The focus is on the cautious market sentiment as major currencies and metals respond to potential inflationary pressures from a possible second Trump term and key U.S. data releases.
With CPI, PPI, and retail sales reports on the horizon, as well as Fed Chair Powell’s upcoming speech, traders are closely watching for signals that could shape the outlook for rate cuts. The EUR/USD remains near a one-year low, while the yen weakens and gold gains modestly amid evolving inflation expectations.
EUR/USD at 1.0610: Market Awaits CPI, PPI, and Fed Signals
The EUR/USD traded around 1.0610 on Wednesday, while the dollar index held near a six-month high at 105.9, as investors awaited key U.S. economic data. The October CPI report, due soon, could shape expectations for Fed rate cuts, with additional attention on Thursday’s PPI report, Friday’s retail sales, and a speech from Fed Chair Powell. The dollar remains strong, fueled by “Trump trades” betting on inflationary policies under a possible second term, which could limit Fed rate cuts. Currently, markets see a 60% chance of a December rate cut, down from 84.4% last month. The euro has dropped to a one-year low.
EUR/USD resistance levels are 1.0650, 1.0700, and 1.0750; support is at 1.0590, with further levels at 1.0550 and 1.0500.
JPY Weakens as BOJ Policymakers Split on Rate Hikes
The Japanese yen weakened toward 155 per dollar, hitting a three-month low as the U.S. dollar gained on “Trump trades” that anticipate inflationary policies limiting Fed rate cuts. Japan’s producer prices surged in October, marking the largest rise in 14 months and highlighting inflation pressures. Investors await Friday’s Q3 GDP data for further economic insights. Meanwhile, Bank of Japan meeting minutes showed policymakers divided on future rate hikes, though the bank maintains a 1% rate target by late 2025.
For USD/JPY, support levels are at 154.50 (200-day moving average), 153.40, and 152.30, while resistance is at 155.30, 156.00, and 156.50.
Markets Await U.S. Inflation Data and Fed Guidance (11.14.2024)
As the market reacts to U.S. inflation data and comments from Fed officials, major currencies and metals experience heightened volatility.
The dollar index climbs to a yearly high, supported by expectations of inflationary policies if Trump secures a second term, which could affect Fed rate decisions. Meanwhile, EUR/USD hovers near a one-year low, USD/JPY weakens further, and gold and silver face downward pressure due to rate cut speculations. Upcoming data, including PPI, retail sales, and Fed Chair Powell’s remarks, will likely influence market direction in the days ahead.
Gold Drops for Fifth Day as Fed Rate Cut Odds Shift
Gold fell to around $2,560 per ounce on Thursday, marking its fifth consecutive loss and hitting an eight-week low as a stronger dollar pressured prices following the latest U.S. CPI data. Although the CPI met expectations, the three-month annualized core inflation rate rose slightly. Despite this, the market expects a December Fed rate cut, with an 80% probability, up from 60% before the report. Gold has lost over 4% since last Friday, weighed down by speculation that inflationary policies under a potential Trump presidency might prompt the Fed to hold off on further cuts. Investors now await today’s PPI data and weekly jobless claims, with retail sales due Friday.
For gold, support levels are at $2,545, $2,520, and $2,500, while resistance is at $2,595, $2,625, and $2,660.
The British pound traded around 1.2690 on Thursday, a three-month low, pressured by a stronger U.S. dollar and expectations that Trump’s policies could drive inflation, limiting Fed rate cuts. In the UK, labor data aligned with the Bank of England’s cautious stance on rate cuts; regular pay rose 4.8% in the three months to September, and total pay growth, including bonuses, accelerated. However, the unemployment rate rose to 4.3%, with job vacancies at their lowest since May 2021. Last week, the Bank of England cut rates by 25 basis points and maintained a cautious outlook. Key UK Q3 GDP data is due later this week.
GBP/USD support levels are at 1.2685, 1.2650, and 1.2600, while resistance is at 1.2800, 1.2830, and 1.2880.
UK GDP and US Retail Sales Data Shape Markets (11.15.2024)
The market’s focus today will be on the UK GDP data, while in the US, attention will be on retail sales.
After Donald Trump’s victory in the US presidential election, the EUR/USD pair is hovering near its lowest levels of 2024, while the DXY is trading at its 52-week high. Gold, on the other hand, has tested the 2530 levels again after about 3 months.
EUR/USD at 1.0540: Dollar Set for Strong Weekly Gain
The Euro fell below $1.06, its lowest point since October 2023, as a strong dollar and concerns about trade tariffs following Trump’s election victory weighed heavily on the currency. Political instability in Germany and expectations of a 25 bps ECB rate cut in December added to the pressure. Meanwhile, Germany’s ZEW Economic Sentiment Indicator fell to 7.4 in November, well below expectations. The dollar index stayed near 106.8 on Friday, on track for its strongest week in over a month, as investors scaled back expectations for Federal Reserve rate cuts.
Fed Chair Powell indicated no rush to cut rates, highlighting the strong economy, a strong job market, and ongoing inflation. As a result, market odds for a 0.25% rate cut at the Fed’s December meeting dropped to around 59%, down from 82.5% the previous day.
EUR/USD resistance levels are 1.0560, 1.0615, and 1.0650; support is at 1.0500, with further levels at 1.0450 and 1.0400.
The Japanese yen weakened past 156 per dollar on Friday, its lowest in nearly four months, after Japan’s Q3 GDP grew just 0.2%, down from 0.5% in Q2. Annual growth slowed to 0.9% from 2.2%. Uncertainty about the Bank of Japan’s policy direction, combined with a stronger US dollar, kept pressure on the yen. The BoJ still expects to raise rates to 1% by mid-2025, despite mixed economic data and political instability.
For USD/JPY, support levels are at 154.50 (200-day moving average), 153.40, and 152.30, while resistance is at 156.50, 157.30, and 158.50.
Dollar Near Two-Year Highs, UK CPI in Focus (18.11.2024)
The US Dollar Index hovers near two-year highs at 106.6, pressuring EUR/USD at 1.0540 as hawkish Fed expectations weigh on the euro and pound.
The yen weakened to 155 after hints of gradual BoJ rate hikes, while crude oil and gold saw mixed performances amid shifting market dynamics. Gold rebounded to $2,600, supported by geopolitical tensions and Fed uncertainty. The GBP/USD at 1.2630 awaits UK CPI data, which may shape its trajectory. Silver recovered to $30.60, driven by China’s economic outlook and US PMI expectations.
The EUR/USD is trading around 1.0540, while the US Dollar Index remains stable near 106.6 on Monday, hovering close to its highest levels in two years. This comes on growing expectations for fewer Federal Reserve interest rate cuts and optimism regarding the US economy’s performance under a potential second Trump presidency. Last week, Powell signaled that the central bank has no immediate plans to lower rates, citing the economy’s resilience, a strong labor market, and ongoing inflationary pressures. Additionally, strong retail sales and inflation data reinforced a more hawkish outlook on Fed policy. While markets still anticipate a 0.25% rate cut in December, projections for further rate cuts through late 2025 have been revised down to 77 basis points, compared to over 100 basis points just a few weeks ago.
Investors are closely monitoring the potential appointment of Donald Trump’s Treasury Secretary, with Cantor Fitzgerald CEO Howard Lutnick and investor Scott Bessent emerging as leading candidates for the role. ECB President Christine Lagarde’s speech today, before tomorrow’s Eurozone CPI data release, will be analyzed for insights into future ECB policy.
In the EUR/USD pair, the initial resistance level is at 1.0600 followed by 1.0650 and 1.0700 as subsequent resistance points. On the downside, the first support level is 1.0500. If this level is breached, the next support levels to watch will be 1.0450 and 1.0400.
Gold prices surged to nearly $2,600 per ounce on Monday, recovering from their largest weekly decline since 2021, as the rally in the US dollar paused. Recent US data showed a strong rise in retail sales for October, highlighting the economy’s resilience. Comments from several Federal Reserve officials last week added uncertainty over the timing and magnitude of potential rate cuts. However, markets are still pricing at roughly a 65% probability of a 25bps rate cut in December. Investors are now focused on upcoming remarks from other Fed officials this week, looking for clearer signals on the future path of US interest rates. Meanwhile, geopolitical tensions, particularly in the Middle East and the ongoing conflict between Ukraine and Russia, could fuel safe-haven demand, providing additional support for gold.
The first support level for gold is at $2,575, followed by $2,545 and $2,520 while $2,605 serves as a key resistance level, with $2,635 and $2,665 as the next levels to monitor if this resistance is surpassed.
On Tuesday, precious metals and oil started the day with an increase due to geopolitical tensions.
In the dollar market, however, we see that after a significant rally, the pairs are beginning to rise again as profit-taking continues. In the Eurozone, we will see whether the rise in the EUR/USD pair continues with the release of the upcoming CPI data today.
Japanese Yen Gains on Speculation of Possible Intervention
The Japanese yen strengthened to around 154 per dollar on Tuesday, recovering from four-month lows, as authorities issued warnings against excessive forex moves. Finance Minister Katsunobu Kato emphasized the government would monitor exchange rates and take action if needed. MUFG also suggested Japan could accelerate interest rate hikes due to persistent inflation. However, BOJ Governor Kazuo Ueda said any rate increases would be gradual, without giving a specific timeline. The yen has dropped over 10% since September, impacted by uncertainty over BOJ policy and a stronger dollar driven by expectations of fewer Fed rate cuts.
In the USD/JPY pair, the first support level is at 153.80. If this level is broken, the next support levels to monitor are 152.50 and 151.80. On the upside, resistance levels are at 156.10, 157.50, and 158.00, respectively.
Gold surged above $2,620 per ounce on Tuesday, reaching its highest point in a week, primarily due to a weakening US dollar. Market focus has now shifted to remarks from Federal Reserve officials, as investors seek more insight into the central bank’s stance on monetary easing. Expectations for a rate cut of 0.25% at the Fed’s December meeting have fallen to just below 59%, a decrease from 62% the previous day and over 65% a week earlier, according to CME FedWatch. Investors are also closely tracking President-elect Donald Trump’s cabinet picks. Additionally, growing geopolitical uncertainties are driving increased demand for safe-haven assets like gold, as tensions continue to rise in the Middle East and between Russia and Ukraine.
The first support level for gold is at $2,575, followed by $2,545 and $2,525 while $2,635 serves as a key resistance level, with $2,691 and $2,711 as the next levels to monitor if this resistance is surpassed.
Russia-Ukraine Developments Test Market Strength (11.20.2024)
Metals continued their upward movement on Wednesday with increasing tensions between Russia and Ukraine.
The dollar, which rallied following Trump’s victory, declined due to profit-taking but has since rebounded from the 106 level and is rising again. On the UK side, today’s upcoming CPI data will be crucial in determining the direction of GBP/USD. Meanwhile, in the US, data remains subdued as the week progresses.
The EUR/USD pair has struggled to gain momentum, trading below the $1.06 mark and at risk of further declines. The strength of the US dollar has been the dominant factor in foreign exchange markets in recent weeks, outweighing geopolitical concerns. This has put downward pressure on all major currency pairs, driven by rising inflation fears following Trump’s victory and the Federal Reserve’s indication that it will slow its rate cuts.
Euro faces challenges from political instability in Europe, weakening economic data from the Eurozone, and potential escalations in the Russia-Ukraine conflict. While US data is light this week, global PMIs on Friday could increase volatility.
The dollar index maintained its recent drop, settling around 106.2 on Wednesday, as the initial surge in demand for safe-haven currencies, triggered by the intensifying Russia-Ukraine conflict, began to fade.
EUR/USD resistance levels are 1.0600, 1.0650, and 1.0700, with support at 1.0550, 1.0500, and 1.0450.
GBP/USD fluctuated just below the 1.2700 mark, as traders of the pair braced for a significant release of UK economic data, highlighted by the Consumer Price Index (CPI) inflation figures for October. With US economic data taking a backseat on the same day, attention in the pair shifted to the UK reports, which could influence the Bank of England’s (BoE) stance on potential rate cuts for the remainder of the year. In its Monetary Policy Report released on Tuesday, the BoE adopted a cautious tone, stating that interest rates remain “moderately restrictive.” As a result, market participants are now pricing in less than a 20% probability of an additional rate cut by the BoE this year.
Key support levels for the GBP/USD pair are at 1.2595, 1.2520, and 1.2475. On the upside, resistance levels to watch are at 1.2700, 1.2740, and 1.2820.
Markets Rattle Amid Geopolitical Strains and Rate Speculation
Global markets are navigating a volatile landscape as escalating geopolitical tensions, including new developments in the Russia-Ukraine war, and heightened risks in the Middle East drive safe-haven demand for gold while weighing on risk-sensitive currencies.
The Euro and Pound remain under pressure amid policy uncertainty, while the Yen struggles with domestic economic concerns and dollar strength. Meanwhile, industrial metals like silver face headwinds from weaker demand prospects, and investors await key central bank rate decisions for further direction.
Geopolitical Strains and Wage Pressures Weigh on the Euro
The Euro/Dollar is trading around 1.0545 on Thursday after yesterday’s sell of, pressured by a general dollar strength, mounting tensions between Russia and Ukraine, and growing concerns about downside risks to the Eurozone economy. Reports emerged that Ukraine had fired UK cruise missiles into Russia for the first time. Meanwhile, in its annual Financial Stability Review, the ECB highlighted that heightened geopolitical tensions and policy uncertainties are amplifying sovereign vulnerabilities, while rising global trade tensions are increasing the likelihood of adverse economic shocks. On the other hand, negotiated wages in the Euro Area rose 5.4% YoY in Q3, the most since the euro was introduced, complicating the ECB’s plans for interest rate cuts. The central bank is still expected to deliver its fourth 25 bps rate cut in December.
In the EUR/USD, the first resistance level is 1.0600 followed by 1.0650 and 1.0700 respectively. On the downside the first support level is 1.0550 and next support levels to watch are 1.0500 and 1.0450 consecutively.
