The U.S. main indices held an impressive rally with growth by more than 2% for #SP500. Now rally has stalled as focus shifts to Fed’s monetary policy decision

No changes from FOMC is expected today, but however, there is room to strengthen the American currency.

According to CME’s FedWatch tool, the markets price only 80% probability of raising the rates again by the year end, which is lower than a month ago.

In the case that the Fed shows its confidence in the economy and is determined to prevent overheating, the U.S. dollar may return to growth, which was interrupted at the beginning of the month due to the pre-election uncertainty.

At the same time, it is not wise to completely exclude surprises. The heightened turbulence of the markets last month may capture the central bank's attention.

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In your opinion, how the upcoming FOMC Meeting would affect the U.S. stock market?
anonymous poll

The market will be under pressure – 11
👍👍👍👍👍👍👍 55%

The market will rise – 6
👍👍👍👍 30%

Meeting results won’t affect – 3
👍👍 15%

👥 20 people voted so far.

Wave Analysis: #Silver is expected to fall further and re-test the next support level 14.30. Read more

Wave Analysis: #AUDCHF is likely to rise further and re-test the next resistance level 0.7400. Read more

🗓 Important upcoming events and publications for November 9 (GMT):

🇬🇧 09:30 UK GDP can seriously affect the #GBP dynamics. According to forecasts, the economy is expected to grow by 0.1% in September, and by 0.6% in the third quarter, after 0.4% in the second. This will be a preliminary assessment, which most rarely coincides with expectations and therefore may have the most serious impact on the markets.

🇺🇸 13:30 The US Producer Price Index is expected to add 0.3% in October and accelerate to 2.7% y/y. Stronger inflation data could spur an increase of #USD on speculation that the Fed will raise rates faster.

🇺🇸 15:00 US UoM Consumer Sentiment Index is able to influence the #USD. A rise above 98.6 (the previous value) could have a positive effect on stock markets and weaken the dollar positions on renewed demand for risks.

Visit https://fxpro.news/economic-calendar/ for more details.

The growth wave of the dollar on Thursday supported the Fed. Keeping the policy unchanged, the U.S. Central Bank called the economy "strong" and highlighted the need to maintain its course to gradual rates hiking.

At the same time, it is worth mentioning that over the past month the markets have become less believing that the Fed will produce more than three increases in rates next year. Latest data from CME’s FedWatch tool indicate that investors are considering a 27.8% chance to see more than three hikes, against 31.5% a month earlier.

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Despite a small decline immediately after the announcement of the election results, the U.S. dollar has turned to growth, adding 1.2% to the Wednesday lows.

#WeeklyTrends:

📈 US indices have rapidly risen after the US elections, allowing to dismiss the decline in October. The Thursday-Friday correction does not look so scary now, as long as the S&P500 remains above the 200-day average;

📈 The US dollar has also returned to the growth after a slight hitch against most competitors, as the US Fed confirmed confidence in the economy strength. The raising interest rates are in focus. This attitude of the Fed is enhancing the divergence with many central banks of other countries where economic data is not so strong;

📉 Falling oil is gaining momentum again. The trend for a sharp decline persists for more than a month. During this period, the prices of the main brands (Brent and WTI) lost more than 20%, formally entering the bear market. The reason, as in 2014, is overproduction of oil and unwillingness to lose its market share.

📉 Disputes over the Italy budget are in no hurry to retreat. The single currency and government bonds once again have come under pressure: the issue may remain in the market’ focus next week.

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#FxProMedia: TOP-6 most interesting publications of this week:

1️⃣ Yahoo Finance: "Will We See a Lame Duck After the US Election?"
2️⃣ Reddit.com: "Weekly economic highlights"
3️⃣ Investing: "Untimely Hawkishness Of The Largest Central Banks"
4️⃣ Nasdaq: "How FOMC will Affect the Markets Today"
5️⃣ BolsaMania: "Morgan Stanley: el petróleo puede caer a 77 dólares pese a las sanciones a Irán"
6️⃣ Trading View: "Closing below $70 is a sign for further losses for Brent"

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Wave Analysis: #Copper is expected to fall further and re-test the next key support level 265.00. Read more

Wave Analysis: #GBPJPY is expected to fall further and re-test the next support level 147.00. Read more

Major cryptocurrencies show a decline of about 1% at the end of the week, however, based on the results of 7 days they are still in positive territory

Crypto community believes that crypto market has gained momentum on the back of mid-term elections in the United States where cryptocurrency & blockchain supporters won seats in a number of the states.

Stock indices declining from the historic highs are also support strong demand for digital assets. Although current stability can be more associated with the prevalence of “buy and hold" approach: according to a CoinMetrics study only one BTC out of four coins was moved in the last six months.

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🗓 On Monday, November 12, no important statistics are scheduled to be published from the USA and Europe.

Market interest is expected to remain concentrated around:

ℹ️ the likely agreement of OPEC+ to reduce production by 1 million barrels per day;

ℹ️ speculation that May is losing support from the government on the Brexit issue;

ℹ️ standoff over Italy's budget: any changes should be submitted to the European Commission by Tuesday.

Visit https://fxpro.news/economic-calendar/ for more information.

The American dollar has been showing growth during the last four weeks, managing to return to the annual highs area. #USDX it had closed previous week at the highest level in 16 months.

Despite the drawdown at the beginning of the week, caused by the traditional pressure on the currency due to pre-election uncertainty, the dollar quickly shake off these fears and has began to rise. Now USD is fully able to continue this trend because of several reasons.

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Wave Analysis: #Gold is expected to fall further and re-test the next support level 1180.00. Read more

Wave Analysis: #EURNZD is expected to fall further and re-test the next support level 1.6600. Read more

🗓 Important upcoming events and publications for November 13 (GMT):

🇬🇧09:30 U.K. Labor Market Report could seriously affect the position of the currency pairs with #GBP. Most attention should be paid to the dynamics of unemployment claims. The growth observed in the recent months is an unpleasant sign for the economy.

🇩🇪 10:00 ZEW business sentiment index in Germany and the EU is a respected indicator of economic health. Since April, the Germany Index is in red zone, that demonstrates the pessimists’ predominance. The analysts do not expect significant improvement of this indicator, after its fall to -24.7 in October. Weak data could increase the pressure on the #EUR.

🇺🇸 11:00 U.S. NFIB Small Business Optimism Indicator had reached the record levels earlier this year. The markets always maintain the rather high expectations from this index: a sharp recession could sow doubts about US economic growth and cool demand for the #USD.

Visit https://fxpro.news/economic-calendar/ for more details.