CAD

The USD/CAD chart currently has a bearish momentum, and there is a potential scenario of a bearish reaction off the 1st resistance level, leading to a drop towards the 1st support.

The 1st support at 1.3633 is considered a good support level, characterized as a pullback support. Additionally, the 2nd support at 1.3575 is identified as an overlap support, which offers another potential zone where the price might find necessary support.

On the resistance side, the 1st resistance level at 1.3693 is crucial, being a swing high resistance. Beyond this, the 2nd resistance level at 1.3745 also serves as a swing high resistance, representing a barrier for potential upward movements in the price.

AUD/USD

The AUD/USD chart currently has a bearish momentum, but there is a potential scenario of a bullish bounce off the 1st support level, heading towards the 1st resistance.

The 1st support at 0.6334 is considered significant as it is a swing low support level. Additionally, the 2nd support at 0.6291 is identified as a level where the price aligns with the 127.20% Fibonacci Retracement, which enhances its role as a key support level.

On the resistance side, the 1st resistance level at 0.6387 is categorized as a pullback resistance, which might initially limit upward movements. Beyond this, the 2nd resistance at 0.6456 also serves as a pullback resistance

NZD/USD

The NZD/USD chart is currently exhibiting a bearish momentum, and there's a potential scenario of a bearish continuation towards the 1st support level.

The 1st support at 0.5902 is considered significant as it is a multi-swing low support level. Additionally, the 2nd support at 0.5860 is identified as a multi-swing low support and is further reinforced by the presence of the 127.20% Fibonacci Extension, making it an important level for potential price support.

On the resistance side, the 1st resistance level at 0.5983 is marked as a pullback resistance, which might initially limit upward movements. Beyond this, the 2nd resistance at 0.6035 is identified as a swing high resistance, representing another potential barrier to bullish advancements in the price.

DJ30

The instrument being analyzed is DJ30, and the current overall momentum of its chart is bullish.

There is a potential scenario where the price could make a bullish bounce off the 1st support level, which is at 33280.79, and head towards the 1st resistance level at 33713.99.

The 1st support at 33280.79 is considered significant because it acts as an overlap support.

Additionally, there is a 2nd support level at 32722.19, which is also valuable as it functions as a swing low support.

On the resistance side, the 1st resistance level at 33713.99 is considered important because it represents a swing high resistance. Furthermore, this level aligns with both a 61.80% Fibonacci Retracement and a 78.60% Fibonacci Projection, indicating Fibonacci confluence and adding to its significance.

Moreover, there is a 2nd resistance level at 34055.99, which is deemed important as it represents an overlap resistance and corresponds to a 50% Fibonacci Retracement, contributing to its significance in the analysis.

GER40

The instrument being analyzed is GER40, and the current overall momentum of its chart is bullish.

There is a potential scenario where the price could make a bullish bounce off the 1st support level, which is at 15137.90, and head towards the 1st resistance level at 15295.20.

The 1st support at 15137.90 is considered significant because it acts as a multi-swing low support.

In addition, there is a 2nd support level at 15029.70, which is also notable due to its status as a 127.20% Fibonacci Extension.

On the resistance side, the 1st resistance level at 15295.20 is considered important because it represents a pullback resistance. Furthermore, this level corresponds to a 38.20% Fibonacci Retracement, adding to its significance.

Moreover, there is a 2nd resistance level at 15505.60, which holds importance as a swing high resistance. This level aligns with a 78.60% Fibonacci Projection, contributing to its significance in the analysis.

US500

The instrument being analyzed is US500, and the current overall momentum of its chart is bearish. Several factors contribute to this bearish momentum.

There is a potential scenario where the price could make a bearish reaction off the 1st resistance level, which is at 4292.4, and subsequently drop to the 1st support level at 4259.7.

The 1st support at 4259.7 is considered significant because it acts as a swing low support and corresponds to a 78.60% Fibonacci Retracement level.

Additionally, there is a 2nd support level at 4234.1, which is also notable because it functions as an overlap support.

On the resistance side, the 1st resistance level at 4292.4 is considered important because it represents an overlap resistance. Furthermore, this level aligns with a 38.20% Fibonacci Retracement, adding to its significance.

Moreover, there is a 2nd resistance level at 4333.6, which holds importance as a swing high resistance. This level coincides with both a 78.60% Fibonacci Projection and a 38.20% Fibonacci Retracement, indicating Fibonacci confluence and further enhancing its significance in the analysis.

BTC/USD

The instrument being analyzed is BTC/USD, and the current overall momentum of its chart is bullish. Several factors contribute to this bullish momentum.

There is a potential scenario where the price could make a bullish bounce off the 1st support level, which is at 27412, and head towards the 1st resistance level at 28586.

The 1st support at 27412 is considered significant because it acts as an overlap support and coincides with a 61.80% Fibonacci Retracement level, adding to its importance in the analysis.

Additionally, there is a 2nd support level at 26774, which is also valuable as it functions as an overlap support.

On the resistance side, the 1st resistance level at 28586 is considered important because it represents an overlap resistance. Furthermore, this level aligns with a 61.80% Fibonacci Projection, contributing to its significance in the analysis.

ETH/USD

The instrument being analyzed is ETH/USD, and the current overall momentum of its chart is bullish.

There is a potential scenario where the price could make a bullish bounce off the 1st support level, which is at 1649.76, and head towards the 1st resistance level at 1689.42.

The 1st support at 1649.76 is considered significant because it acts as an overlap support and corresponds to a 50% Fibonacci Retracement level.

Additionally, there is a 2nd support level at 1633.77, which is also valuable as it functions as a pullback support and aligns with a 61.80% Fibonacci Retracement level.

On the resistance side, the 1st resistance level at 1689.42 is considered important because it represents a pullback resistance. Furthermore, this level coincides with both a 50% Fibonacci Retracement and a 61.80% Fibonacci Projection, indicating Fibonacci confluence and adding to its significance.

Moreover, there is a 2nd resistance level at 1735.23, which holds importance as a multi-swing high resistance in the chart analysis.

WTI/USD

The WTI chart currently has a bearish momentum, and there's a potential scenario of a bearish continuation towards the 1st support level.

The 1st support at 85.57 is considered significant as it's identified as an overlap support, making it an important level where the price might find some support. Additionally, the 2nd support at 84.03 is categorized as a pullback support, further underpinning its role as a key level for potential price support.

On the resistance side, the 1st resistance level at 87.53 is marked as a pullback resistance, potentially limiting upward movements. Beyond this, the 2nd resistance at 90.75 is identified as an overlap resistance, representing another potential barrier to bullish advancements in the price.

XAU/USD (GOLD)

The XAUUSD chart currently exhibits a bearish momentum, with a potential scenario of a bearish continuation towards the 1st support level.

The 1st support at 1806.00 is considered significant as it's identified as an overlap support, making it a crucial level for potential price support. Furthermore, the 2nd support at 1777.59 is also categorized as an overlap support, reinforcing its importance as a potential zone where the price may find support.

On the resistance side, the 1st resistance level at 1856.47 is marked as a pullback resistance, potentially limiting upward movements. Beyond this, the 2nd resistance at 1887.35 is identified as a swing high resistance.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Samantha Luan

Central Bank

Economic

Forex

Australian Dollar is facing heavy downward pressure, emerging as the most underperforming currency this week so far. The weak under tone is maintained following RBA's decision to hold interest rates steady. Both Aussie and Kiwi have relinquished the gains made the previous week, a reversal exacerbated by an evident risk aversion in Asia.

Significant decline is seen in Hong Kong stocks post-long weekend. Despite a dramatic over 40% surge in China Evergrande as trading of its shares resumed from last week's halt, the overall market sentiment remained uninspired. The embattled property developer's spike did little to alleviate the prevailing bearish outlook.

Contrarily, Dollar has emerged robust, spearheading the near-term rally against Euro and Sterling. The buoyancy can be attributed to a "relatively" upbeat ISM manufacturing data that has incrementally heightened the prospects of another Fed hike, now hovering around 45% likelihood in December. This positive data concurrently propelled 10-year yield and the greenback upwards. However, impending ISM services and non-farm payroll data are anticipated to be crucial determinants in Dollar's continued ascendancy.

Elsewhere in the currency markets, Yen is tailing Dollar as the second strongest, keeping market participants and analysts vigilant due to potential interventions by Japan close to the 150 handle against Dollar. Among European majors, Sterling is the laggard.

On the technical front, GBP/USD is now pressing an important fibonacci level at 38.2% retracement of 1.0351 to 1.3141 at 1.2075 Sustained break there will align the outlook will EUR/USD. That is, fall from 1.3141 in GBP/USD, whether it's a correction or reversing whole trend form 1.0351, would target 61.8% retracement at 1.1417. Aussie Faces Headwinds Post-RBA Hold Amid Asian Market Jitters and Dollar Power_1

Aussie Faces Headwinds Post-RBA Hold Amid Asian Market Jitters and Dollar Power_1

In Asia, at the time of writing, Nikkei is down -1.43%. Hong Kong HSI is down -3.03%. Singapore Strait Times is down -0.81%. Japan 10-year JGB yield is down -0.0123 at 0.764. China is on holiday. Overnight, DOW dropped -0.22%. S&P 500 rose 0.01%. NASDAQ rose 0.67%. 10-year yield rose 0.110 to 4.683, after hitting as high as 4.703.

RBA holds rates steady, maintains hawkish bias

In what was Michelle Bullock's inaugural meeting as Governor, RBA opted to maintain its cash rate target at 4.10%, aligning with broad market expectations. The central bank's statement carried a hawkish tone, noting that "some further tightening of monetary policy may be required. The exact course of such adjustments, however, would be determined by "the data and the evolving assessment of risks."

While RBA acknowledged that inflation had passed its pinnacle, the levels remain uncomfortably elevated. It observed a decline in goods price inflation but pointed out the brisk rise in service prices, as well as notable increases in fuel and rent prices.

The central bank projects a gradual return of CPI inflation to its 2-3% target range by the end of 2025. This aligns with their prediction of sustained below-trend growth for the economy, expecting this trend to persist. Consequently, they anticipate the unemployment rate to inch up, reaching approximately 4.5% towards the end of the following year.

Outlook is shrouded in "significant uncertainties." These encompass variables like service price inflation, delays in monetary policy transmission monetary policy, and businesses' reactions in terms of pricing and wages. Consumer behavior, particularly household consumption patterns, also remains an unpredictable factor.

On a global scale, RBA expressed concerns over China's economy, especially given the prevalent disturbances in its property market.

NZ NZIER survey shows mild recovery in business sentiment

NZIER Quarterly Survey of Business Opinion reveals a modest improvement in business confidence for the September quarter, climbing to -52.7 from its previous position at -60.3. However, it's evident that overall sentiment within the business community remains pessimistic. Trading activity for the next three months improved from -16.6 to -14.2.

One major positive shift observed was the pronounced decrease in reported labour shortages. Fewer businesses now list the challenge of finding labour as their principal operational bottleneck, shifting their concerns instead to a softer demand environment. This transition in concerns implies that the recent hikes in interest rates may be suppressing economic demand in the country.

On the flip side, the easing of capacity pressures hasn't provided much respite to businesses in terms of costs. A significant 68.2% of respondents noted a rise in their operating costs over the past three months, only a minor reduction from the prior quarter's 67.1%. Moreover, the inclination to transfer these cost pressures to consumers has subsided, with 57.3% of businesses raising output prices in the recent quarter, down from a previous 68.8%.

Fed's Barr eyes restrictive policy duration over rate height

Fed Vice Chair Michael Barr advocated for a cautious approach to monetary policy adjustments during his speech yesterday. While discussions surrounding interest rate hikes are paramount, Barr's concern is primarily anchored on the duration for which these elevated rates should be maintained.

Speaking on the current tightening cycle, Barr highlighted the progress made and expressed that it's a juncture where meticulous decision-making is essential. He stated, "Given how far we have come, we are now at a point where we can proceed carefully as we determine the extent of monetary policy restriction that is needed."

Perhaps most notably, he reframed the ongoing debate on rate adjustments by remarking, "The most important question at this point is not whether an additional rate increase is needed this year or not, but rather how long we will need to hold rates at a sufficiently restrictive level." This perspective places a clear emphasis on policy duration, suggesting a prolonged period of elevated rates may be more impactful than further substantial hikes in the near term.

On the economy, Barr's baseline is for real GDP growth to "moderate to somewhat below its potential rate over the next year" as restrictive monetary policy and tighter financial conditions restrain economic activity." He anticipates this deceleration in growth to be concomitant with "some further softening in the labor market".

Fed's Bowman flags energy as potential setback to disinflation progress; advocates more hike

Fed Michelle Bowman has made her hawkish stance clear on the pressing issue of inflation that continues to grip the U.S. economy. In a speech yesterday, Bowman emphasized the persistence of inflationary pressures, signaling the need for a more restrictive monetary policy to anchor inflation back to the Fed's 2% target.

"Inflation continues to be too high, and I expect it will likely be appropriate for the Committee to raise rates further and hold them at a restrictive level for some time to return inflation to our 2 percent goal in a timely way," Bowman stated.

Bowman pointed to the latest inflation reading based on the PCE index, noting a rise in overall inflation driven, in part, by escalating oil prices. "I see a continued risk that high energy prices could reverse some of the progress we have seen on inflation in recent months," she warned.

Also, Bowman cited the Summary of Economic Projections released during the September FOMC meeting, where "the median participant expects inflation to stay above 2 percent at least until the end of 2025." This expectation of prolonged inflationary pressures aligns with Bowman's perspective that "further policy tightening" will be instrumental in steering inflation back towards target.

Fed's Mester suggests another rate hike needed

Cleveland Fed President Loretta Mester acknowledged in a speech yesterday the robust state of the economy with a cautious stance on inflation and interest rates. She signaled the possibility of another rate hike this year.

"I suspect we may well need to raise the fed funds rate once more this year and then hold it there for some time," she said.

However, Mester also underscored the contingent nature of future monetary policy decisions, stating, "whether the fed funds rate needs to go higher than its current level and for how long policy needs to remain restrictive will depend on how the economy evolves relative to the outlook."

Inflation, according to Mester, continues to pose a significant challenge. She plainly remarked that inflation remains "too high". Though she expects some easing of price pressures, she cautioned that "the risks to the inflation forecast remain tilted to the upside."

On a positive note, Mester expressed optimism about the broader economic picture. "The economy is on a good path," she observed. Delving into labor market dynamics, she pointed out that while conditions remain robust, the disparity between labor demand and supply is shrinking, indicating that "firms are finding it easier to find the workers they need."

Looking ahead

The economic calendar is ultra-light today with only Swiss CPI featured.

AUD/USD Daily Report

AUD/USD's breach of 0.6330 support indicates resumption of recent down trend. Intraday bias is back on the downside. Current fall from 0.7156 should target 100% projection of 0.7156 to 0.6457 from 0.6894 at 0.6195. On the upside, break of 0.6500 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay bearish in case of recovery. Aussie Faces Headwinds Post-RBA Hold Amid Asian Market Jitters and Dollar Power_2

Aussie Faces Headwinds Post-RBA Hold Amid Asian Market Jitters and Dollar Power_2

In the bigger picture, down trend from 0.8006 (2021 high) is possibly still in progress. Decisive break of 0.6169 will target 61.8% projection of 0.8006 to 0.6169 to 0.7156 at 0.6021. This will now remain the favored case as long as 0.6894, in case of strong rebound. Aussie Faces Headwinds Post-RBA Hold Amid Asian Market Jitters and Dollar Power_3

Aussie Faces Headwinds Post-RBA Hold Amid Asian Market Jitters and Dollar Power_3

Source: ActionForex

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Forex

Commodity

Economic

U.S. Nonfarm payrolls --> USD/JPY

U.S. lawmakers passed a last-minute deal during the weekend to avert a government shutdown until mid-November.

With fiscal risks moving temporarily out of the spotlight, the focus will turn back to interest rates as the U.S. dollar is stubbornly trying to revive its uptrend against the battered Japanese yen. The price went up to 149.81 on Monday, which is almost a one-year high. However, traders are waiting for the Fed chief and his colleagues to give their thoughts about the economy later in the day, so the momentum is weak.

Technically, it’s worth watching whether the pair can find enough buyers to breach the tentative resistance trendline from March at 150.75 and rally beyond the 2022 top of 151.93. If that proves to be the case, USD/JPY could speed up towards the upper band of a short-term bullish channel at 154.50. Whether that happens will depend on the outlook for the U.S. economy and interest rates, starting with the ISM business surveys and the nonfarm payrolls report this week.

Analysts expect jobs growth to ease back to 163k, though a lower unemployment rate of 3.7% and a rebound in average earnings could still maintain confidence in the U.S. economy and therefore in the greenback.

RBNZ policy meeting --> NZD/USD

The antipodean currencies could make headlines this week as central banks in Australia and New Zealand are scheduled to announce their rate decisions on Tuesday and Wednesday, respectively. Although no changes are expected, investors would like to know whether additional tightening is possible in the year ahead, especially in New Zealand, where projections point to two more rate increases.

NZD/USD is still struggling to surpass September’s bar of 0.6000, but the improvement in the technical signals sustains optimism for a bullish breakout. The bulls will also need a victory within the 0.6100 region to enhance buying appetite.

Treasury yields --> Gold

U.S. Treasury yields continued to trend higher for another month in September, making gold less attractive to investors who sought higher dividends and interest rates in alternative markets. The precious metal started October’s session on the wrong foot on Monday, sliding to 1,839. Although the downfall looks overdone, there is no important support region until 1,800 or lower at 1,773.

To stay updated on all economic events of today, please check out our Economic calendar

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Damon

Stocks

Economic

Manufacturing PMIs released throughout the day have made for pretty miserable reading and even those in China barely registered any growth after a lengthy period of contraction.

The Chinese data did offer some cause for hope at least, despite ultimately barely sitting in growth territory. The trajectory is positive and boosted by targeted stimulus measures that are seemingly working. External demand remains a problem but a bump in domestic demand is promising.

The sector in Europe is looking particularly grim with demand remaining extremely weak, backlogs falling and layoffs expected to accelerate over the months ahead. That's unless we can see a rebound in activity which is looking very unlikely at this stage with the global economy struggling for any positive momentum against the backdrop of high interest rates.

The PMIs from the US were a little better, particularly the ISM reading which significantly beat expectations but even here, it remains below 50 and therefore in contraction territory. With interest rates set to remain "higher for longer", things aren't likely to dramatically improve for the sector.

A very bearish signal for the DAX

The DE30 turned lower again today after staging a mild recovery in recent sessions and the move could reinforce bearish views on the index.

Source – OANDA on Trading View

The reason is that the move lower came after a retest of the 200/233-day simple moving average band, following the breakout last week. The rotation lower now could be viewed as confirmation of the breakout and therefore a bearish signal.

The next potential area of support could be seen around 15,000 where prior support and resistance falls around the bottom of the descending channel.

Source: MarketPulse

To stay updated on all economic events of today, please check out our Economic calendar

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SAXO

Economic

Global equities saw their worst month so far this year in September, recording a decline of 4.4%. A triple-whammy of risks underpinned, including rising bond yields, surging oil prices and increasing concerns about the global economic growth outlook. China momentum failed to show a material pickup, while more clouds have gathered over the Eurozone outlook. Meanwhile, geopolitical tensions continued, and the AI-fueled tech rally deflated further, taking out further steam from the equity markets. September Market Performance: The Start of a Storm?_1

September Market Performance: The Start of a Storm?_1

U.S. -4.9%

While the Fed paused its tightening cycle in September, the message remained that of higher-for-longer, which has been painful for the U.S. equity markets to digest. As a result, the U.S. equity benchmark index, the S&P 500, was down 4.9% in September and underperformed other global equity benchmarks. The OPEC-driven surge in oil prices also underpinned concerns of another spike in inflation as well as a pullback in consumer spending, as purchasing power gets impeded. Meanwhile, markets were looking ahead to risks coming from an impending U.S. government shutdown, which has been averted for now, along with autoworker strikes, as well as the restart of student loan repayments.

Europe -1.6%

The European index, MSCI Europe, outperformed the U.S. benchmark index in September, but it was also in the red, as it closed down 1.6%. Inflation has started to ease, and the ECB hiked rates again in September but hinted at peak rates, while the Bank of England and Swiss National Bank kept interest rates unchanged in a surprise decision. While most central banks could stay tight with risks of an oil-driven inflation resurgence, Europe's economic concerns continue to get louder with the slump in Germany and risks seen to Italy's fiscal situation as well. Meanwhile, demand from Chinese consumers remains tepid.

Asia -2.9%, Emerging Markets -2.8%

The performance of Asia and emerging markets improved in September, after hefty declines in August. Still, MSCI Asia was down 2.9% and MSCI Emerging Markets slumped by 2.8% in the month. The weakening global growth outlook continued to put pressure on Asia's export-driven economies, such as South Korea and Taiwan, even as the domestic-demand-driven economies such as India closed the month in green. China's high frequency data started to show some signs of an improvement, but the property sector remained an overhang. Meanwhile, the rise in oil prices and a sustained surge in the U.S. dollar added to the headwinds for EMs. September Market Performance: The Start of a Storm?_2

September Market Performance: The Start of a Storm?_2

The energy sector recorded a fourth consecutive month of gains in September and was the only sector in green, with gains of 2.5% last month. Crude oil prices have extended their advance amid supply tightness concerns, and $100 oil in the short-term remains a key focus. This has brought the focus back to energy equities which continue to generate high shareholder returns. Financials was the second-best performing sector, posting a decline of 2.3%, while Communication Services and Healthcare were down over 3%.

September Market Performance: The Start of a Storm?_3

Despite the recent sell-off in bonds on the back of higher-for-longer messages from most global central banks, bonds outperformed equities yet again in September. Central banks are still generally maintaining a hawkish bias, and we saw bear steepening of the yield curve in most developed markets. Corporate bonds underperformed global Treasuries once again in September.

To stay updated on all economic events of today, please check out our Economic calendar

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Owen Li

Energy

It's been a volatile start to the week for oil, with prices initially rising before falling negative to trade almost 2% lower on the day.

We've had a vast selection of PMIs to bear in mind today, as well as speculation around the OPEC+ decision on Wednesday and, of course, the US averted a government shutdown.

I'm not sure all of this is a net negative for oil, per se, but it was trading at very high levels prior to this and had already started to lose momentum so perhaps what we're seeing is a case of profit-taking. Especially given the proximity to the OPEC+ meeting on Wednesday.

BCOUSD Daily

The recent decline in BCOUSD came following a rally and new high that failed to be backed up by stronger momentum and now it appears to have potentially moved into a corrective phase.

A divergence often isn't followed by such a sudden corrective move and this may also quickly reverse higher again but the moves over the last few days are not small.

The price is now testing last week's lows and a break below may point to further declines, with support in the $88-$90 region potentially key.

Ultimately, though, the OPEC+ decision on Wednesday may dictate the direction of travel.

Source: MarketPulse

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Titan FX

Forex

GBP/USD Technical Analysis

The British Pound remained in a bearish zone below 1.2200 against the US Dollar. GBP/USD dived below the 1.2150 zone to enter further into a bearish zone. GBP/USD Nosedives, Bears Seem to Aim 1.2000 _1

GBP/USD Nosedives, Bears Seem to Aim 1.2000 _1

Looking at the 4-hour chart, the pair settled below the 1.2140 level, the 100 simple moving average (red, 4 hours), and the 200 simple moving average (green, 4 hours).

The decline gained pace below the 1.2120 level. A low is formed near 1.2067 and the pair is still showing signs of more downsides. Immediate support is near the 1.2050 level. The next key support is seen near the 1.2020 level, below which it could test 1.2000.

Any more losses might send the pair toward the 1.1880 level. If there is a recovery wave, the pair could face resistance near the 1.2120 level.

The first major resistance is near 1.2150. There is also a major bearish trend line forming with resistance near 1.2170 on the same chart. The trend line is near the 50% Fib retracement level of the downward move from the 1.2271 swing high to the 1.2067 low.

A close above 1.2170 could start a steady increase. In the stated case, GBP/USD might rise and recover toward the 1.2250 resistance zone.

Looking at EUR/USD, the pair extended its decline toward the 1.0450 level and is currently at risk of more downsides.

Economic Releases

Swiss CPI for Sep 2023 (YoY) – Forecast +1.8%, versus +1.6% previous.

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