Market Brief


USD Under Pressure as Initial Jobless Claims Stay High

With U.S. jobless claims holding above expectations and inflation data showing limited improvement, are markets starting to price in earlier Fed easing? Could rising unemployment signals and persistent price pressures reignite volatility across USD pairs, bonds, and equities in the weeks ahead?

Read below what our desk thinks, and the important levels to watch this week.

This market brief is an overview of the week ahead and some of the events we see as being important to the markets.

Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up-to-the-minute market analysis see our live trading room.

INDICES

AUSTRALASIA

ASX – 8989 (+62 or +0.69%)

The ASX rose this week by +0.69%, showing steady bullish momentum as prices held above last week’s range.

VOLATILITY ALERTS:

Thu 11:30 – AUD RBA Bulletin

Fri 09:00 – AUD S&P Global Services PMI (Oct)

Fri 09:00 – AUD S&P Global Manufacturing PMI (Oct)

For a move to the upside, we must now see this market close above 9021. Should this occur, we will look for a move into 9044, and if the upside momentum is strong, we could see a move higher into 9067 and potentially 9112.

If we cannot close above 8956, we could see a move back to test 8933 before a pause to the downside. A break below this level may result in a sharp move lower into 8911, and any further breaks to the downside may see a bigger move into 8867.

EUROPE

DAX (30) – 23967 (-320 or -1.32%)

The DAX dropped sharply this week, falling -1.32% as sellers regained control and short-term momentum turned bearish.

VOLATILITY ALERTS:

Fri 18:00 – EUR Unemployment Rate (Q3)

Fri 18:15 – EUR HCOB Manufacturing PMI (Oct)

Fri 18:15 – EUR HCOB Services PMI (Oct)

For a move to the upside, we must now see this market close above 24027. Should this occur, we will look for a move into 24187, and if the upside momentum is strong, we could see a move higher into 24347 and potentially 24666.

If we cannot close above 23907, we could see a move back to test 23747 before a pause to the downside. A break below this level may result in a sharp move lower into 23587, and any further breaks to the downside may see a bigger move into 23267.

US

S&P 500 – 6670 (+53 or +0.8%)

The SPX gained +0.8% this week, showing continued buying strength and maintaining its bullish trajectory.

VOLATILITY ALERTS:

Thu 23:30 – USD Initial Jobless Claims

Fri 23:30 – USD Core Inflation Rate YoY (Sep)

Fri 23:30 – USD Inflation Rate YoY (Sep)

For a move to the upside, we must now see this market close above 6686. Should this occur, we will look for a move into 6716, and if the upside momentum is strong, we could see a move higher into 6749 and potentially 6783.

If we cannot close above 6653, we could see a move back to test 6623 before a pause to the downside. A break below this level may result in a sharp move lower into 6590, and any further breaks to the downside may see a bigger move into 6557.

FOREX

AUD/USD – 0.6492 (-2 or -0.03%)

The AUDUSD was flat this week, slipping -0.03% as the pair consolidated in a tight range.

VOLATILITY ALERTS:

Thu 11:30 – AUD RBA Bulletin

Fri 09:00 – AUD S&P Global Services PMI (Oct)

Fri 09:00 – AUD S&P Global Manufacturing PMI (Oct)

Thu 23:30 – USD Initial Jobless Claims

Fri 23:30 – USD Core Inflation Rate YoY (Sep)

Fri 23:30 – USD Inflation Rate YoY (Sep)

For a move to the upside, we must now see this market close above 0.6508. Should this occur, we will look for a move into 0.6516, and if the upside momentum is strong, we could see a move higher into 0.6523 and potentially 0.6537.

If we cannot close above 0.6484, we could see a move back to test 0.6476 before a pause to the downside. A break below this level may result in a sharp move lower into 0.6469, and any further breaks to the downside may see a bigger move into 0.6455.

EUR/USD – 1.1657 (+49 or +0.42%)

The EURUSD advanced +0.42% this week, extending its upward momentum and showing renewed bullish sentiment.

VOLATILITY ALERTS:

Fri 18:00 – EUR Unemployment Rate (Q3)

Fri 18:15 – EUR HCOB Manufacturing PMI (Oct)

Fri 18:15 – EUR HCOB Services PMI (Oct)

Thu 23:30 – USD Initial Jobless Claims

Fri 23:30 – USD Core Inflation Rate YoY (Sep)

Fri 23:30 – USD Inflation Rate YoY (Sep)

For a move to the upside, we must now see this market close above 1.1696. Should this occur, we will look for a move into 1.1722, and if the upside momentum is strong, we could see a move higher into 1.1749 and potentially 1.1791.

If we cannot close above 1.1671, we could see a move back to test 1.1644 before a pause to the downside. A break below this level may result in a sharp move lower into 1.1618, and any further breaks to the downside may see a bigger move into 1.1575.

GBP/USD – 1.3425 (+80 or +0.6%)

The GBPUSD climbed +0.6% this week, extending its bullish streak as buyers pushed the pair higher.

VOLATILITY ALERTS:

Wed 17:00 – GBP Inflation Rate YoY (Sep)

Fri 17:00 – GBP Retail Sales MoM (Sep)

Fri 19:30 – GBP S&P Global Services PMI (Oct)

Thu 23:30 – USD Initial Jobless Claims

Fri 23:30 – USD Core Inflation Rate YoY (Sep)

Fri 23:30 – USD Inflation Rate YoY (Sep)

For a move to the upside, we must now see this market close above 1.3475. Should this occur, we will look for a move into 1.3514, and if the upside momentum is strong, we could see a move higher into 1.3553 and potentially 1.3620.

If we cannot close above 1.3408, we could see a move back to test 1.3369 before a pause to the downside. A break below this level may result in a sharp move lower into 1.3330, and any further breaks to the downside may see a bigger move into 1.3263.

USD/JPY – 150.37 (-149 or -0.98%)

The USDJPY dropped -0.98% this week, breaking lower as risk sentiment improved and the yen strengthened.

VOLATILITY ALERTS:

Wed 10:50 – JPY Balance of Trade (Sep)

Fri 10:30 – JPY Inflation Rate YoY (Sep)

Fri 10:30 – JPY Core Inflation Rate YoY (Sep)

Thu 23:30 – USD Initial Jobless Claims

Fri 23:30 – USD Core Inflation Rate YoY (Sep)

Fri 23:30 – USD Inflation Rate YoY (Sep)

For a move to the upside, we must now see this market close above 15075. Should this occur, we will look for a move into 15112, and if the upside momentum is strong, we could see a move higher into 15150 and potentially 15226.

If we cannot close above 15000, we could see a move back to test 14962 before a pause to the downside. A break below this level may result in a sharp move lower into 14925, and any further breaks to the downside may see a bigger move into 14848.

COMMODITIES

GOLD – 4250 (+194 or +4.78%)

Gold surged +4.78% this week, extending its rally as investors sought safety amid renewed global uncertainty.

For a move to the upside, we must now see this market close above 4260. Should this occur, we will look for a move into 4271, and if the upside momentum is strong, we could see a move higher into 4281 and potentially 4303.

If we cannot close above 4239, we could see a move back to test 4228 before a pause to the downside. A break below this level may result in a sharp move lower into 4218, and any further breaks to the downside may see a bigger move into 4196.

CRYPTOS

BITCOIN – 108512 (-6326 or -5.51%)

Bitcoin tumbled -5.51% this week, marking a decisive bearish turn as sellers drove prices sharply lower.

For a move to the upside, we must now see this market close above 108783. Should this occur, we will look for a move into 109055, and if the upside momentum is strong, we could see a move higher into 109327 and potentially 109870.

If we cannot close above 108240, we could see a move back to test 107968 before a pause to the downside. A break below this level may result in a sharp move lower into 107696, and any further breaks to the downside may see a bigger move into 107153.

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