How will the week close out?

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

Economic data out of the UK on Thursday was softer than expected as reflected in PMI and business optimism reads. Nevertheless, the Pound was able to put in a recovery on the back of some broad based US Dollar selling against the major currencies. Key standouts on Friday’s calendar come from Eurozone consumer inflation expectations, German Ifo reads, Canada housing data and retail sales, US durable goods and Michigan sentiment.

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 153.90 – 31 July high – Strong
• R1 153.19 – 23 October high – Medium
• S1 149.08 – 21 October low – Medium
• S2 147.34 – 8 October low – Medium

USDJPY – fundamental overview

Earlier today, we saw Tokyo CPI dip below 2% for the first time in five months. At the same time, this was expected, with the data even coming in a little firmer than forecast. Meanwhile, FinMin Kato reiterated concerns over the Yen’s high volatility and the need for close attention to fluctuations in the foreign exchange market. Key standouts on Friday’s calendar come from Eurozone consumer inflation expectations, German Ifo reads, Canada housing data and retail sales, US durable goods 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. A monthly close back above 0.7000 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.6824 – 29 August high – Strong
• R2 0.6760 – 11 October high – Medium
• S1 0.6614 – 23 October low– Medium
• S2 0.6600 – Figure – Medium

AUDUSD – fundamental overview

Most of the latest downside pressure on the Australian Dollar comes from a downturn in global sentiment into the end of the week. Next week's Aussie CPI data will be a key focus and the market will be waiting to digest the data for clearer insight into the direction of monetary policy. Key standouts on Friday’s calendar come from Eurozone consumer inflation expectations, German Ifo reads, Canada housing data and retail sales, US durable goods and Michigan sentiment.

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 1.3869 – 24 October high – Medium
• S1 1.3689 – 10 October low – Medium
• S2 1.3648 – 19 September high – Strong

USDCAD – fundamental overview

The Canadian Dollar has been hit hard on a readjustment of Bank of Canada policy expectations. This week's 50 basis point rate cut and dovish outlook have opened fresh downside on the currency, while a downturn in commodities and overall risk sentiment has only added to the weakness. Key standouts on Friday’s calendar come from Eurozone consumer inflation expectations, German Ifo reads, Canada housing data and retail sales, US durable goods and Michigan sentiment.

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 0.6379 – 30 September/2024 high – Strong
• R1 0.6220 – 4 October high – Medium
• S1 0.5987 – 25 October low – Medium
• S2 0.5974 – 15 August low – Strong

NZDUSD – fundamental overview

The New Zealand Dollar already suffering from a downturn in global investor sentiment has taken an added hit on the back of the latest discouraging ANZ Roy Morgan consumer confidence data. The data came in at 91.2 against 95.1 previous. Key standouts on Friday’s calendar come from Eurozone consumer inflation expectations, German Ifo reads, Canada housing data and retail sales, US durable goods and Michigan sentiment.

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 5740 – 9 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.