The US Dollar was already looking good in the aftermath of the US election result and wasn’t exactly needing much help. But on Friday, the Buck got some more help from external forces including underwhelming China stimulus and a collapse in the German government.
Audio Updatehttps://www.lmax.com/blog/wp-content/uploads/sites/4/2024/11/11novlmaxaudio.mp3Technical highlights* EURUSD Strong support ahead of 1.0500 * GBPUSD Looking for next higher low * USDJPY Focus back on topside * AUDUSD Carving out major base * USDCAD Outlook remains constructive * NZDUSD Possible bottom formation * US SPX500 Fresh record high * GOLD (spot) Higher low sought out
Fundamental highlights EURUSD German government woes hit Euro hard * GBPUSD Dovish BOE Pill knock the Pound * USDJPY Yen gets boost from solid local data * AUDUSD Unimpressed with Chinese debt swap * USDCAD Canada unemployment rate holds steady * NZDUSD Kiwi suffers as high-beta FX stumbles * US SPX 500 Stocks propped CB policy, political outlook * GOLD (spot) Macro themes* supportive of higher price
30-Day Performance vs. US dollar (%)Further reading Why Warren Buffett Is Holding So Much Cash, C. Justin, The Brooklyn Investor(November 6, 2024) * How China Is Like the 19th Century U.S., B. Potter, Construction Physics* (November 1, 2024)
Choose pair:
GOLD EURUSD – technical overviewThe Euro has been in a multi-month consolidation since bottoming out in 2022. Setbacks have since been exceptionally well supported on dips below 1.0500, with a higher platform sought out ahead of the next major upside extension. Look for a push through the 2023 high at 1.1276 to strengthen the constructive outlook and extend the recovery run towards 1.2000. Only back below 1.0400 negates.
R2 1.0937 – 6 November high – Strong
EURUSD – fundamental overviewThe Euro was right back under pressure to close out the previous week on the back of the collapse in the German government and on a pricing in of more troubles for the Euro in a Trump presidency. Looking ahead, there is no first-tier data on the calendar for the remainder of the day and the focus will be on bigger picture themes and macro flows.
EURUSD – Technical charts in detailWatch now
GBPUSD – technical overviewSigns 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.
GBPUSD – fundamental overviewThe Pound came under some pressure on Friday on dovish comments from BOE Pill who said there would be more room for rate cuts if disinflation continued. Odds for a December rate cut currently trade around 20-25%. Looking ahead, there is no first-tier data on the calendar for the remainder of the day and the focus will be on bigger picture themes and macro flows.
USDJPY – technical overviewThe 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.
USDJPY – fundamental overviewThe Yen was up modestly in the final sessions of the week, getting a boost from solid economic data beats including the Japan leading index. Meanwhile, the big selloff in high-beta FX also injected some demand into the Yen as carry trades were squeezed out. Looking ahead, there is no first-tier data on the calendar for the remainder of the day and the focus will be on bigger picture themes and macro flows.
AUDUSD – technical overviewThere 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.
AUDUSD – fundamental overviewThe metals market was unimpressed with the latest Chinese debt swap and the Australian Dollar came under pressure to close out the week, giving back all of Thursday’s gains. Looking ahead, there is no first-tier data on the calendar for the remainder of the day and the focus will be on bigger picture themes and macro flows.
USDCAD – technical overviewA 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.
USDCAD – fundamental overviewThe Canadian Dollar came under pressure on Friday but managed to outperform relative to its peers on local Canada jobs data which was a net positive. Full time jobs were solid and the unemployment rate held steady at 6.5% versus the 6.6% expected. Looking ahead, there is no first-tier data on the calendar for the remainder of the day and the focus will be on bigger picture themes and macro flows.
NZDUSD – technical overviewOverall 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.
NZDUSD – fundamental overviewFriday was a risk off session for high beta FX markets and the New Zealand Dollar suffered as a consequence. It also seems the market has been taking the stronger Dollar trade in a Trump presidency more seriously. Looking ahead, there is no first-tier data on the calendar for the remainder of the day and the focus will be on bigger picture themes and macro flows.
US SPX 500 – technical overviewThe longer term uptrend remains intact and dips continue to be exceptionally well supported. Critical support comes in at 5679, 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.
US SPX 500 – fundamental overviewThe 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. Moreover, there has been a fresh wave of market optimism in the aftermath of the Trump election victory. It will however be important to keep an eye on inflation, bigger picture economic data, and geopolitical risk in the weeks and months ahead.
GOLD (SPOT) – technical overviewThe 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.
GOLD (SPOT) – fundamental overviewThe 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.