Signs still pointing to more risk off flow

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The November 2022 monthly close back above 1.2000 strengthens this prospect. Any setbacks should now be well supported ahead of 1.2000. Next key resistance comes in at 1.3143.

• R2 1.2289 – 24 October high – Strong
• R1 1.2176 – 25 October high – Medium
• S1 1.2069 – 26 October low – Medium
• S2 1.2037 – 4 October low – Strong

GBPUSD – fundamental overview

UK CBI data was miserable on Thursday, though the Pound got some boost on cross related demand against the Euro following the dovish ECB decision. We also saw mild broad based profit taking on US Dollar longs. Key standouts on Friday’s calendar come from Canada wholesale sales, US core PCE, and Michigan sentiment.

USDJPY – technical overview

At this stage, it looks like the market is wanting to resume the bigger picture uptrend and head back towards a retest of that multi-year high from October 2022 up at 151.95. Look for any weakness to continue to be well supported on dips.

• R2 151.00 – Figure – Strong
• R1 150.78 –  26 October/2023 high – Medium
• S1 149.10 – 23 October low – Medium
• S2 148.74 – 17 October low – Medium

USDJPY – fundamental overview

All of the talk around the market contemplating a possible shift in BOJ policy next week has gone out the window. The Yen has continued to extend declines, to the point where it's fully expected to start hearing more verbal intervention threats in the sessions ahead. Key standouts on Friday’s calendar come from Canada wholesale sales, US core PCE, and Michigan sentiment.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6200 would give reason for rethink. Back above 0.6523 will take the immediate pressure off the downside and strengthen case for a bottom.

• R1 0.6445– 11 October high – Strong
• R2 0.6400 – 25 October high – Medium
• S1 0.6270 – 26 October/2023 low – Medium
• S2 0.6170 – 13 October/2022 low – Strong

AUDUSD – fundamental overview

Aussie producer prices came in above forecast on Friday, which has helped to boost the Australian Dollar out from a yearly low. We've also seen some demand on the back of a mild wave of broad based profit taking on US Dollar longs. Key standouts on Friday’s calendar come from Canada wholesale sales, US core PCE, and Michigan sentiment.

USDCAD – technical overview

Above 1.3000 signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4000 area. Setbacks should be very well supported down into the 1.3000 area.

• R2 1.3862 – 10 March/2023 high – Strong
• R1 1.3845 – 26 October high – Medium
• S1 1.3730 – 25 October low – Medium
• S2 1.3661 – 24 October low – Medium

USDCAD – fundamental overview

Wednesday's dovish Bank of Canada hold has been followed up by slumping Canada payrolls and a drop in the CFIB business barometer to a post pandemic low. All of this has kept the Canadian Dollar under pressure into the end of the week. Key standouts on Friday’s calendar come from Canada wholesale sales, US core PCE, and Michigan sentiment.

NZDUSD – technical overview

Overall pressure remains on the downside with the market once again stalling out on a run up into the 0.6500 area. Ultimately, a break back above 0.6049 would be required to take the immediate pressure off the downside. A monthly close below 0.5800 will intensify bearish price action.

• R2 0.5930 – 16 October high – Strong
• R1 0.5873 – 24  October high – Medium
• S1 0.5773 – 26 October/2023 low – Medium
• S2 0.5740 – 3 November 2022 low – Medium

NZDUSD – fundamental overview

The New Zealand Dollar is trying to recovery from yearly lows on the back of a mild wave of broad based profit taking on US Dollar longs, and on an improvement in New Zealand consumer confidence reads. Key standouts on Friday’s calendar come from Canada wholesale sales, US core PCE, and Michigan sentiment.

US SPX 500 – technical overview

Longer-term technical studies are in the process of unwinding from extended readings off record highs. Look for rallies to be well capped in favor of lower tops and lower lows. A monthly close back above 4600 will be required to take the immediate pressure off the downside. Next key support comes in at 4200.

• R2 4300 – Round Number – Strong
• R1 4267 – 24 October high – Medium
• S1 4098 – 10 May low – Medium
• S2 4048 – 4 May low – Strong

US SPX 500 – fundamental overview

Investors continue to struggle with the reality of a higher for longer Fed policy track in the face of ongoing worry around inflation, while also contending with an escalation in geopolitical risk. Overall, we expect inflation to continue to be a problem in 2023 that results in downside pressure into rallies despite market expectations that would argue otherwise.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs. Setbacks should now be well supported above 1600 on a monthly close basis ahead of the next major upside extension. Next major resistance comes in at 2100, above which opens the next extension towards 2500.

• R2 2000 – Psychological – Strong
• R1 1998 – 20 October high – Medium
• S1 1908 – 16 October low – Medium
• S2 1868 – 12 October low – Strong

GOLD (SPOT) – fundamental overview

The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about inflation risk and a less stable and upbeat global growth outlook. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax.