About the falling Yen and more intervention

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. A break above the September high at 1.1739 will solidify the recovery. Until then, look for setbacks to be well supported ahead of 1.0800.

• R2 1.1496– 5 October high – Strong
• R1 1.1440 – 17 October high – Medium
• S1 1.1058 – 13 October low – Medium
• S2 1.0924 – 12 October low – Medium

GBPUSD – fundamental overview

The Pound came under some pressure after the BOE denied FT claims of a QT delay beyond October 31. Meanwhile PM Truss isn't getting much love, 70 points underwater according to a recent poll. Key standouts on today’s calendar come from UK inflation reads, Eurozone construction output and inflation, Canada inflation data, US housing starts and building permits, and the Fed Beige Book late in the day.

USDJPY – technical overview

Technical studies are looking quite stretched on the longer-term chart, warning of consolidation and correction in the days and weeks ahead. Look for additional upside from here to be well capped ahead of 150.00. Next key support comes in at 143.52.

• R2 150.00 – Psychological – Strong
• R1 149.39 – 18 October/2022 high – Medium
• S1 146.42 – 14 October low – Medium
• S2 143.52 –5 October low – Strong

USDJPY – fundamental overview

The Yen has extended declines to fresh multi-year low levels, sinking below pre-intervention levels from September to its lowest levels since 1990. Policy divergence continues to be a big deal here, with yields moving more and more in the US Dollar's favour. Officials continue to jawbone but this has had no effect. Key standouts on today’s calendar come from UK inflation reads, Eurozone construction output and inflation, Canada inflation data, US housing starts and building permits, and the Fed Beige Book late in the day.

AUDUSD – technical overview

Overall pressure remains on the downside with the market confined to a well defined downtrend. A break back above 0.6682 would be required to take the pressure off the downside. Until then, scope exists for deeper setbacks towards 0.6000.

• R1 0.6433 – 7 October high – Medium
• R2 0.6348 –14 October high – Medium
• S1 0.6170 –13 October/2022 low – Medium
• S2 0.6100 – Figure – Strong

AUDUSD – fundamental overview

The latest RBA Minutes leaned more dovish after showing concern about the weakening economy and concern the central bank was hiking too fast. Key standouts on today’s calendar come from UK inflation reads, Eurozone construction output and inflation, Canada inflation data, US housing starts and building permits, and the Fed Beige Book late in the day.

USDCAD – technical overview

A recent surge back above 1.3000 signals an end to a period of 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 1.4000 – Psychological – Strong
• R1 1.3978 – 13 October/2022 high – Strong
• S1 1.3600 – Figure – Medium
• S2 1.3503 – 4 October low – Strong

USDCAD – fundamental overview

Another downturn in the commodities complex and worry around the outlook for the Canada housing market have kept the Canadian Dollar from wanting to rally back too much. Key standouts on today’s calendar come from UK inflation reads, Eurozone construction output and inflation, Canada inflation data, US housing starts and building permits, and the Fed Beige Book late in the day.

NZDUSD – technical overview

Overall pressure remains on the downside with the focus on a retest of the critical low from 2020 at 0.5469. A break back above 0.5814 would be required to take the immediate pressure off the downside.

• R2 0.5814 – 6 October high – Strong
• R1 0.5720 – 19 October high – Medium
• S1 0.5512– 13 October/2022 low – Medium
• S2 0.5500 – Psychological – Strong

NZDUSD – fundamental overview

The New Zealand Dollar has been pushing higher this week and relatively outperforming. The currency was already getting some help from renewed appetite for US equities but has also benefitted from the much hotter than expected New Zealand inflation readings. Key standouts on today’s calendar come from UK inflation reads, Eurozone construction output and inflation, Canada inflation data, US housing starts and building permits, and the Fed Beige Book late in the day.

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. Back above 3808 will be required at a minimum to take the immediate pressure off the downside. Next major support comes in around 3200.

• R2 3922 – 20 September high – Medium
• R1 3808 – 5 October high – Strong
• S1 3492 – 13 October/2022 low – Medium
• S2 3400 – Round Number – Medium

US SPX 500 – fundamental overview

We've finally reached a point in the cycle where the Fed recognizes unanchored inflation expectations pose a greater downside risk than over-tightening. This is significant, as it means less investor friendly monetary policy that risks potential recession in the months ahead. Overall, we expect inflation to continue to be a problem in 2022 that results in downside pressure into rallies.

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.

• R2 1766 – 25 August high – Strong
• R1 1736 – 12 September high – Medium
• S1 1615 – 28 September/2022 low – Medium
• S2 1600 – Round Number – 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 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.