Daily Price Outlook

Despite the risk-on sentiment in the market, the price of Gold (XAU/USD) has continued to rise for the second consecutive day on Friday. However, this upward trend can be attributed to the ongoing unrest in the Middle East and concerns about a potential slowdown in the Chinese economy, which are further bolstering the demand for XAU/USD. However, it's important to note that the positive sentiment in equity markets was seen as a key factor that cap further gains in the price of gold.

Moreover, the growing belief that the Federal Reserve is expected to stop its policy-tightening measures and may start rate cuts in June 2024 has led to a further decrease in US Treasury bond yields. Consequently, this ongoing development continues to exert downward pressure on the US Dollar and offers continued support to the non-yielding Gold price.

Moving ahead, investors seem hesitant to place strong position and are willing to remain on the sidelines in anticipation of the US monthly jobs report. This report is expected to offer insights into the Federal Reserve's potential rate-hike trajectory and could serve as a catalyst for fresh direction in XAU/USD.

Gold Price Uncertainty Amidst Fed Rate Hike Speculation and Economic Data

Gold price has remained in a narrow trading range for the past three days, awaiting a catalyst to determine its next direction. However, there is a belief that the Federal Reserve will not raise interest rates further, leading to a drop in US Treasury bond yields and a weaker US Dollar. Nevertheless, the US economy's resilience and persistent inflation may still allow for one more Fed rate hike, possibly in December 2023 or January 2024.

Fed Chair Jerome Powell has suggested that a slowdown in the job market might be necessary to ease inflation. Consequently, the upcoming US monthly jobs report could significantly influence the Fed's decision. It is worth noting that the market analysts predict an addition of around 180,000 jobs in October, a drop from the 336,000 jobs added in the prior month, with the jobless rate expected to hold steady at 3.8%.

Hence, the Gold price remains uncertain as expectations of a potential delay in further rate hikes by the Federal Reserve could support Gold, but robust economic data may limit its gains.

GOLD (XAU/USD) - Technical Analysis

In the midst of fluctuating market conditions, gold has demonstrated an impressive resilience, with its current price hovering at $1986.15, marking a modest 0.04% increment within the last 24 hours. The precious metal's enduring allure is evident in its steady trajectory on the 4-hour chart, further substantiated by key technical indicators and patterns that paint a picture of its future movements.

Gold finds itself at a critical juncture, with a pivot point established at $1,990. Immediate resistance levels lie waiting at $2,026, followed by further hurdles at $2,047 and $2,082. On the flip side, support levels are firmly placed at $1,969, with subsequent cushions at $1,934 and $1,914, which could serve as potential fallbacks in case of a retracement.

The Relative Strength Index (RSI), currently at 52, signals a slight inclination towards bullish sentiment, as it remains above the midline of 50. This positions gold in a cautiously optimistic light, suggesting a potential for upward movement without straying into overbought territory.

Meanwhile, the 50-Day Exponential Moving Average (EMA) stands at $1,980, with the current price floating above this marker. This alignment typically indicates a short-term bullish trend, reinforcing the positive sentiment echoed by the RSI.

In summary, the overall trend for gold appears bullish, particularly if prices sustain above the $1980 threshold. Should this bullish momentum persist, we anticipate the precious metal to challenge the immediate resistance at $2,026 in the upcoming sessions. Investors and traders alike should keep a watchful eye on these critical levels and indicators, as they navigate the gilded paths of the gold market.

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Daily Price Outlook

The global market sentiment has continued to rise and remained strong throughout the day. This can be witnessed by the fact that the wall Street experienced a significant rally on Friday, largely driven by investor optimism about a potential resolution to the Federal Reserve's interest rate hikes. Notably, the S&P 500 index surged by 1.8%, marking a 4.8% increase for the week. Therefore, thiis performance represents its strongest weekly showing in nearly a year.

In the meantime, Dow Jones Industrial Average and Nasdaq Composite also posted significant gains. However, this positive momentum was driven by the Federal Reserve's decision to maintain interest rates at their current levels, along with Chair Jerome Powell's comments suggesting a pause in rate hikes. Notably, the CME Group's FedWatch tool indicated an 83% probability that the Fed would indeed keep rates unchanged in December.

Positive Economic Data and Its Impact on Market Sentiment

It is important to note that the current ongoing rally was influenced by the recent positive economic data. Non-farm productivity growth in the third quarter reached a peak of 4.7%, marking the best performance since 2020. However, this uptick is attributed to a 5.9% increase in output and a 1.1% rise in hours worked. The surge in productivity has contributed to reducing unit labor costs, a key indicator for core inflation trends.

As a result, the Federal Reserve is likely to be reassured by this third-quarter decline and may choose to stay on the sidelines, maintaining current policies. The upcoming payrolls report is crucial because an extreme result could affect market sentiment, potentially causing concerns about a recession.

Economists anticipate about 180,000 new jobs, but data indicates a more robust job market with around 200,000 new jobs. Therefore, the focus should be on the Federal Reserve's reaction, and it's improbable they will alter their current position unless there's a substantial surge in inflation or a significant economic downturn. This represents a change in the Fed's impact on the market, which marks a departure from the past.

Therefore, this positive economic news is expected to strengthen the S&P 500 index, supporting its upward trajectory by signaling potential stability in interest rates and core inflation, which, in turn, bolsters investor confidence.

S&P500 (SPX) - Technical Analysis

The S&P 500 index has exhibited a bullish momentum in recent trading sessions, closing at 4317.79, marking a 1.89% increase over the past 24 hours. The index has been hovering around the pivot point of $4,218, with immediate resistance at $4,317. If this upward trend continues, the next resistance levels to watch are $4,373 and $4,427. On the flip side, should a reversal occur, immediate support lies at $4,062, with subsequent levels at $4,005 and $3,907.

From a technical perspective, the Relative Strength Index (RSI) stands at 63, which indicates a slightly bullish sentiment without venturing into overbought territory. This suggests that there might be more room for the index to climb before encountering significant selling pressure.

The 50-Day Exponential Moving Average (EMA) also points to bullish signals, with the current value at $4,269. The index trading above its 50 EMA is indicative of a short-term bullish trend, reinforcing the current upward trajectory.

Chart patterns further fortify the bullish sentiment, with a discernible upward channel forming over the past several weeks. This pattern, coupled with consistent bullish candlesticks, signals that the index is poised for continued growth. The absence of bearish reversal patterns in recent candlestick formations supports this projection.

In conclusion, the overall trend for the S&P 500 is bullish, especially if it sustains above the critical level of $4,280. The confluence of technical indicators, chart patterns, and moving averages suggests that the index is likely to test higher resistance levels in the short term. Investors should keep an eye on the aforementioned support and resistance levels for potential entry and exit points.

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During early European trading on Thursday, the AUD/USD currency pair maintained its upward momentum, remaining strongly above the 0.6400 level. However, this upward trend was fueled by the US Federal Reserve's (FOMC) decision to maintain a stable course, combined with a mix of reports concerning the US economy. This exerted downward pressure on the US dollar and contributed to the losses in the AUD/USD pair. The US Dollar Index (DXY) faced some selling pressure around 106.67, following a retreat from its weekly high of 107.11. Moreover, yields on US Treasury bonds experienced a minor decrease, with the 10-year yield hovering at 4.73%. This decline in yields may have played a role in the weakening of the US dollar.

U.S. Economic Update: FOMC Holds Rates, Mixed Data on Job Market and Manufacturing Sector

It is important to mention that the Federal Open Market Committee (FOMC) chose to maintain unchanged interest rates and uphold a cautious stance on the economy. The FOMC believes that tighter financial conditions could have an impact on the labor market and overall economic activity.

They also noted that recent increases in long-term bond rates have lessened the need for further monetary policy tightening. Currently, the market is only assigning a 22% probability of a rate hike in December, as indicated by the CME FedWatch Tool.

In terms of economic data, the ADP Private Sector Payrolls report for October revealed an increase of 113,000 jobs, which fell short of the anticipated 150,000. On a positive note, the JOLTS job openings data unexpectedly rose to 9.553 million, indicating an increase in job opportunities. However, the ISM Manufacturing PMI for October dipped to 46.7, missing the expected value of 49, and marking the lowest reading since July.

Australian Economic Outlook: RBA Rate Hike Expected with IMF Support

Furthermore, the Reserve Bank of Australia (RBA) is scheduled to announce its decision at the upcoming November meeting. There is an anticipation in the market that the central bank may raise the interest rate by 25 basis points (bps) due to the increasing inflation.

Moreover, the International Monetary Fund (IMF) recently assessed the Australian economy and found it to be robust. They noted that inflation is staying relatively high and suggested that the RBA needs to implement more policy measures to control it. In simpler terms, they believe the RBA should continue tightening policies to keep the economy on track.

AUD/USD - Technical Analysis

The Australian Dollar, colloquially known as the "Aussie," has displayed intriguing movements against its American counterpart in recent days. As of the last measurement, the AUD/USD pair stands at 0.64251. A scrutiny of its 24-hour movement paints a picture of mild volatility, with the currency pair navigating the intricate labyrinth of global macroeconomic forces and central bank decisions.

Analyzing the 4-hour chart lends a deeper insight into the currency's short-term price trajectory. The pivot point for the currency pair is currently situated at 0.63824. On the bullish front, traders should keep an eye on the immediate resistance level of 0.64411, followed by the subsequent resistances at 0.64729 and the more ambitious 0.65109. Conversely, on the bearish spectrum, the immediate support is discerned at 0.63400, with subsequent floors established at 0.62889.

The technical indicators weave an intricate tale. The Relative Strength Index (RSI), a key momentum oscillator, stands at 54.65. Traditionally, an RSI reading above 70 is perceived as overbought territory, while anything below 30 suggests oversold conditions. Given that the current RSI value is just above the neutral 50 threshold, the sentiment leans slightly bullish for the AUD/USD pair. Additionally, the 50-Day Exponential Moving Average (EMA) stands at 0.63547. With the price currently situated above this level, it suggests a short-term bullish trend.

The chart has manifested what seems to be an ascending channel pattern. This pattern typically points to a bullish sentiment, and in this context, indicates the AUD/USD pair's consistent higher lows and higher highs.

In summation, the short-term technical landscape for the AUD/USD is cautiously bullish. Given the present technical setup and the currency's positioning above the 50 EMA, there's a possibility for the AUD/USD to test the immediate resistance of 0.64411 soon. As always, forex traders are advised to stay vigilant and monitor global economic cues that could influence currency movements.

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The USD/JPY currency pair extended its downward trend and continued to lose traction, drifting lower for the second consecutive day on Thursday. However, the reason for its selling pressure can be attributed to a weaker US dollar, which was being pressured by the expectation that the Fed has stopped raising rates. Meanwhile, the declining US bond yields was seen as another key factor that has exerting downward pressure on the Greenback.

US Dollar Weakening Due to Fed's Rate Outlook and Jerome Powell's Comments

It's important to highlight that the US Dollar is weakening due to the belief that the Federal Reserve (Fed) is nearing the end of its strategy to raise interest rates. This situation is causing a decline in the USD/JPY pair. As we mentioned earlier, the Fed recently opted to maintain the current interest rates for the second consecutive time. Nonetheless, they haven't dismissed the potential for future rate hikes due to the better-than-anticipated performance of the US economy.

However, the Chair of the Fed, Jerome Powell, stated in a press conference following the meeting that the recent surge in borrowing costs influenced by the market could potentially harm the economy. He also mentioned that financial conditions are already quite tight, indicating that they may not require further rate hikes and could even consider lowering them by June of next year.

Consequently, the anticipation of fewer future rate increases from the Fed is leading to a decrease in US Treasury bond yields, which, in turn, is weakening the US dollar and contributing to the losses in USD/JPY pair.

Japanese Authorities and the Bank of Japan's Approach Impacting USD/JPY Pair

Moreover, there are concerns that Japanese authorities may intervene in the foreign exchange market to manage their currency's strength as they aim to prevent it from weakening excessively. This adds to the downward pressure on the USD/JPY pair. However, the Bank of Japan (BoJ) maintains a more lenient stance, which might assist in mitigating the losses.

USD/JPY - Technical Analysis

The USD/JPY is currently navigating around the 150.445 mark, reflecting a modest 24-hour shift of +0.01%. Within the 4-hour chart, the pivot point stands at $150.262. On the resistance spectrum, the closest barrier is $151.062, with subsequent ones at $151.500 and $151.741. In contrast, supports are seen at $150.258, $149.903, and $149.444.

Technical indicators offer intriguing insights. The RSI, at 49.08, hints at a slight bearish tilt but is close enough to the 50 mark to suggest potential shifts in momentum. The 50-Day EMA sits at $150.262, with the price around it indicating a neutral market stance. Chart patterns, especially the emerging symmetrical triangle, signal a tussle between the bulls and bears. The triangle's upper boundary is set to be a focal point in upcoming sessions.

Conclusively, the USD/JPY's current trend leans towards neutrality with a mild bullish undertone. Immediate challenges lie in approaching the resistance at $151.062. Still, the existing support levels play a crucial role in defining the asset's trajectory amidst global economic influences.

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Gold (XAU/USD) continued its upward trajectory on Thursday, driven by the decrease in US bond yields and the weakening of the US dollar. However, these developments were fueled by the market's expectations that the Federal Reserve might pause its interest rate hikes, consequently bolstering the demand for gold. Furthermore, this positive movement was further bolstered by geopolitical tensions and apprehensions regarding China's economic situation.

Gold Market Trends in Light of Geopolitical Conflicts and Economic Challenges

Furthermore, the ongoing Israel-Hamas conflict and economic challenges in China are expected to further bolster the value of safe-haven gold. However, the generally positive sentiment in the risk markets is working against gold but it has managed to maintain its position above a one-week low, hovering around the $1,970-1,969 range that it reached the previous day.

The Federal Reserve's Monetary Policy Impact on Gold and Financial Markets

In addition to this, the Federal Reserve has chosen to maintain unchanged interest rates for the second consecutive time. They have indicated that current financial conditions may already be sufficiently tight to manage inflation. Consequently, the market is now expecting rate cuts to commence in June 2024, which has led to a further decline in US Treasury bond yields and a weakening of the US Dollar.

The yield on the two-year US government bonds has reached its lowest level since September 8, while the 10-year Treasury yield has stepped back from the 5% threshold. Additionally, the Federal Reserve has upgraded its outlook on economic activity, acknowledging the unexpected resilience of the US economy, all the while keeping the possibility of another rate hike on the table.

Therefore, the Federal Reserve's choice to maintain unchanged interest rates and foresee rate cuts in 2024 has resulted in reduced US Treasury bond yields, a weakening of the US Dollar, and a boost in support for gold as a safe-haven asset.

Developments in the Israel-Hamas Conflict and Market Focus on Upcoming US NFP Report

Furthermore, Gaza's largest refugee camp has experienced powerful explosions, which the Israeli military claims killed a Hamas commander connected to the October 7 attacks. In response, Bolivia has severed its diplomatic ties with Israel due to civilian casualties resulting from what it perceives as aggressive and disproportionate military actions in Gaza. Israel's Prime Minister has rejected calls for a ceasefire, stating that they would amount to surrendering to terrorism.

Moving on, the market's attention now turns to the upcoming US monthly employment report (NFP) scheduled for Friday, which is expected to provide significant guidance for the precious metal.

GOLD (XAU/USD) - Technical Analysis

The fervor surrounding precious metals, especially gold, has been palpable in recent months. The Gold Spot's current price hovers at $1,986.14, a modest uptick observed over the past 24 hours. In the grand tableau of traded assets, Gold's market capitalization remains robust, ensuring its steadfast position among the elite. Delving deeper into its supply data provides an insight into the nuances of market dynamics that influence this asset.

Examining the 4-hour chart offers a granular view of Gold's recent price actions. Key price levels to monitor closely in the coming days include a pivot point at $1,975.85. The immediate resistance stands at $1,991.36, with subsequent resistances at $2,010.36 and $2,031.29, respectively. On the flip side, if bears take control, the immediate support is pinned at $1,963.17, followed by stronger supports at $1,947.14 and a tentative one around $1,930.00.

The narrative of technical indicators paints an intricate picture. The Relative Strength Index (RSI) clocks in at 49.13. Traditionally, an RSI above 70 signals overbought conditions, and anything below 30 is indicative of an oversold territory. Our current value, hovering just below the 50-mark, subtly hints at a bearish sentiment. However, the proximity to the midline warrants caution. Another pivotal indicator, the 50-Day Exponential Moving Average (EMA), stands at $1,978.343. The Gold price positioned above this mark signifies a short-term bullish inclination.

An eagle-eyed observation reveals an ascending channel pattern on the chart. This suggests that the Gold price has been primarily moving within this upward trajectory. The recent brush with the channel's lower boundary and the subsequent resilience hints at a potential bullish drive in the offing.

In conclusion, the overall trend for Gold, at least in the short term, leans bullish. Given the present momentum coupled with corroborative technical indicators, expectations are rife for Gold to challenge the resistance at $2,010.36 soon. Should it breach this, the $2,031.29 mark might be the next focal point. As always, traders should remain on their toes, keeping an ear to the ground for any macroeconomic or geopolitical developments that could jolt the gold markets.

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Daily Price Outlook

The price of gold (XAU/USD) persists in its decline, marking the third successive day of a downtrend on Wednesday. As the European trading session commences, the precious metal exhibits a bearish posture, hovering around the weekly low in the vicinity of the $1,978 mark. The de-escalation of tensions over the Israel-Hamas conflict, along with the market's anticipation of a more hawkish stance from the Federal Reserve (Fed), are key factors exerting downward pressure on gold, which does not yield any interest.

Despite the downward trend, the decline in gold prices is expected to have a floor. The market's attention is keenly set on the outcome of the much-awaited two-day FOMC monetary policy meeting, which is due to be announced in the later part of the US session. Additionally, the concerns regarding China's fragile economic recovery as the fourth quarter commences might lend some support to the safe-haven metal, potentially curbing steeper drops.

Factors Propelling the US Dollar and Their Effect on Gold Prices

Currently, the US dollar is enjoying a positive sentiment, bolstered by the market's anticipation of a potentially hawkish outcome from the FOMC meeting. The Federal Reserve is anticipated to keep interest rates at a 22-year peak for the second consecutive period, later in the US session.

Given the robust performance of the US economy and ongoing inflation, the central bank is expected to continue its hawkish stance, leaving the door open for additional interest rate hikes. The yield on the crucial 10-year US government bond hovers near the 5% threshold, a high not witnessed in 16 years since October. This strength in bond yields is further fortifying the US dollar, which in turn, is applying downward pressure on gold prices.

Recent Developments and Their Impact on the Gold Market

Furthermore, a recent Caixin-sponsored survey revealed a contraction in China's manufacturing sector business activity in October, the first decline in three months. This suggests that China's stimulus measures have had limited impact on the economic recovery, which might provide some support to the XAU/USD.

Although gold recorded its most substantial monthly gain since November 2022, it commenced the new month on a softer note, influenced by a diminished demand for safe-haven assets. The market's concerns about the Israel-Hamas conflict have abated, as no other Arab nations have engaged in the conflict, and there is an indication from Hamas about the intention to release foreign hostages in the forthcoming days.

GOLD (XAU/USD) - Technical Analysis

Gold has experienced a minor pullback in its recent rally, currently trading at $1,977.935, a slight decline of 0.31% within the last 24 hours. The asset's performance on the 4-hour chart reveals a critical juncture, with the price teetering near the pivot point of $1,990.

Key technical levels are in focus, with immediate resistance spotted at $2,026. A breach above this level could see gold target subsequent resistances at $2,046 and $2,082. Conversely, immediate support lies at $1,970, below which further supports are seen at $1,934 and $1,914.

The Relative Strength Index (RSI) presents a neutral stance with a reading of 57, indicative of neither overbought nor oversold conditions, but slightly leaning towards bullish sentiment. However, with the RSI drifting below the 60 mark, it warrants cautious optimism among bulls.

The 50-Day Exponential Moving Average (EMA) at $1,977 offers a glimmer of bullishness, with the current price hovering just above this level, suggesting a short-term upward trend.

A notable development is the upward channel breakout observed in the chart patterns, hinting at potential bullish momentum. However, the recent price action below the pivot point and the RSI's tepid posture offer a mixed sentiment.

In conclusion, gold presents a nuanced technical outlook. While the asset shows bearishness below the $1,980 threshold, a decisive move above this level could alter the short-term trajectory. Investors should brace for a potential test of the immediate resistance at $2,026 in the coming days, with a close eye on the RSI and the 50 EMA for further trend confirmation.

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Daily Price Outlook

In the early hours of the European trading session on Wednesday, the GBP/USD pair sustained its decline, presently hovering around 1.2139, a slight drop of 0.11% for the day. Market participants are keeping a watchful eye on two pivotal events this week: the Federal Open Market Committee (FOMC) meeting on Wednesday and the Bank of England (BoE) meeting on Thursday. These gatherings are expected to inject volatility into the market.

It is anticipated that the FOMC will maintain interest rates while adopting a hawkish tone. Conversely, the BoE is likely to keep rates stable amidst looming recession fears in the UK. Both events are garnering attention in anticipation of the US Nonfarm Payrolls data release.

The two-day FOMC policy meeting commences on Wednesday, with prevailing market sentiment predicting that interest rates will remain unchanged in November. The market will pay close attention to the press conference headed by FOMC Chair Powell for any fresh insights. A hawkish stance during the conference could bolster the US Dollar, potentially exerting downward pressure on the GBP/USD pair.

In addition, the Bank of England (BoE) is expected to hold interest rates at 5.25% during its Thursday meeting, primarily due to concerns about a potential economic slump in the UK. Post-meeting, BoE Governor Andrew Bailey will provide updates on the UK's economic outlook and monetary policy direction.

At the same time, the GBP/USD pair faces headwinds from weaker UK economic data and persistent inflation. Moreover, escalating geopolitical tensions in the Middle East might drive investors towards safe-haven assets, favoring the US Dollar and impacting the GBP/USD pair.

In the coming week, investors will be vigilant about key economic indicators leading up to the FOMC meeting on Wednesday, including the US ADP employment report, JOLTS Job Openings, and the ISM Manufacturing PMI. Attention will shift to the BoE's rate decision and Governor Bailey's address on Thursday. The week concludes with the release of vital US employment figures for October, including Nonfarm Payrolls and Average Hourly Earnings, on Friday.

GBP/USD - Technical Analysis

The GBP/USD currency pair, often viewed as a barometer of transatlantic economic health, has exhibited mild bearish behavior on November 1, trading at 1.2142, a slight decrease of 0.05%. This subtle dip might seem inconsequential at a glance, but in the highly leveraged world of forex trading, even minor shifts can portend significant market moves. Analyzing the four-hour chart provides a clearer picture of the pair's technical posture.

At the heart of this analysis is the pivot point, situated at 1.2173, serving as a fulcrum for potential price swings. Should the bulls gain the upper hand, immediate resistance looms at 1.2315, with further hurdles at 1.2471 and 1.2613. On the flip side, if bearish sentiment solidifies, the pair may seek refuge at immediate support levels of 1.2008, with additional fallback positions at 1.1875 and 1.1710.

The Relative Strength Index (RSI), a momentum oscillator, registers a value of 48, hovering just below the neutral midpoint of 50. This suggests a bearish tilt in market sentiment, albeit not strong enough to warrant immediate alarm for oversold conditions. Complementing the RSI, the 50-Day Exponential Moving Average (EMA) stands at $1.2149, a whisker above the current price, hinting at a nascent bearish trend.

Chart patterns have yet to articulate a clear narrative for the GBP/USD pair. However, the constellation of technical indicators and price levels paints a picture of cautious bearishness, contingent on the pair's behavior around the $1.2149 threshold. Should the pair maintain its stance below this critical level, the bearish outlook is expected to solidify.

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Despite the sluggish performance of the US dollar, the EUR/USD currency pair failed to halt its losing streak and remained under pressure, trading around the 1.0558 level, reflecting a 0.17% loss for the day. However, the ongoing decline in this currency pair can be attributed to recent official data published by Eurostat, indicating a sharp deceleration in the Eurozone Harmonised Index of Consumer Prices (HICP) on Tuesday.

Furthermore, the expectations that the European Central Bank (ECB) won't further increase interest rates have significantly influenced the downward pressure on the EUR/USD pair. Moreover, concerns about looming recession risks continue to weaken the shared currency.

Eurozone Consumer Price Growth Slows, ECB Rate Hike Expectations Diminish

According to the latest Eurostat data released on Tuesday, the Eurozone's consumer price growth, as measured by the Harmonised Index of Consumer Prices (HICP), slowed significantly from 4.3% to 2.9% annually in October. This deceleration represents the lowest increase in prices since July 2021, further solidifying market beliefs that the European Central Bank (ECB) is unlikely to raise interest rates. Moreover, concerns about a potential recession may continue to exert pressure on the shared currency, potentially creating hurdles for the EUR/USD pair.

US Dollar Pauses as FOMC Meeting Looms

On the flip side, the US Dollar has paused its robust upward movement, as traders adopt a wait-and-see approach pending the outcome of the pivotal FOMC meeting before making new market moves. The Federal Reserve (Fed) is anticipated to maintain current interest rates for the second time, potentially leaving open the possibility for a hike later this year.

Therefore, the expectations for a more hawkish stance from the Fed are bolstering higher US bond yields, consequently lending strength to the dollar contributes to the EUR/USD pair losses.

Key Events Ahead for Traders and the EUR/USD Pair

Looking ahead, traders are closely monitoring key events such as the ADP private-sector employment report, the ISM Manufacturing PMI, and JOLTS Job Openings data in the US. These factors will influence the demand for the safe-haven US Dollar.

EUR/USD - Technical Analysis

The pivot point, a critical juncture in technical analysis, is pegged at 1.0595. Should bullish sentiment prevail, immediate resistance lies at 1.0667, followed by subsequent barricades at 1.0768 and 1.0840. Conversely, if bearish undercurrents dominate, the currency pair might seek solace at immediate support levels of 1.0492, with further cushions at 1.0422 and 1.0321.

Delving deeper into technical indicators, the Relative Strength Index (RSI) stands at 46. This sub-50 reading indicates a bearish sentiment among traders, albeit not entrenched deeply into oversold territory. The 50-Day Exponential Moving Average (EMA) further corroborates this stance, with the pair trading slightly below the EMA value of 1.0582, suggesting a short-term bearish trend.

Chart patterns are yet to pronounce a definitive direction, with the currency pair's trajectory poised delicately at crucial junctures. However, the overall trend tilts towards the bearish side, contingent on the pair's movements relative to the 1.0582 mark. Short-term forecasts remain cautious, with a likelihood of the EUR/USD pair testing key resistance and support levels in the days ahead.

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Despite the positive Australian Retail Sales data, the AUD/USD currency pair ended a three-day winning streak on Tuesday. However, this reversal can be attributed to the resurgence of the US Dollar, which is exerting downward pressure on the AUD/USD pair. Additionally, the Reserve Bank of Australia (RBA) is scheduled to announce its policy decision on November 7. It is widely expected that Australia's central bank will increase interest rates by 25 basis points in the upcoming meeting due to heightened inflation.

Australian Economic Indicators and Impact on AUD/USD Pair

It's worth noting that Australia's Retail Sales showed remarkable performance in September, with a notable increase of 0.9%. This figure surpassed market expectations of 0.3% and marked a substantial improvement compared to the previous month's 0.2% performance.

Looking at Australia's Producer Price Index (PPI), it showed a slight decrease, dropping to 3.8% yearly in the third quarter, compared to the previous quarter's 3.9%. However, on a quarterly basis, the PPI had a remarkable increase, reaching 1.8%, up from the earlier reading of 0.5%.

In the meantime, the Australian Consumer Price Index (CPI) for the third quarter of 2023 reached 1.2%, surpassing both the 0.8% increase in the previous quarter and the market's expected 1.1% for the same period.

Thereby, the Reserve Bank of Australia expressed concerns about inflation due to supply disruptions. Governor Michele Bullock stated that if inflation remains higher than expected, the RBA will take suitable measures.

Hence, the positive retail sales and increased inflation in Australia might strengthen the Australian dollar (AUD), while concerns about inflation and reduced demand could potentially weaken the AUD/USD pair.

Global Economic Developments and Their Impact on AUD/USD Pair

Furthermore, China's NBS Manufacturing Purchasing Managers' Index (PMI) unexpectedly dropped to 49.5 from the previous expansion of 50.2 in July, missing the expected 50.2. The NBS Services PMI also fell to 50.6 in September, lower than the anticipated 51.8 and the earlier reading of 51.7.

There are reports indicating a possible meeting between US President Joe Biden and China's President Xi Jinping in November, following extensive diplomatic efforts aimed at repairing relations.

Meanwhile, US Core Personal Consumption Expenditures Price Index (YoY) slightly decreased to 3.7% from 3.8%. However, the monthly index rose to 0.3%, meeting expectations and up from the previous 0.1%. The University of Michigan Consumer Index exceeded expectations in October, reaching 63.8 against an expected 63.0.

Hence, the negative economic data from China and the potential US-China meeting in November may put downward pressure on the AUD/USD pair.

AUD/USD - Technical Analysis

The AUD/USD currency pair, as of October 31, is witnessing some turbulence, currently trading at 0.63438, a dip of 0.50% within the past 24 hours. In the intricate realm of forex, the asset's key price metrics provide a clearer understanding of its potential trajectory. Specifically, the pivot point for this pair stands firmly at $0.6334. Should the momentum lean bullish, the immediate resistance is seen at $0.6399, with further ceilings expected at $0.6465 and $0.6529. Conversely, if bears dominate, the immediate floor lies at $0.6270, with deeper supports at $0.6206 and $0.6140.

From a technical standpoint, the Relative Strength Index (RSI), a popular momentum oscillator, rests at 49. This figure, just a notch below the neutral 50 threshold, hints at a mild bearish sentiment. Meanwhile, the Moving Average Convergence Divergence (MACD), another revered momentum tracker, paints a somewhat concerning picture. The MACD line trails slightly below its signal line, signaling potential downward momentum on the horizon.

Not to be overlooked, the 50-Day Exponential Moving Average (EMA), which smoothens price data to create a single flowing line, is currently valued at $0.6343. This is nearly identical to the asset's current price, suggesting a neutral stance in the short-term trend. As of now, no distinct chart pattern has emerged, leaving traders and analysts to rely primarily on the aforementioned indicators.

In wrapping up this technical analysis, the AUD/USD showcases a neutral to mildly bearish trend. However, optimism remains. If the currency pair can hold its ground above the crucial pivot of $0.63335, it might tilt the scales towards bullishness. In the days ahead, given the asset's current position amidst its resistance and support zones, it's plausible to anticipate the AUD/USD making a move to test the resistance level at $0.6399. As always, investors are advised to keep their eyes peeled on these instrumental levels and indicators to navigate

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Daily Price Outlook

During the Asian trading session, the price of gold (XAU/USD) has experienced a second consecutive day of decline, staying below the $2,000 mark. This drop is primarily associated with speculation regarding the Federal Reserve's (Fed) potential decision to raise interest rates later this year to manage inflation and bring it back to the targeted 2%. The Fed's hints at possible rate hikes have caused a rise in yields on US Treasury bonds. Typically, higher bond yields tend to attract more investors to the US Dollar (USD), leading to an increased demand for it. Consequently, this heightened demand for the dollar puts pressure on gold.

It's worth noting that investors are hesitant to make strong predictions and are waiting for cues from the Federal Reserve’s upcoming monetary policy decisions. The Fed is expected to maintain the current high interest rates during their two-day meeting from October 31 to November 1.

In the meantime, the US economy is strong, and inflation remains above the Fed's target of 2%, allowing them to stick with their current tough stance. Fed Chair Jerome Powell previously cautioned that inflation is still too high, indicating that more rate hikes might happen if the economy continues to stay hotter than expected.

Factors Supporting Gold Price Amid Middle East and China Concerns

In addition to this, Israel's more cautious approach to its operations in Gaza has reduced concerns about a bigger crisis in the Middle East. This has made investors less eager to turn to the safe-haven of gold. However, it's important to note that there's still a risk of the Israel-Hamas conflict escalating further, and there's uncertainty about China's economic recovery. Hence, these factors are providing support to the XAU/USD.

Upcoming FOMC Meeting Adds Uncertainty for Traders

Looking ahead, traders might adopt a wait-and-see approach before making substantial decisions due to the scheduled two-day meeting of the Federal Open Market Committee (FOMC) starting this Tuesday. Nevertheless, the Fed is set to disclose its decision on Wednesday, and it is widely anticipated to maintain interest rates within the range of 5.25% to 5.50%. This would mark the highest level in 22 years.

Investors are awaiting the Federal Reserve's statements regarding its future interest rate policies, as this will significantly impact the value of the US dollar and potentially provide a new direction for gold. As a result, many investors are refraining from making significant moves until after this news is released.

GOLD (XAU/USD) - Technical Analysis

Gold, trading at $1,992.705, saw a marginal decline of 0.18% in the last 24 hours. Despite fluctuations, its global demand and value in the precious metals realm remain steadfast.

Examining the technicals, the pivot point is at $1,990. Key resistance levels are set at $2,025, $2,045, and $2,082. Conversely, immediate support stands at $1,970, with further support at $1,934 and $1,914.

The Relative Strength Index (RSI) reads 54, hinting at a slightly bullish sentiment. It suggests a recent tilt towards buying. However, the Moving Average Convergence Divergence (MACD) tells a cautionary tale. Its line, being below the signal line, implies potential bearish momentum ahead.

The 50-Day Exponential Moving Average (EMA) is noted at $1,974. Gold's price above this level denotes a short-term bullish trajectory, revealing active buyers in the market.

On the chart patterns front, a symmetrical triangle is observed. This indicates gold's ongoing consolidation. A breakout above this pattern signals bullish momentum, while a downward move could suggest a bearish shift.

To conclude, gold remains bullish above $2,040 but could swing bearish beneath. With current indicators and patterns, gold might challenge the $2,045 resistance soon. It's crucial for investors to monitor these key metrics closely.

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