Uncertainty invites US Dollar demand

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 1.3103 – 15 October high – Medium
• R1 1.3044 – 30 October high – Strong
• S1 1.2843– 31 October low – Medium
• S2 1.2799 – 15 August low – Strong

GBPUSD – fundamental overview

There is no doubt the Pound has taken a big hit in the aftermath of the UK budget. The UK Chancellor has teed up the sale of GBP297 billion in Gilts, the second largest sale on record. All of this implies massive fiscal easing. Key standouts on Friday’s calendar come from UK manufacturing PMIs, the monthly employment report out of the US, Canada manufacturing PMIs, US ISM manufacturing, and US construction spending.

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

Earlier today, Japan manufacturing PMI data came in a little better than forecast. Meanwhile, the market is digesting the latest BOJ decision in which the central bank held on rates but signaled a willingness to hike further if targets were met. Of course, there is also still plenty of uncertainty on the political front as we wait to see how the new government takes form. Key standouts on Friday’s calendar come from UK manufacturing PMIs, the monthly employment report out of the US, Canada manufacturing PMIs, US ISM manufacturing, and US construction spending.

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 0.6537 – 30 October low– Medium
• S2 0.6472 – 6 August low – Strong

AUDUSD – fundamental overview

The Australian Dollar has come under some more pressure into Friday as it contends with softer Aussie producer prices and a downturn in global sentiment as reflected through the US equities market. Key standouts on Friday’s calendar come from UK manufacturing PMIs, the monthly employment report out of the US, Canada manufacturing PMIs, US ISM manufacturing, and US construction spending.

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 1.4000 – Psychological – Strong
• R1 1.3947 – 5 August/2024 high – Strong
• 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 with the currency falling back to retest the yearly low against the Buck from August. Bank of Canada policy has turned increasingly dovish, all while the price of oil remains under pressure and Canada economic data deteriorates. Last Friday's Canada retail sales miss has now been followed up by Thursday's Canada GDP miss. August GDP slowed to 1.3% year over year versus an expectation of 1.5%. Key standouts on Friday’s calendar come from UK manufacturing PMIs, the monthly employment report out of the US, Canada manufacturing PMIs, US ISM manufacturing, and US construction spending.

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 0.5950 – 30 October low – Medium
• S2 0.5850 – 5 August/2024 low – Strong

NZDUSD – fundamental overview

The New Zealand Dollar has been struggling into the end of the week as it contends with the latest fallout in US equities and the prospect for another 50 basis point rate cut from the RBNZ later this month. Key standouts on Friday’s calendar come from UK manufacturing PMIs, the monthly employment report out of the US, Canada manufacturing PMIs, US ISM manufacturing, and US construction spending.

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 5891 – 17 October/Record high– Strong
• R1 5817 – 31 October high – Medium
• S1 5677 – 2 October low – Strong
• S2 5642 – 13 September low – Medium

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 2791 – 31 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.