Cautious trade in neck and neck election race

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 door is now open for the next major upside extension towards the 2018 high at 1.4377. Any setbacks should be well supported ahead of 1.2500.

• R2 1.3175 – 4 October high – Medium
• R1 1.3103 – 15 October high – Strong
• S1 1.2907 – 23 October low – Medium
• S2 1.2900 – Figure – Medium

GBPUSD – fundamental overview

The Pound ran into some resistance on Monday after contending with a less impressive run of economic data in the form of a sliding Lloyd's business barometer and dump in CBI retail sales. Key standouts on Tuesday’s calendar come from German consumer confidence, UK consumer credit and mortgage approvals, a Bank of Canada Macklem speech, Canada wholesale sales, the US goods trade balance, US Case Shiller, US house prices, JOLTs job openings, and consumer confidence.

USDJPY – technical overview

The market is looking to resume the longer-term uptrend after an intense correction in 2024. A higher low is ideally sought out above 140.00 in favor of a bullish continuation. A weekly close back above 150.00 will hint at the start to longer-term uptrend resumption.

• R2 155.22 – 30 July high – Strong
• R1 153.89 – 28 October high – Medium
• S1 151.45 – 25 October low – Medium
• S2 149.08 – 21 October low – Medium

USDJPY – fundamental overview

Jobs data out of Japan early Tuesday came in more or less as expected and didn't factor much into price action. At the moment, the Yen is still contending with political uncertainty in the aftermath of the weekend election. Key standouts on Tuesday’s calendar come from German consumer confidence, UK consumer credit and mortgage approvals, a Bank of Canada Macklem speech, Canada wholesale sales, the US goods trade balance, US Case Shiller, US house prices, JOLTs job openings, and consumer confidence.

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. A monthly close back above 0.7000 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.6724 – 21 October high – Strong
• R2 0.6662 – 24 October high – Medium
• S1 0.6500 – Psychological– Medium
• S2 0.6472 – 6 August low – Strong

AUDUSD – fundamental overview

Positioning ahead of tomorrow's Aussie inflation data, concerns around the global macro outlook, and a technical break back below the 200-Day SMA have all been factoring into the latest run of Aussie weakness. Key standouts on Tuesday’s calendar come from German consumer confidence, UK consumer credit and mortgage approvals, a Bank of Canada Macklem speech, Canada wholesale sales, the US goods trade balance, US Case Shiller, US house prices, JOLTs job openings, and consumer confidence.

USDCAD – technical overview

A sustained hold above 1.3000 over the past several months 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, with a break to open a retest of the 2020 high just ahead of 1.4700. Setbacks should be very well supported down into the 1.3000 area.

• R2 1.3947 – 5 August/2024 high – Strong
• R1 1.3909 – 28 October high – Medium
• S1 1.3813 – 24 October low – Medium
• S2 1.3747 – 17 October low – Strong

USDCAD – fundamental overview

The Canadian Dollar simply can't catch a break. Bank of Canada policy has turned increasingly dovish, all while the price of oil remains under pressure and Canada economic data deteriorates. Last Friday, the Canadian Dollar took another hit after retail sales came in much weaker than expected. Key standouts on Tuesday’s calendar come from German consumer confidence, UK consumer credit and mortgage approvals, a Bank of Canada Macklem speech, Canada wholesale sales, the US goods trade balance, US Case Shiller, US house prices, JOLTs job openings, and consumer confidence.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action.

• R2 0.6120 – 11 October high – Strong
• R1 0.6053 – 23 October high – Medium
• S1 0.5913 – 6 August low – Medium
• S2 0.5850 – 5 August/2024 low – Strong

NZDUSD – fundamental overview

New Zealand filled jobs were flat in September after a downward revision to August and overall, the slowdown in economic data highlights renewed concerns about the outlook for monetary policy. The door is open for the RBNZ to consider more rate cuts than what has been on the table, something that is factoring into the latest run of weakness. Key standouts on Tuesday’s calendar come from German consumer confidence, UK consumer credit and mortgage approvals, a Bank of Canada Macklem speech, Canada wholesale sales, the US goods trade balance, US Case Shiller, US house prices, JOLTs job openings, and consumer confidence.

US SPX 500 – technical overview

The longer term uptrend remains intact and dips continue to be exceptionally well supported. Critical support comes in at 5093, with only a break back below this level to compromise the structure and open the door for a more significant corrective decline. Until then, the focus remains on a continued push to fresh record highs.

• R2 5900 – Psychological– Medium
• R1 5891 – 17 October/Record high – Medium
• S1 5768 – 23 October low – Medium
• S2 5726 – 2 October low – Strong

US SPX 500 – fundamental overview

The US equities market remains exceptionally well supported in 2024 on the back of an ongoing expectation for more rate cuts than less going forward. Investors are feeling better about a soft landing in the US economy and this has also been accompanied by an accommodative adjustment of Fed policy. It will however be important to keep an eye on inflation, bigger picture economic data, US election and geopolitical risk in the weeks and months ahead.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and this next major upside extension into the 3000 area. Setbacks should now be well supported above 2500 on a monthly close basis.

• R2 2800 – Psychological– Strong
• R1 2759 – 23 October/Record high – Medium
• S1 2602 – 10 October low – Strong
• S2 2547 – 18 September low – Strong

GOLD (SPOT) – fundamental overview

The yellow metal has pushed record highs in 2024 with solid demand from medium and longer-term accounts. These players are more concerned about inflation, geopolitical risk and a less upbeat global growth outlook. All of this should keep the commodity well supported over the coming months.