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Forex Signals Brief November 1: All Eyes on the FED Meeting Today?

Yesterday’s Market Wrap

Yesterday in financial markets, the volatility returned as the USD sank during the European session, but then reversed and ended up for the day and the month. The US employment index grew by 1.1%, slightly more than the 1.0% forecast. However, the quarterly growth in employment has been typically greater than 1% since 2021.

USD/JPY was leading the way, with a 300 pip move from the bottom to the top as it climbed above 150 again, with the Bank of Japan falling short of market expectations for more tightening amid better GDP and higher inflation recently. As a consequence, the JPY ended the day as the weakest of the major currencies, with the USDJPY being the greatest mover, gaining 2around 2% on the day.

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The 10-year US Treasury yields rose for the 6th month in a row, ending October very close to 5%. During this time, the yield increased by 150 basis points, from 3.428% to 4.92%. The 30-year bond has risen for the sixth time in the previous seven months. The yield has risen 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 the CB consumer confidence beat expectations.

Today’s Market Wrap

Today started with the employment report for Q3 from New Zealand. The Q3 unemployment rate jumped to 3.9% as expected, from 3.6% in Q2, which turned the NZD bearish, sending NZD/USD below 0.68 again. The Employment change QoQ also missed expectations, coming at -0.2%.

The US ADP which will be released in the US session, has a bad track record of forecasting the US NFP, but it is still a market moving report, especially since that labor market data is attracting attention. The consensus predicts 150K new jobs in October, up from 89K the previous month. The ISM Manufacturing PMI in the United States is projected to remain constant at 49.0 points vs. 49.0 previously. The most recent S&P Global Manufacturing PMI exceeded forecasts, printing at 50.0 as the industry recovered from the 2022 recession. Furthermore, price pressures are continuing to lessen, which is a positive trend for the Fed.

The number of JOLTS job openings in the United States is expected to reduce to 9.270 million from 9.610 million before. This has been a significant market-moving report recently. The FED meeting will come ini the evening, which is projected to maintain the interest rate at 5.25-5.50%. The market expects the FED will start lowering rates in mid-2024 rather than boost them. The emphasis will be on direction for the December meeting, but no pre-commitment is expected as the FOMC continues in a “wait and see” attitude.

Yesterday the volatility returned and we saw some decent moves across all markets, with the USD completing a 250 round trip. There was a strong reversal at the start of the US trading session, as the USD started declining at first but then reversed to close the day higher. We opened several forex signals but just three closed in profit.

GOLD Retreating $30 After Breaking Above $2,000

Gold retreated around $30 lower yesterday after rising beyond the psychologically critical level of $2,000 at the start of the US session as US bond yields started surging again. The continuous confrontation in Gaza has spurred safe-haven demand, supporting the precious metal. However, traders are treading carefully, abstaining from strong bullish positions as they await important central bank meetings this week. Yesterday we saw a pullback below $1,980, but it stopped at MAs once again where we decided to open another buy Gold signal.

XAU/USD – 60 minute chart

  • Gold Buy Signal
  • Entry Price: $1,977
  • Stop Loss: $1983
  • Take Profit: $2,005

Buying GBP/USD at MAs

GBP/USD has been declining for a few months, reaching its lowest level since March when it fell to 1.2040 early in October, although it recovered for more than a week before peaking at 1.2340 the following week. The release of the US consumer inflation data, on the other hand, supported the USD and pushed this pair lower, falling just below 1.21 this week. Although we decided to buy at the 100 SMA (green) yesterday and the price bounced after that.AUD/USD – 240 minute chart

 BITCOIN COnsolidating Above MAs

The Bitcoin market had two price increases last week, the greatest of which happened this week. The first was when Coin Telegraph announced that the SEC had approved a spot ETF, causing Bitcoin to skyrocket to $30,000. However, the price fell below $28,000 for a few days before rising again later in the week. Bitcoin closed the week at $34,500, continuing to rise and yesterday, Bitcoin reached our take profit target as the price approached $35,000.

BTC/USD – Daily chart

  • BTC Buy Signal
  • Entry Price: $33,621.7
  • Stop Loss: $32,621.69
  • Take Profit: $34,821.71

ETHEREUM Finally Overcomes the 200 Daily SMA

ETH/USD rose yesterday as well, albeit the rise was less. Late last month, the price of Ethereum began to rise above its support level, indicating that there was some buying interest and demand for Ethereum at around $1,600. Buyers have entered the zone above this level on a regular basis, but the daily chart’s 100 SMA (green) has functioned as resistance. Following the recent advance, the price surged above the 200 daily SMA (purple), but the rice has since returned and is now finishing the day at this moving average.

ETH/USD – Daily chart
  • ETH Buy Signal
  • Entry Price: $1,671.79
  • Stop Loss: $1,371
  • Take Profit: $1,971
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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