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.

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.

Forex Signals Update

• 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

Cryptocurrency Update

 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