The US jobs report deepens dollar retreat
US data came out so weak that the market could celebrate. The US labour market added 150k jobs in October after 297k (revised from 336k) and expected 180k.
The unemployment rate unexpectedly rose from 3.8% to 3.9% despite the share of the economically active population falling from 62.8% to 62.7%. Wage growth slowed from 4.3% to 4.1%, the lowest over two years.
It was the perfect report to confirm that America is slowing down enough to justify a halt in interest rate hikes while not feeling bad enough to say a recession is coming.
This report is the perfect combination for risk demand in the short term. The labour market continues to create jobs at the pace of a healthy economy. At the same time, wage growth is slowing, not accelerating. The rising unemployment rate reflects increased interest in finding a new job.
US data came out so weak that the market could celebrate. The US labour market added 150k jobs in October after 297k (revised from 336k) and expected 180k.
The unemployment rate unexpectedly rose from 3.8% to 3.9% despite the share of the economically active population falling from 62.8% to 62.7%. Wage growth slowed from 4.3% to 4.1%, the lowest over two years.
It was the perfect report to confirm that America is slowing down enough to justify a halt in interest rate hikes while not feeling bad enough to say a recession is coming.
This report is the perfect combination for risk demand in the short term. The labour market continues to create jobs at the pace of a healthy economy. At the same time, wage growth is slowing, not accelerating. The rising unemployment rate reflects increased interest in finding a new job.
This combination has reinforced expectations that inflation is on the path to normalisation and that the central bank will not need to tighten policy again. It is only necessary to wait for the effect of the already implemented increases and not to press the pedal of monetary tightening extremely hard.
Reduced chances of further rate hikes in December played against the dollar. On Friday, the dollar index fell to its lowest level in six weeks. Friday's sharp decline sets us up to see a switch to a more classic correction pattern with a pullback to the 61.8% or 104 level from the initial rally from 99 to 107 after a month of staying within the 76.4% correction with support above 105.2.
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Reduced chances of further rate hikes in December played against the dollar. On Friday, the dollar index fell to its lowest level in six weeks. Friday's sharp decline sets us up to see a switch to a more classic correction pattern with a pullback to the 61.8% or 104 level from the initial rally from 99 to 107 after a month of staying within the 76.4% correction with support above 105.2.
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Altcoin season has started. Leading altcoins from the top ten are growing at 5-15% per week, with Solana (+26%) showing record growth in the top 30, climbing to seventh place in the capitalisation ranking.
#Bitcoin has formed a short-term range with a slight upward bias and trades increasingly confident above $35K. Thawing investor sentiment towards cryptocurrencies brings capital back into the industry after a long "winter". However, high interest rates are unlikely to allow crypto to easily repeat the momentum of 2020-2021.
#XRP's growth is gaining momentum. Over the past three weeks, the price has risen by a cumulative 30%, but since the beginning of this week, it has increased by over 13% to $0.6340. On the daily timeframe, the "golden cross" - a bullish pattern whose appearance often attracts additional buying - has almost formed. The picture remains bullish, suggesting an essential resistance test at $0.85 at the earliest.
#Bitcoin has formed a short-term range with a slight upward bias and trades increasingly confident above $35K. Thawing investor sentiment towards cryptocurrencies brings capital back into the industry after a long "winter". However, high interest rates are unlikely to allow crypto to easily repeat the momentum of 2020-2021.
#XRP's growth is gaining momentum. Over the past three weeks, the price has risen by a cumulative 30%, but since the beginning of this week, it has increased by over 13% to $0.6340. On the daily timeframe, the "golden cross" - a bullish pattern whose appearance often attracts additional buying - has almost formed. The picture remains bullish, suggesting an essential resistance test at $0.85 at the earliest.
Oil is trying to find a bottom. At the same time, political commentary and market sentiment are moving in the same direction, increasing the chances of a rebound.
The price of a barrel of WTI has been falling in a narrow trading range for almost two weeks now, an orderly retreat after a fairly sharp sell-off that began on 20 October.
Last week, the price began to find support as it approached $80 per barrel of WTI. Increased demand for risk assets did not prevent another attempt to push oil lower.
Since Friday, however, the arguments of the buyers have become louder. Russia and Saudi Arabia reiterated that they would extend their voluntary restrictions of 300K bpd and 1M bpd until December and the end of the year, respectively - a timely reminder of the big players' desire to keep the market in a deficit.
The price of a barrel of WTI has been falling in a narrow trading range for almost two weeks now, an orderly retreat after a fairly sharp sell-off that began on 20 October.
Last week, the price began to find support as it approached $80 per barrel of WTI. Increased demand for risk assets did not prevent another attempt to push oil lower.
Since Friday, however, the arguments of the buyers have become louder. Russia and Saudi Arabia reiterated that they would extend their voluntary restrictions of 300K bpd and 1M bpd until December and the end of the year, respectively - a timely reminder of the big players' desire to keep the market in a deficit.
Interestingly, the number of working oil rigs in the US has also collapsed. Baker Hughes reported a drop to 496 (-8), the lowest since January 2022. This calls into question the upward trend of the previous three weeks, which saw consecutive increases to 501, 502 and 504.
An earlier report last week showed that US companies had maintained a record pace of 13.2 million bpd for the past four weeks but were not ramping up. The high production figures are not translating into a rise in inventories, which are falling at a rate of 3.4% y/y to 422M barrels, remaining at the lower end of the range of the past eight years (around 400M barrels).
An earlier report last week showed that US companies had maintained a record pace of 13.2 million bpd for the past four weeks but were not ramping up. The high production figures are not translating into a rise in inventories, which are falling at a rate of 3.4% y/y to 422M barrels, remaining at the lower end of the range of the past eight years (around 400M barrels).
Insufficient commercial storage capacity may prevent the US presidential administration from replenishing the Strategic Petroleum Reserve.
On the other hand, time seems to be on the side of the bears, with more of the world's significant economies slowing down or already in contractionary phases. Interest rates are starting to bite, and government stimulus is unlikely to return soon. This would help oil rally as the authorities are now on the other side of the barricades in the fight against inflation.
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On the other hand, time seems to be on the side of the bears, with more of the world's significant economies slowing down or already in contractionary phases. Interest rates are starting to bite, and government stimulus is unlikely to return soon. This would help oil rally as the authorities are now on the other side of the barricades in the fight against inflation.
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#WaveAnalysis
#USDJPY reversed from support level 149.30
Likely to rise to resistance level 152.00
USDJPY currency pair recently reversed up from the key support level 149.30 (which has been reversing the pair from the middle of October as can be seen below).
The support level 149.30 was strengthened by the 50% Fibonacci correction of the previous sharp upward impulse from the start of last month.
Given the strength of the active uptrend, USDJPY can be expected to rise further toward the next resistance level 152.00 (top of wave iii and the target for the completion of the active impulse wave v).
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#USDJPY reversed from support level 149.30
Likely to rise to resistance level 152.00
USDJPY currency pair recently reversed up from the key support level 149.30 (which has been reversing the pair from the middle of October as can be seen below).
The support level 149.30 was strengthened by the 50% Fibonacci correction of the previous sharp upward impulse from the start of last month.
Given the strength of the active uptrend, USDJPY can be expected to rise further toward the next resistance level 152.00 (top of wave iii and the target for the completion of the active impulse wave v).
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Crypto market cap rose 0.6% over the past 24 hours to $1.33 trillion as altcoins outperformed.
According to CoinShares, investments in crypto funds rose sharply again last week, adding $261 million, the sixth consecutive week of inflows. Bitcoin investments increased by $229 million, Ethereum by $18 million and Solana by $11 million.
#XRP rose to $0.73 by the end of the day on Monday. Reaching this level triggered a solid but short-lived wave of profit-taking. This sentiment has spread, albeit with less intensity, to other leading altcoins such as #Solana, #Cardano and #Litecoin. So far, it looks like a quick recharge rather than the start of an extended correction, as the weakness is neither shared by Bitcoin and Ether nor by the equity markets.
#Ethereum, which had seen limited gains recently, rose for the fifth day in a row on Tuesday, trading close to $1900, the highest level in four months.
According to CoinShares, investments in crypto funds rose sharply again last week, adding $261 million, the sixth consecutive week of inflows. Bitcoin investments increased by $229 million, Ethereum by $18 million and Solana by $11 million.
#XRP rose to $0.73 by the end of the day on Monday. Reaching this level triggered a solid but short-lived wave of profit-taking. This sentiment has spread, albeit with less intensity, to other leading altcoins such as #Solana, #Cardano and #Litecoin. So far, it looks like a quick recharge rather than the start of an extended correction, as the weakness is neither shared by Bitcoin and Ether nor by the equity markets.
#Ethereum, which had seen limited gains recently, rose for the fifth day in a row on Tuesday, trading close to $1900, the highest level in four months.
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Gold came under pressure this week, losing around 1.4% to $1966. This drops below previous local lows, forming a short-term downtrend and fitting into a pattern of declines following local overbought conditions.
Gold has been in strong demand since October 7th, following the war in Gaza. However, technical patterns are still at work. We have seen that the entry into the overbought area on the Relative Strength Index on the daily timeframe caused the growth to stall, and more active selling began early last week. As a result, the RSI retreated from the overbought area, which is often a medium-term signal for the end of growth and, at the very least, the beginning of a full-blown correction.
According to the Fibonacci pattern, we should pay more attention to the price dynamics around $1960, which is 76.4% of the amplitude of the October move. With strong buying interest, gold could find support and return to growth. Such shallow corrections are common in strong bull markets.
Gold has been in strong demand since October 7th, following the war in Gaza. However, technical patterns are still at work. We have seen that the entry into the overbought area on the Relative Strength Index on the daily timeframe caused the growth to stall, and more active selling began early last week. As a result, the RSI retreated from the overbought area, which is often a medium-term signal for the end of growth and, at the very least, the beginning of a full-blown correction.
According to the Fibonacci pattern, we should pay more attention to the price dynamics around $1960, which is 76.4% of the amplitude of the October move. With strong buying interest, gold could find support and return to growth. Such shallow corrections are common in strong bull markets.
But we see more potential in a more profound correction with a pullback to $1932. The 61.8% retracement, a classic Fibonacci pattern, alongside the 200-day MA passes here.
The ability to hold above this level will keep the focus on sustaining the bull market in gold. If the sellers don't stop here, the broader investment community could join in the selling. As in June 2022 or September 2023, a break below this line could be followed by a sharp decline. In the above cases, the price fell 8.5% and 6%, respectively, after a break below the 200-day average. Repeating this amplitude would wipe out October's gains or the gains of the last 12 months.
A fall back to near $1800 would take gold below the 200-week average, which it touched so nicely during the reversal in early October. However, it is rare to see such nice touches in gold. For example, a couple of them in 2017 failed to become a starting point for gold's rally, and only a dip below the 200-week MA in late 2018 revived buying interest.
The ability to hold above this level will keep the focus on sustaining the bull market in gold. If the sellers don't stop here, the broader investment community could join in the selling. As in June 2022 or September 2023, a break below this line could be followed by a sharp decline. In the above cases, the price fell 8.5% and 6%, respectively, after a break below the 200-day average. Repeating this amplitude would wipe out October's gains or the gains of the last 12 months.
A fall back to near $1800 would take gold below the 200-week average, which it touched so nicely during the reversal in early October. However, it is rare to see such nice touches in gold. For example, a couple of them in 2017 failed to become a starting point for gold's rally, and only a dip below the 200-week MA in late 2018 revived buying interest.
Aussie goes down under
The Australian dollar has lost over 1% since the start of the day on Tuesday as traders appeared unimpressed with the monetary authorities' actions.
The selling momentum hit AUDUSD following the decision to raise the key rate by 25 basis points to 4.35%, a 12-year high. The decision aligned with expectations, so touching the 0.6500 level kicked off a significant sell-off, forcing the pair to retreat below 0.64 briefly.
The RBA noted that the policy tightening was necessary for confidence that inflation would return to target within a reasonable timeframe. The decision commentary concludes by noting that it is not clear whether further increases will be required. This passage was probably the reason for the sharp decline in the Australian currency.
The Australian dollar has lost over 1% since the start of the day on Tuesday as traders appeared unimpressed with the monetary authorities' actions.
The selling momentum hit AUDUSD following the decision to raise the key rate by 25 basis points to 4.35%, a 12-year high. The decision aligned with expectations, so touching the 0.6500 level kicked off a significant sell-off, forcing the pair to retreat below 0.64 briefly.
The RBA noted that the policy tightening was necessary for confidence that inflation would return to target within a reasonable timeframe. The decision commentary concludes by noting that it is not clear whether further increases will be required. This passage was probably the reason for the sharp decline in the Australian currency.
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Since the beginning of November, #AUDUSD has added 2.8% or about 180 pips after forming a bottom for most of October. Today's dip looks more worrisome than a correction from the rise. It is worth paying attention to the pair's dynamics near 0.6390, where the 50-day moving average is.
Returning under it will make last week's rally considered false and will open a quick way to the area of lows near 0.6300. Moreover, it potentially opens the way to levels below 0.60, as touching 0.65 coincides with the 61.8% Fibonacci retracement level of the decline from the August peak to the October bottom.
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Returning under it will make last week's rally considered false and will open a quick way to the area of lows near 0.6300. Moreover, it potentially opens the way to levels below 0.60, as touching 0.65 coincides with the 61.8% Fibonacci retracement level of the decline from the August peak to the October bottom.
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#WaveAnalysis
#AUDJPY reversed from resistance level 97.35
Likely to fall to support level 96.00
AUDJPY currency pair recently reversed down from the major resistance level 97.35 (which has been reversing the pair from September of 2022).
The resistance level 97.35 was strengthened by the upper daily and weekly Bollinger Bands.
Given the strength of the resistance level 97.35 and the overbought daily Stochastic, AUDJPY can be expected to fall further toward the next support level 96.00.
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#AUDJPY reversed from resistance level 97.35
Likely to fall to support level 96.00
AUDJPY currency pair recently reversed down from the major resistance level 97.35 (which has been reversing the pair from September of 2022).
The resistance level 97.35 was strengthened by the upper daily and weekly Bollinger Bands.
Given the strength of the resistance level 97.35 and the overbought daily Stochastic, AUDJPY can be expected to fall further toward the next support level 96.00.
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#WaveAnalysis
#GBPUSD reversed from key resistance level 1.2335
Likely to fall to support level 1.2200
GBPUSD currency pair recently reversed down with the daily Shooting Star from the key resistance level 1.2335 (former strong support from May).
The resistance level 1.2335 was strengthened by the upper daily Bollinger Band and by the 50% Fibonacci correction of the downward impulse from august.
Given the strength of the resistance level 1.2335, GBPUSD can be expected to fall further toward the next support level 1.2200.
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#GBPUSD reversed from key resistance level 1.2335
Likely to fall to support level 1.2200
GBPUSD currency pair recently reversed down with the daily Shooting Star from the key resistance level 1.2335 (former strong support from May).
The resistance level 1.2335 was strengthened by the upper daily Bollinger Band and by the 50% Fibonacci correction of the downward impulse from august.
Given the strength of the resistance level 1.2335, GBPUSD can be expected to fall further toward the next support level 1.2200.
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Beautiful technical reversal of the pound
The British pound is losing for the third day in a row, having retreated to 1.2260. A technical look at the chart sets up for further declines with a renewal of the October lows with a dip under 1.20.
#GBPUSD was in demand on dips under 1.2100 during October, which formed a bottom in the pair. At the beginning of the month, we saw a pick-up in buying following the global increase in risk appetite. But this week, the bulls have retreated.
GBPUSD climbed to 1.2440 on Monday, but that touch of the 200-day moving average kicked off a sell-off that has continued for the third day. Keeping the pound below this technically important line makes it uninteresting for many big players, leaving it within a 'sell the growth' pattern.
The British pound is losing for the third day in a row, having retreated to 1.2260. A technical look at the chart sets up for further declines with a renewal of the October lows with a dip under 1.20.
#GBPUSD was in demand on dips under 1.2100 during October, which formed a bottom in the pair. At the beginning of the month, we saw a pick-up in buying following the global increase in risk appetite. But this week, the bulls have retreated.
GBPUSD climbed to 1.2440 on Monday, but that touch of the 200-day moving average kicked off a sell-off that has continued for the third day. Keeping the pound below this technically important line makes it uninteresting for many big players, leaving it within a 'sell the growth' pattern.
In addition, the recent surge also fits within a Fibonacci retracement pattern. GBPUSD declined from 1.3140 in mid-July to 1.2030 in early October, and the latest corrective surge brought the pair very close to the 61.8% retracement levels. This may have helped the bears to recharge by removing the short-term oversold condition.
After a downward reversal at the start of the week, GBPUSD could reach 1.21, which is near local support, without many obstacles on the way.
The pair's dynamics in the 1.2060-1.2100 range could be an essential indicator of the bears' seriousness. A quick drop below will open the way further to 1.1840 - near the lows of January and March. The long-term downside target for this cycle could be 1.1400.
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After a downward reversal at the start of the week, GBPUSD could reach 1.21, which is near local support, without many obstacles on the way.
The pair's dynamics in the 1.2060-1.2100 range could be an essential indicator of the bears' seriousness. A quick drop below will open the way further to 1.1840 - near the lows of January and March. The long-term downside target for this cycle could be 1.1400.
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#WaveAnalysis
#EURJPY broke key resistance level 160.00
Likely to rise to resistance level 164.00
EURJPY currency pair earlier broke above the key resistance level 160.00 (which has been reversing the pair from the middle of August).
The breakout of the resistance level 160.00 accelerated the active intermediate impulse wave (3).
Given the strength of the active daily uptrend and the impulse wave (3), EURJPY can be expected to rise further toward the next resistance level 164.00 (top of the active daily up channel).
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#EURJPY broke key resistance level 160.00
Likely to rise to resistance level 164.00
EURJPY currency pair earlier broke above the key resistance level 160.00 (which has been reversing the pair from the middle of August).
The breakout of the resistance level 160.00 accelerated the active intermediate impulse wave (3).
Given the strength of the active daily uptrend and the impulse wave (3), EURJPY can be expected to rise further toward the next resistance level 164.00 (top of the active daily up channel).
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#WaveAnalysis
#GBPAUD reversed from support level 1.8945
Likely to rise to resistance level 1.9325
GBPAUD currency pair recently reversed up from the pivotal support level 1.8945 (which has been reversing the pair from the start of July) coinciding with the lower daily Bollinger Band.
The upward reversal from the support level 1.8945 started the active intermediate impulse wave (3).
Given the strength of the active daily uptrend, GBPAUD can be expected to rise further toward the next resistance level 1.9325 (top of the previous impulse wave (1)).
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#GBPAUD reversed from support level 1.8945
Likely to rise to resistance level 1.9325
GBPAUD currency pair recently reversed up from the pivotal support level 1.8945 (which has been reversing the pair from the start of July) coinciding with the lower daily Bollinger Band.
The upward reversal from the support level 1.8945 started the active intermediate impulse wave (3).
Given the strength of the active daily uptrend, GBPAUD can be expected to rise further toward the next resistance level 1.9325 (top of the previous impulse wave (1)).
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