Yesterday’s market wrap
Volatility returned to financial markets yesterday as the USD fell during the European session, but then reversed and ended the day and month flat. The U.S. employment index rose 1.1%, slightly more than the 1.0% forecast. However, quarterly employment growth is typically higher than 1% from 2021.
USD/JPY led the way with a 300-pip move from the bottom as it climbed back above 150, with the Bank of Japan falling short of market expectations for further tightening amid better GDP and higher inflation recently. As a result, JPY ended the day the weakest of the major currencies, with USDJPY being the biggest mover, gaining 2 around 2% on the day.
Yields on 10-year US Treasuries rose for the 6th month in a row, ending October very close to 5%. During that time, the yield increased 150 basis points from 3.428% to 4.92%. The 30-year bond rose for the sixth time in the past seven months. The yield increased from 3.654% to 5.08% (a difference of 143 basis points). The dollar index (DXY) gained 0.517% for the third month in a row after the employment cost index and CB consumer confidence beat expectations.
Today’s Market Wrap
Today started with the Q3 employment report from New Zealand. The 3Q unemployment rate jumped to 3.9% as expected from 3.6% in 2Q, turning the NZD bearish and sending NZD/USD back below 0.68. The quarter-on-quarter change in employment also missed expectations, coming in at -0.2%.
The US ADP to be released in the US session has a poor track record of forecasting the US NFP, but it is still a market-moving report, especially as this labor market data draws attention. The consensus forecasts 150,000 new jobs in October, up from 89,000 in the previous month. The ISM Manufacturing PMI in the United States is expected to remain constant at 49.0 points from 49.0 previously. The latest S&P Global Manufacturing PMI beat forecasts, hitting 50.0 as the industry recovers from recession in 2022. Additionally, price pressures continue to ease, a positive trend for the Fed.
The number of JOLTS jobs in the United States is expected to decrease to 9.270 million from 9.610 million previously. Recently, this is a significant report on the movement of the market. In the evening, the FED meeting will be held, where it is assumed that the interest rate will be kept at 5.25-5.50%. The market expects the Fed to start cutting rates in mid-2024 rather than raising them. The focus will be on the direction of the December meeting, but no pre-commitment is expected as the FOMC continues to take a “wait and see” stance.
Yesterday, volatility returned and we saw decent moves across all markets, with the USD completing a 250 retracement. There was a strong reversal at the start of the US trading session as the USD initially started to decline but then reversed to close the day higher. We opened several forex signals but only three ended in profit.
GOLD $30 cashback after $2,000
Gold retreated around $30 lower yesterday after rising above the psychologically critical $2,000 level at the start of the US session as US bond yields started to rise again. The ongoing confrontation in Gaza has fueled safe-haven demand and supported the precious metal. However, traders are treading cautiously and refraining from strong bullish positions as they await important central bank meetings this week. Yesterday we saw a drop below $1980 but it stopped again at the MA where we decided to open another buy signal for gold.
XAU/USD – 60 minute chart
- Gold buy signal
- Entry price: $1,977
- Stop Loss: $1983
- Take Profit: $2,005
Buying GBP/USD in MA
GBP/USD has been in decline for several months, hitting its lowest level since March when it fell to 1.2040 in early October, although it recovered for more than a week before peaking at 1.2340 the following week. Conversely, the release of US consumer inflation data supported the USD and pushed the pair lower, falling just below 1.21 this week. Although yesterday we decided to buy at the 100 SMA (green) and the price rebounded after that.AUD/USD – 240 minute chart
The Bitcoin market saw two price spikes last week, the largest of which occurred this week. The first was when Coin Telegraph reported that the SEC had approved a spot ETF, causing Bitcoin to soar to $30,000. However, the price dipped below $28,000 for several days before rising again later in the week. Bitcoin closed the week at $34,500, continued to rise, and yesterday bitcoin hit our profit target as the price approached $35,000.
- BTC buy signal
- Admission price: $33,621.7
- Stop Loss: $32,621.69
- Take Profit: $34,821.71
ETHEREUM It finally breaks the 200 daily SMA
ETH/USD also rose yesterday, although the increase was smaller. At the end of last month, the price of Ethereum started to rise above the support level, indicating that there is some buying interest and demand for Ethereum around $1,600. Buyers regularly entered the zone above this level, but the daily chart’s 100 SMA (green) acted as resistance. After a recent rally, the price jumped above the 200-day SMA (purple), but rice has since bounced back and is now ending the day at this moving average.
ETH/USD – Daily Chart
- ETH buy signal
- Admission price: $1,671.79
- Stop Loss: $1,371
- Take Profit: $1,971