USD bulls lose steam

Peter Iosif, ACA, MBA IronFX

October’s US PPI rates in focus

USD bulls seem to be losing steam in today’s Asian session, as the market digests the more hawkish expectations for the Fed’s intentions. Today we note the release of the US PPI rates for October and a possible, beyond expectations, acceleration could lift the USD and weigh on gold’s price. On Monday’s Asian session, we highlight the release of Japan’s GDP rate for Q3, and a possible wider deceleration than expected could weigh of JPY while BoJ board member Hajime speaks , which could add more volatility for JPY pairs.

NVIDIA’s Huang resigns

US equities indexes send mixed signals yesterday as they seem to stabilise. News about Nvidia’s co-founder and CEO Jensen Huang resigning, made a sensation, as he was considered the driving force behind the company upon which substantial part of the market’s AI expectations rest. We note that despite Nvidia’s share price recovering the initial wide losses yesterday, it ended the day lower. We also note Microsoft’s global outage which could create bearish tendencies for its share price.

Oil prices inch higher

Oil prices inched higher yesterday as market worries about tensions in Iran kept market worries for the supply side of the commodity high. Comments by US President Trump that the US do not need a deal for the US-Iran conflict, directing US Vice President Vance to turn his attention elsewhere. Overall news seem to dim hopes for a possible diplomatic solution to the crisis which could push oil prices higher.

Bitcoin tumbles

In maybe the most characteristic move in the markets yesterday Bitcoin’s price tumbled losing at some point even 9% of its value. In a rather allready weak crypto-market the liquidation of cryptocurrencies met low demand, thus weighing on the crypto-king’s price. We expect the cautious market sentiment to continue given the market’s expectations for the Fed, weighing on the crypto markets at the current stage.

Other highlights for today

In today’s American session, we get the Canada’s manufacturing sales and wholesale trade, both for September, while in the US the Fed’s Collins, Logan, Bowman and Daly speak. In Monday’s Asian session, we get a slew of data from China for October and later on we get Euro Zone’s industrial output for September and UK’s CBI indicators for November.

Charts to keep an eye out

USD/JPY tended to stabilise between the 160.70 (R1) resistance line and the 159.00 (S1) support level. Despite the pair’s stabilisation we maintain a bullish outlook for USD/JPY given also that the RSI indicator remains between the readings of 50 and 70, implying a bullish predisposition of the market for the pair. Should the bulls maintain control over the pair, we may see USD/JPY breaking the 160.70 (R1) resistance line and set as the next possible target for the bulls the 162.80 (R2) resistance level. Should the bears take over, we may see USD/JPY breaking the 159.00 (S1) support level, and start aiming for the 156.60(S2) support level.

BTC/USD’s price action, tumbled yesterday and during todays’ Asian session, breaking the 69500 (R1) support lien now turned to resistance. Our bearish outlook for the crypto remains yet we warn that a correction higher could be imminent as the RSI indicator implies that the BTC’s price is at oversold levels, while the price action as such dropped below the lower Bollinger band. Should the bears continue to lead the crypto’s price lower, we may see it aiming if not reaching the 65000 (S1) support line. Should the bulls take over we may see BTC’s price breaking the 69500 (R1) resistance line and continue to break also the 72500 (R2) resistance base, revealing the 76800 (R3), revealing the 76800 (R3) level.

Calendar follows

USD/JPY cash daily chart

Support: 159.00 (S1), 156.60(S2), 155.00 (S3).
Resistance: 160.70 (R1), 162.80 (R2), 164.00 (R3).

BTC/USD daily chart

Support: 65000 (S1), 61450 (S2), 57870 (S3).
Resistance: 69500 (R1), 72500 (R2), 76800 (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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