US election in the spotlight

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

The Pound continues to struggle and lag in the aftermath of last week's concerning UK budget. Tax hikes on UK businesses is a major concern and pose a deeper risk to the growth outlook. Key standouts on Tuesday’s calendar come from UK services PMI reads, Canada trade, US trade, Canada and US PMI reads, and ECB Lagarde speech, the Bank of Canada Summary of Deliberations, and the US election.

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

The Yen has kept within a tight range on US election day investor caution. The BOJ has left the door open for additional hikes, which has also offset bearish Yen flow from the political uncertainty in Japan post election. Key standouts on Tuesday’s calendar come from UK services PMI reads, Canada trade, US trade, Canada and US PMI reads, and ECB Lagarde speech, the Bank of Canada Summary of Deliberations, and the US election.

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 is better bid after the RBA left rates on hold as expected but perhaps kept with a slightly more hawkish stance than expected. The RBA said underlying inflation was more indicative of inflation and remained elevated. Key standouts on Tuesday’s calendar come from UK services PMI reads, Canada trade, US trade, Canada and US PMI reads, and ECB Lagarde speech, the Bank of Canada Summary of Deliberations, and the US election.

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 1.3959 – 1 November/2024 high – Strong
• S1 1.3813 – 24 October low – Medium
• S2 1.3747 – 17 October low – Strong

USDCAD – fundamental overview

No surprise to see the Canadian Dollar rebounding on the back of a rally in commodities and energies prices. We've also seen added Canadian Dollar demand from a wave of broad based US Dollar selling into the US election. Key standouts on Tuesday’s calendar come from UK services PMI reads, Canada trade, US trade, Canada and US PMI reads, and ECB Lagarde speech, the Bank of Canada Summary of Deliberations, and the US election.

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 gotten a bit of a boost from the Aussie buying post the RBA decision. However, attention will quickly shift to the US election and how things unfold for risk markets and the US Dollar on that front. Upside in the New Zealand Dollar could also be capped in anticipation of a 50 basis point rate cut and downbeat outlook from the RBNZ when it meets again this month. Key standouts on Tuesday’s calendar come from UK services PMI reads, Canada trade, US trade, Canada and US PMI reads, and ECB Lagarde speech, the Bank of Canada Summary of Deliberations, and the US election.

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.