Markets continue to wobble

Peter Iosif, ACA, MBA IronFX

USD regains the momentum in the FX market

The USD regained the momentum in the FX market given also the weakening of the EUR and the tumbling of BRL, given Lula’s re-election as Brazil’s President. US financial releases could affect USD’s direction today, yet our attention turns towards New Zealand, given RBNZ’s interest rate decision in tomorrow’s Asian session. The bank is widely expected to hike the cash rate from 2.75% to 3.00%. Yet the bank is expected to continue hiking the rate even in its next meeting and should the bank fail to provide the necessary hawkishness in its forward guidance the rate hike may turn into a dovish hike and the Kiwi may lose ground.

US equities remain mixed

US equities tended to send mixed signals yesterday, yet market sentiment seems to have turned more risk-on. Anthropic’s IPO filing yesterday boosted market sentiment, regenerating market interest in the tech sector and specifically AI. Yet the market’s worries for the high CapEx necessitated by AI have not been resolved and may once again drag US equities lower.

Oil prices continue to rise

Oil prices corrected lower yesterday as market hopes for an easing of tensions in the Gulf region rose, given the negotiations of Iran with Mecca pact states. Yet renewed attacks by Houthis on Saudi Arabia underscored the tensions in the area and rekindled market worries for the supply side of the international oil market, pushing oil prices higher today.

Gold’s price remains stable

Gold’s price remained relatively stable yesterday and during today’s Asian session and the rise of the USD in the FX market left it unaffected, highlighting that the negative correlation between the USD and gold’s price remains inactive. Nevertheless a possible rise of oil prices could lift market worries for inflationary pressures in the US economy, thus weighing on gold’s price. We highlight the Fed’s interest rate decision tomorrow as the next big test for the USD.

Other highlights for today

Today we get the US Durable goods orders for September, the USD Consumer confidence for October, and the US new Home sales figure for September, while ECB President Lagarde may make some statements and API’s weekly crude oil inventories figure. In tomorrow’s Asian session, RBA’s Governor Bullock is scheduled to speak, Australia’s September CPI rates are to be released.

Charts to keep an eye out

NZD/USD bounced on the 0.5670 (S1) support line, verifying its validity. The upward motion seems to have been interrupted and the RSI indicator leveled at the reading of 50, implying a neutral market sentiment. Hence we maintain a bias for a sideways motion currently. Should the bulls take the lead, NZD/USD may aim if not break the 0.5670 (R1) resistance line. Should the bears regain control over NZD/USD could break the 0.5670 (S1) support line and start aiming for the 0.5575 (S2) support level.

WTI’s once again bounced on the upward trendline guiding it yet is still just above the 101.00 (S1) support line. We maintain for the time being our bullish outlook for the commodity’s price, given that the upward trendline remains intact and the RSI indicator remains between the readings of 50 and 70, signalling a bullish market sentiment for WTI’s price. Should the bulls remain in charge, we may see WTI’s price aiming for the 108.85 (R1) resistance line. Should the bears be in charge, we may see WTI breaching the 101.00 (S1) support line and start actively aiming for the 94.30 (S2) support base.

Calendar follows

NZD/USD daily chart

Support: 0.5670 (S1), 0.5575 (S2), 0.5485 (S3)
Resistance: 0.5765 (R1), 0.5865 (R2), 0.5995 (R3)

WTI daily chart

Support: 101.00 (S1), 94.30 (S2), 87.55 (S3).
Resistance: 108.85 (R1), 114.00 (R2), 119.50 (R3).

Author

Peter Iosif, ACA, MBA

IronFX

Mr. Iosif joined IronFX in 2017 as part of the sales force. His high level of competence and expertise enabled him to climb up the company ladder quickly and move to the IronFX Strategy team as a Research Analyst. Mr.

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