Yesterday the attention of the markets was on the US unemployment claims for October, which were expected to increase slightly. Employment has been the strongest sector in the US which has been keeping consumer spending unfazed by economic headwinds, although it has been showing signs of weakness in recent months. JOLTS job opening fell below 10 million a few months back, while unemployment claims have entered a bullish phase lately, increasing every month. Yesterday the jobless claims report came above expectations, showing that benefit claims for unemployment increased more than economists had anticipated.
The numbers rose somewhat, while the USD and Treasury rates fell. The euro closed the day flat but surged just below 1.09 before completing the round trip in the US session. Cable had a similar journey and the commodity currencies were all down on the day, with the disappointing outcome of the Biden-Xi meeting weighing heavily. The summit began with some hope for global development, but it produced few outcomes and may have simply shown how fragmented the relationship has become.
Oil plummeted to its lowest level since July, with the break below the $80 level in Brent and below $75 in WTI. This will be the fourth week of decreases in a row. Natural gas remained unchanged on the day until a surprising weekly boost in the United States on additional indicators of production growth. As a result, the reduction in energy prices is deflationary, which should help the Fed accomplish its targets sooner.
Today Market Expectations
The highlight of the day will be the UK retail sales for October. In terms of recent data, the BRC retail sales index grew 2.6% year on year in October, with the accompanying statement stating that “retail sales growth slowed as high mortgage and rental costs further shook consumer confidence. Many households are also postponing their Christmas shopping in the hopes of finding a good deal during the forthcoming Black Friday deals.
After that, we have the final reading for the Eurozone October CPI (consumer price index) report, which showed a decline to 2.9% fo the headline CPI number, while core CPI fell to 4.2% YoY from 4.5% in September. The US building permits will be the last piece of economic data and they are expected to continue the declining trend in October.
Yesterday we saw some decent moves, although the volatility declined from the previous day since retail sales and the producer inflation numbers didn’t offer much. The USD started to reverse and made some gains, but stopped since traders are not expecting more hikes by the FED. We opened three trading signals although just two closed, the long term Gold signal which closed in profit and a short term fore signal which closed in loss.
GOLD Continues to Surge Toward $2,000
Gold surpassed $2,000 per ounce last month as Middle Eastern tensions rose. XAU, on the other hand, decreased in the first 10 days of this month. The obvious cause of the October jump was geopolitical concerns in the Middle East, but gold declined this month as tensions in the area did not grow further. However, following yesterday’s US inflation data, the mood has shifted and buyers have regained control. Despite the fact that the retreat came to a halt just at the 200 SMA (purple), which is currently functioning as support on this timeframe. This is a positive indicator, and gold appears to be going back toward $2,000 once more.
XAU/USD – Daily chart
- Gold Buy Signal
- Entry Price: $1,963.12
- Stop Loss: $1,949.12
- Take Profit: $1,971.12
AUD/USD Climbing Above 0.65
GBP/USD has displayed some strong bullish reversal indicators this month, but attempts to reverse the trend have failed at moving averages, with the most recent attempt ending yesterday. This currency pair was negative for several months until nearly reaching 1.20 at the beginning of October. We saw some consolidation above that huge milestone in October, and buyers are seeking to take control of this pair in November, despite encountering several roadblocks along the way.
GBP/USD – Daily chart
BITCOIN Rebounding off the 100 SMA
The volatility in cryptocurrency continues, with bitcoin losing nearly all of the gains from the previous day, in a 5% drop. The wait for an ETF announcement continues. Since the Securities and Exchange Commission approved a Bitcoin spot ETF, Bitcoin has continued to benefit from a more optimistic cryptocurrency environment. As a consequence, this cryptocurrency rose late last month, reaching $35,000 before weakening and falling. Despite not losing much ground, buyers grabbed charge and pushed the price up to more than $36,000. BTC is now trading around $35,000, and yesterday we saw another recovery off the 50 SMA (yellow), with buyers stopping just below last month’s high of $38,000. On Tuesday we saw a retreat but the 100 SMA held as support and yesterday BTC bounced above $37,000 again.
BTC/USD – Daily chart
ETHEREUM Falling Below $2,000 Again
After the SEC approved Bitcoin spot ETFs last month, Ethereum benefited from the good attitude in the crypto market and soared beyond $1,800, gaining more than $300. The zone around $1,700 became support, and it now seems that the 50 SMA (yellow) has also become support, which is fantastic. ETH/USD pushed above $2,000 yesterday, indicating that buyers are in charge and we booked profit on our Ethereum signal.
Ethereum – 240 minute Chart
- ETH Buy Signal
- Entry Price: $1,671.79
- Stop Loss: $1,371
- Take Profit: $1,971