Daily Price Outlook

During the European session on Friday, the EUR/USD currency pair continued its bearish trend, shedding further ground and trading around 1.0575. It retreated from its one-week high of approximately 1.0615, which it had reached the day before. This decline can be attributed to the increased demand for the US Dollar (USD), as buyers flocked to it, putting pressure on the Euro.

However, the downward trend in EUR/USD can be attributed to several key factors, primarily the possibility of an additional interest rate hike by the U.S. Federal Reserve in 2023, coupled with the relatively high yields on U.S. bonds. These elements are bolstering the appeal of the US Dollar (USD). Furthermore, escalating geopolitical tensions are reinforcing the Greenback's status as a safer choice for investors, thereby exerting pressure on the Euro.

Powell's Inflation Stance and High Bond Yields Bolstering USD

It's worth noting that Federal Reserve (Fed) Chair Jerome Powell stated on Thursday that inflation still remains too high. He also emphasized that monetary policy hasn't become excessively restrictive yet. This reaffirms our expectations of another interest rate hike by the end of this year. Consequently, the yield on the 10-year US government bond remains elevated, nearing a 16-year peak and approaching the significant 5% threshold. This robust yield continues to bolster the US Dollar (USD). Furthermore, there is cautious mood in the market, favoring the safe-haven US Dollar and putting pressure on the EUR/USD pair.

Geopolitical Concerns and Safe-Haven USD Amid Israel-Hamas Conflict

Moreover, the ongoing concerns about the Israel-Hamas conflict potentially spreading across the broader Middle East are making the entire market nervous. Meanwhile, the recent reports of a Gaza hospital tragedy with hundreds of Palestinian casualties have intensified these worries.

On top of that, there is increasing concern about economic challenges caused by rapidly rising borrowing costs. All of this is making investors less willing to take risks, which is noticeable in the generally weaker mood in the stock markets. As a result, more people are shifting their investments towards traditional safe-haven assets, including the US Dollar.

ECB's Rate Hike Pause and Stagflation Concerns Impacting EUR/USD

Furthermore, financial markets are factoring in the possibility that the European Central Bank (ECB) may refrain from further interest rate hikes. This caution arises from concerns about the potential for a more pronounced economic downturn and the looming risk of stagflation, a scenario in which the economy remains stagnant while inflation remains high. The ECB hinted in September that their recent interest rate increase, marking the 10th hike in 14 months to combat inflation, could be the final one.

Moreover, ECB policymakers appeared cautiously optimistic last week, expressing the belief that inflation would gradually return to the 2% target without necessitating further rate hikes. This outlook suggests that the EUR/USD pair is more inclined to continue its downward trend.

EUR/USD - Technical Analysis

The EUR/USD currency pair, an instrumental barometer in the foreign exchange market, starts the trading session at 1.05748, witnessing an almost imperceptible decline of -0.04%. Its intrinsic price dynamics are underscored by a pivot point established at $1.0561. Those bullish on the currency pair should monitor the immediate resistance level at $1.0601, followed by $1.0638 and capped at $1.0672. Conversely, potential downside pressures could encounter supports placed at $1.0524, further down at $1.0491, and culminating at the $1.0450 mark.

Delving into the realm of technical indicators, the Relative Strength Index (RSI) is hovering at 54. Typically, any value above 50 leans towards a bullish sentiment, while a figure below this level hints at bearish undertones. The current reading suggests that traders are slightly leaning towards optimism in the near term. On the momentum front, the Moving Average Convergence Divergence (MACD) line stands slightly below its signal counterpart. This configuration intimates a potential bearish trend on the immediate horizon, urging caution. To further season our analysis, the 50-Day Exponential Moving Average (50 EMA) is poised exactly at $1.0561. With the EUR/USD trading marginally above this figure, it is emblematic of a tepid bullish inclination.

Chart patterns, often the cartographers of market trajectories, are currently inconclusive, pending the emergence of any distinct formations.

In summation, the EUR/USD shows a potential bullish disposition if it remains buoyed above the $1.05617 level. Conversely, breaking below could steer the currency pair into bearish territories. In the short run, our projection is to witness the EUR/USD flirt with the immediate resistance level of $1.0601. Any breach of this threshold might usher in further appreciations.

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Daily Price Outlook

Gold prices (XAU/USD) prolonged its winning streak and surged to a near three-month high on Friday. However, the reason for its upward rally can be attributed to concerns surrounding geopolitical tensions in the Middle East, which have heightened the safe-haven demand for gold and contributed to its gains. Furthermore, the growing expectation that the Federal Reserve (Fed) will maintain interest rates at their current levels for the second consecutive time in November is seen as another factor driving the non-yielding yellow metal higher for the fourth consecutive day.

Geopolitical Factors Driving Gold Price Surge

As previously mentioned, the price of gold has been steadily rising, reaching a nearly three-month high last Friday. However, this upward trend is primarily attributed to geopolitical risks, which are prompting investors to seek safe-haven assets, with gold being a preferred choice. Specifically, the concerns about the potential spillover of the Israel-Hamas conflict into other Middle Eastern countries and its potential impact on the global economy are key factors supporting the increase in gold prices.

It's important to highlight that Israeli airstrikes in the Gaza Strip have escalated tensions in the region. In addition, Israel has launched missile strikes in Lebanon and Syria, and Egypt has been impacted by the conflict due to the bombing of the Rafah border crossing. These ongoing developments are maintaining the demand for gold as a safe-haven investment.

Impact of Federal Reserve and US Treasury Bond Yields on Gold Prices

Moreover, the increasing consensus that the Federal Reserve (Fed) will keep interest rates at their current levels for the second consecutive time in November is considered another factor driving the non-yielding gold higher for the fourth consecutive day. Federal Reserve Chairman Jerome Powell has suggested that, considering the economy's resilience and the tight labor market, the possibility of additional interest rate hikes is under consideration.

Nevertheless, the benchmark 10-year US Treasury bond yield reached a new high not seen in 16 years on Thursday, which boosted the US Dollar and garnered buying interest on Friday. The confluence of these heightened US bond yields, slight USD strength, and overbought conditions on hourly charts may potentially curtail further gains for XAU/USD.

GOLD (XAU/USD) - Technical Analysis

In the ever-evolving world of commodities, GOLD begins the day priced at $1976.450, experiencing a marginal decline of 0.04% in the past 24 hours. The pivotal price level to observe is notably set at $1,955. Market participants should keep a close watch on an ascending scale of resistance levels: initially at $1,982, followed by $2,001 and culminating at $2,021. On the flip side, downside supports are observed at $1,930, further down to $1,909, and a significant cushion at $1,886.

Diving deeper into the technical tapestry, the Relative Strength Index (RSI) offers pivotal insights. Standing at a noteworthy 83, it signals that GOLD is currently overbought. Historically, values above 70 tend to caution investors of potential market saturation and prospective price corrections.

Concurrently, the MACD, a crucial momentum indicator, sketches a bullish narrative. This is discerned from the MACD line's ascendancy over the signal line, forecasting an upward movement in the immediate future. Adding nuance to our analysis, the 50-day Exponential Moving Average (50 EMA) rests at $1,921.

GOLD trading above this benchmark amplifies a short-term bullish inclination.

From a chartist's perspective, a symmetrical triangle formation commands attention. The recent break above this configuration foreshadows impending bullish momentum.

To encapsulate, while the overarching sentiment for GOLD remains somewhat bearish beneath the $1985 demarcation, a potential breakout above could catalyze a notable appreciation in its valuation. In the ensuing days, we project GOLD to challenge the proximate resistance at $1,982. Should it navigate past this juncture, we might brace for loftier valuations.

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Daily Price Outlook

Gold prices (XAU/USD) experienced a significant surge on Wednesday, reaching their highest level since early August, hovering around the $1,962-1,963 mark. However, this uptick was mainly driven by growing concerns about the escalating conflict in the Middle East. Although, the continued increase in US Treasury bond yields, backed by the belief that the Federal Reserve (Fed) intends to maintain higher interest rates for an extended period, restrained gold's gains.

Furthermore, the increased demand for the US Dollar encouraged some investors to secure profits as gold prices reached higher levels, leading to a minor dip. On Thursday, gold prices sustained their upward trajectory for the third consecutive day. However, the persistent geopolitical tensions in the Middle East continue to underpin the demand for gold as a safe-haven asset. However, the expectation of a more hawkish stance from the Federal Reserve, escalating US bond yields, and a stronger USD all act as limiting factors preventing gold prices from rising further.

Gold's Stability Amid Geopolitical Tensions and Anticipation of Powell's Speech

Despite a brief dip in gold prices, they managed to stabilize around the $1,938 mark. Moreover, this stability is primarily due to ongoing geopolitical tensions, which are still driving investors toward the safety of gold. As a result, Thursday marked the third consecutive day of increased demand for this precious metal. During the early part of the European trading session, gold continued to show a positive trend. However, this upward movement remained relatively modest, indicating that investors are being cautious and refraining from making significant moves. It appears that they are awaiting a speech by Federal Reserve Chair Jerome Powell before making any bold investment decisions.

Investors are awaiting Powell's insights because his words could offer valuable information about the Federal Reserve's plans. This, in turn, is expected to significantly influence the US Dollar and the XAU/USD. As a result, people are closely monitoring the situation, eager for any hints that might guide their investment decisions.

Economic Data Impact and Fed Chair Speech Expectations

On the economic front, upbeat US Retail Sales data released on Tuesday indicates a strong end to the third quarter, leading to higher estimates for Q3 GDP. However, these positive figures have also raised concerns about persistent inflation, which could encourage the Federal Reserve to maintain a hawkish stance with higher interest rates. This, in turn, contributes to a continued rise in US Treasury bond yields, supporting the US Dollar, which limits gains for XAU/USD.

Notably, the yield on the 10-year US government bond has surged to its highest level in 16 years and is approaching the notable 5% threshold. Investors are currently keeping a close eye on several key indicators to determine short-term market trends, including the US Weekly Initial Jobless Claims, Philly Fed Manufacturing Index, and Existing Home Sales data.

GOLD (XAU/USD) - Technical Analysis

Amidst the ever-changing global economic landscape, gold's positioning stands out, often acting as a barometer for financial health and geopolitical tensions. Our analysis for October 19, based on recent market dynamics and technical indicators, paints a vivid picture for the yellow metal.

Currently, gold is priced at $1948.065, experiencing a minor decrease of 0.02% in the past 24 hours. The day's pivotal point, crucial for intraday decision-making, is at $1933.6060.

On the resistance front, the immediate level stands at $1953.4850, followed by the more significant $1982.0300, and finally, a robust resistance at $2001.0250. Conversely, support levels emerge at $1908.7160, $1885.5650, and the more pronounced level of $1869.3250.

The RSI (Relative Strength Index) stands firm at 73. With values above 70 typically suggesting overbought conditions, a pullback or price consolidation might be imminent. Meanwhile, the MACD, albeit with a marginal difference, still signals a bullish trend, marked by the MACD line sitting above the signal line.

The 50 EMA (50-Day Exponential Moving Average) is noted at $1903.3190. Gold's price remains comfortably above this mark, indicating a short-term bullish sentiment. A consistent trend above the 50 EMA often suggests a positive trajectory for the asset.

In terms of chart patterns, an upward channel is evident. Although the direction is bullish, the overextended nature of the RSI signals a potential for slight correction in the near term. Such juxtaposed indicators underscore the importance of careful trading strategies.

As of now, the trend for gold seems to balance on a knife-edge, turning bearish if it dips below $1953 and bullish otherwise.

In the short term, given the current momentum and barring any significant geopolitical or economic events, gold might strive to test the resistance at $1982.0300. Yet, traders should tread with caution, considering the looming overbought scenario.

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Daily Price Outlook

The USD/JPY currency pair has maintained its upward trend and is currently hovering around the critical level of 150.00. However, traders appear cautious about taking strong positions due to investors closely monitoring Federal Reserve (Fed) Chair Jerome Powell's upcoming speech at the Economic Club of New York. Powell is scheduled to speak at 16:00 GMT, and traders are hoping to gain insights into potential changes in interest rates. Additionally, the market is keeping a close eye on the possibility of the Bank of Japan (BoJ) taking action to stabilize the Japanese Yen, which has depreciated to nearly 150.00 against the US Dollar.

Market Expectations and Economic Insights

It's important to note that investors are anticipating Jerome Powell to express support for maintaining higher interest rates over an extended period with the goal of bringing inflation closer to the 2% target. Powell's colleagues have been advocating for keeping interest rates steady within the range of 5.25-5.50%. They believe that the current higher US Treasury yields are sufficient to influence spending and investment.

Hence, the expectation of Jerome Powell supporting prolonged higher interest rates may bolster the US Dollar, potentially leading to an upswing in the USD/JPY currency pair.

During the European trading session, the broad-based US dollar maintained its upward momentum and remained bullish for the day. This trend can be attributed to several factors, including S&P 500 futures showing slight losses, which indicated a preference for lower-risk investments. US stocks declined on Wednesday as the third-quarter earnings season began. Additionally, ongoing conflicts in the Middle East have made investors more cautious about riskier assets, further boosting the US dollar.

The Japanese Yen's Weakness and Intervention Concerns

Investors are watching closely at the Japanese Yen situation if the Bank of Japan (BoJ) will address the Yen's drop to nearly 150.00 against the US Dollar. However, any intervention may not be very effective because Yen's weakness results from Japan's strategy of using low-interest rates and injecting money to stimulate the economy. This strategy tends to devalue the Yen in international markets. Even if intervention occurs, its impact may be limited, as the Yen's weakness is fundamentally linked to its economic approach.

USD/JPY - Technical Analysis

The USD/JPY, a currency pair emblematic of two of the globe's powerhouse economies, serves as more than a mere indicator of economic vitality. It's also a gauge of geopolitical strains and global risk sentiment fluctuations. At present, this significant pair is trading at 149.79, marking a slight decrease of 0.07% over the last day. The pivot point, a cornerstone of our analysis, stands at 149.49.

When casting our gaze upward, we identify resistance levels at 149.96, 150.44, and a further hurdle at 150.96. Conversely, support for the pair is found at 149.03, with subsequent cushions at 148.43 and 147.96.

From a technical standpoint, the Relative Strength Index (RSI) is positioned at 57. This places it notably above the midpoint of 50, insinuating a gentle bullish sentiment without veering into overbought territory. Meanwhile, the Moving Average Convergence Divergence (MACD) offers a slightly more cautionary tale, subtly suggesting a bearish sentiment as it lies just beneath the signal line.

Further buoyancy comes from the 50-day Exponential Moving Average (EMA) which is marked at 149.45. With the pair's price hovering above this level, it appears the winds of a short-term bullish trend are blowing.

In terms of chart patterns, we're observing a pronounced upward channel, indicating an inclination towards buying. Such a pattern typically signals robust buying momentum, and the implication here is a potential continuation of the uptrend, contingent on the respect of the channel's lower boundary.

Drawing conclusions from the assorted indicators and chart patterns, the sentiment leans bullish for as long as the pair remains above the pivotal 149.49 level. A dip beneath this could see traders donning a more conservative hat. In the short-term trajectory, the USD/JPY looks poised to possibly challenge the 150.44 resistance, buoyed by the prevailing buying sentiment.

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Daily Price Outlook

The AUD/USD currency pair was unable to sustain its recent upward momentum and is currently experiencing losses against the US Dollar (USD) following the release of mixed employment data by the Australian Bureau of Statistics on Thursday. The AUD/USD pair had been performing well for two consecutive days, but this trend shifted after a speech by Reserve Bank of Australia (RBA) Governor Michele Bullock.

Furthermore, the US Dollar Index (DXY) is rebounding from its recent losses, primarily driven by higher US Treasury yields and robust economic data from the United States. The US Dollar is also being impacted by the situation in the Gaza Strip, as escalating tensions ensued following a rocket attack on a hospital. This development is viewed as another significant factor contributing to the downward pressure on the AUD/USD pair.

Australia's Economic Challenges and the Impact on the AUD/USD Currency Pair

It's important to note that Australia's job market experienced some unexpected changes in September. The number of jobs decreased unexpectedly, which came as a surprise. However, on a positive note, the Unemployment Rate provided a pleasant surprise by dropping more than anticipated, defying initial expectations. In September, Australia's Unemployment Rate pleasantly surprised at 3.6%, surpassing the projected 3.7% and matching the previous rate of 3.7%.

Furthermore, the Australian Weekly ANZ Roy Morgan Consumer Confidence survey indicates a decline in Australians' confidence levels. The reading plummeted from 80.1 to 76.4, and this shift in sentiment is evident across various aspects of life. The minutes from the RBA's October meeting also underscore their apprehensions regarding the potential for inflation to rise. Therefore, they are taking a cautious approach to any factors that could potentially contribute to rising inflation.

Hence, the unexpected job data and worries about inflation have exerted pressure on the Australian Dollar (AUD), leading to its depreciation against the US Dollar (USD) within the AUD/USD currency pair.

Developments Impacting the US Dollar and AUD/USD Currency Pair

In addition, the US Dollar Index (DXY) is recovering from its recent downturn, largely driven by increased US Treasury yields and robust economic indicators from the United States. Meanwhile, the US Dollar is also being influenced by the situation in the Gaza Strip, with escalating tensions following a rocket attack on a hospital.

It is worth noting that the US housing market is sending mixed signals. Building Permits in September exceeded expectations, indicating a positive outlook. On the other hand, Housing Starts rebounded but slightly below market consensus, adding complexity to the picture.

In terms of economic data, Retail Sales surpassed expectations, increasing by 0.7% in September. In the meantime, Industrial Production also improved by 0.3%. Therefore, the positive data has contributed to the strengthening of the US Dollar, which may exert downward pressure on the AUD/USD currency pair.

AUD/USD - Technical Analysis

In the realm of forex trading, the AUD/USD pairing holds significant weight. A key indicator of the economic ties between two major economies, this pair is susceptible to various macroeconomic indicators and geopolitical developments. Today's forecast aims to shed light on its possible trajectory based on available technical data.

The AUD/USD stands at 0.63061, marking a decline of 0.53% in the past 24 hours. Pivot points, essential for day trading, places the pair at 0.6341. Resistance levels unfold at 0.6393, followed by 0.6433, and then 0.6467. On the flip side, immediate support lies at 0.6289, with subsequent levels at 0.6252 and 0.6215 respectively.

The RSI (Relative Strength Index) is at 37, suggesting that the pair is nearing oversold conditions. A dip below 30 might trigger potential buying interest, while its current position under 50 emphasizes bearish sentiments. The MACD line has slid below the signal line, thereby advocating for a bearish momentum in the near term.

The 50 EMA (50-Day Exponential Moving Average) is recorded at 0.6354. The pair’s current position below this mark intensifies the bearish sentiment. Generally, when price sustains below the 50 EMA, it’s an indicator of a short-term downward trend.

The pair's bearish momentum is evident, especially if it remains below the 0.63414 mark. Conversely, crossing this threshold could usher in some bullish momentum. In the immediate future, given the bearish indicators and the current global economic environment, the AUD/USD might edge towards the support at 0.6252.

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Daily Price Outlook

The EUR/USD currency pair continued its lackluster performance on Wednesday, as it witnessed a decline to approximately 1.0550 against the US Dollar. However, this dip can be attributed to the selling pressure on the Euro, which resulted in marginal losses in its value when compared to the US Dollar. Concurrently, European stocks faced a challenging day, with many of them ending in the "red," signaling losses in their values.

However, this downward movement was partially influenced by the strength of the US Dollar, as the USD Index (DXY) maintained its bullish trend in the low 106.00s.

US Dollar Holds Steady Amid Global Uncertainty and Fed Expectations

It's noteworthy that the US Dollar, as gauged by the USD Index (DXY), is holding its ground in the low 106.00s. This stability comes amid uncertain global market conditions, reflecting a prevailing sense of caution due to escalating geopolitical risks. In the meantime, investors anticipate the Federal Reserve (Fed) will maintain its current stance of keeping interest rates unchanged for the remainder of the year.

Looking ahead to the upcoming economic data, investors will keep a close eye on the weekly Mortgage Applications, as well as Housing Starts and Building Permits. These are expected to be important topics of discussion within the housing sector.

Speculation About ECB Policy Pause and Impact on EUR/USD

Moreover, there is ongoing speculation surrounding whether the European Central Bank (ECB) might decide to refrain from making adjustments to its policies. This is occurring despite inflation surpassing the bank's target, and there is a growing concern about the potential for an economic downturn or the emergence of stagflation, which is a combination of stagnation and inflation, within the European region.

On the data front, the latest inflation rate for September in the broader Eurozone revealed that the Consumer Price Index (CPI) increased by 4.3% compared to the previous year. When we exclude the costs of food and energy, which is known as Core CPI, the rate surged even higher to 4.5% on a year-over-year basis. Investors are now speculating that the European Central Bank (ECB) might delay its plans to tighten monetary policy until the third quarter of 2024.

Therefore, the speculation of the ECB pausing policy adjustments, even in the face of elevated inflation and economic worries, may potentially undermine the Euro (EUR) and influence the EUR/USD pair, potentially shifting it in favor of the US Dollar (USD).

EUR/USD - Technical Analysis

The EUR/USD, often termed the "Fiber" in trading parlance, has been a critical barometer of the U.S. and Eurozone economic strengths. As of this analysis for October 18, the pair is trading at 1.05777, marking a modest ascent of 0.17% in the last 24 hours.

Our immediate pivot point is identified at 1.0596. In terms of resistance, traders should cast their eyes on 1.0632, followed by a more challenging ceiling at 1.0672, and possibly up to 1.0713. On the flip side, supports are solidly placed at 1.0535, dipping further to 1.0496, and then a more substantial floor near 1.0454.

In the technicals, the RSI stands at 56, leaning more towards a bullish sentiment as it's above the 50 threshold, yet not in the overbought territory. The MACD provides further bullish confirmation, with its line being above the signal, hinting at potential upward momentum. Additionally, the current price comfortably sits above the 50 EMA, located at 1.0559, further endorsing the bullish narrative in the short term.

In terms of chart patterns, while none is explicitly stated, traders should remain vigilant for any emerging patterns or structures that may offer additional insights into future price direction.

For now, the trend for EUR/USD appears bullish, especially as prices maintain above the 1.0559 mark

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Daily Price Outlook

During the early European trading hours on Wednesday, gold prices (XAU/USD) extended their upward trend and remained stable around the $1,925 level. However, the reason for its upward rally can be attributed to the correction in the US Dollar. The US Dollar Index showed a slight decline, reaching 106.19. Furthermore, the escalating geopolitical tensions between Israel and Hamas were considered another significant factor contributing to the higher demand for Gold as a traditional safe-haven asset.

Strong US Retail Sales and Industrial Production Data

According to the latest report from the US Census Bureau released on Tuesday, retail sales in the US for September increased by 0.7% compared to the previous month. This performance exceeded the expectations of most experts, who had anticipated a growth of 0.3%. In the meantime, the Retail Sales Control Group, considered a crucial indicator, also saw a 0.6% increase compared to the previous month, surpassing the anticipated 0.2% growth. Hence, these figures indicate that people are spending more money, signaling a robust trend in consumer spending.

Furthermore, US Industrial Production had a strong month, showing a 0.3% increase, in contrast to the expected zero growth as forecasted by experts. Capacity Utilization, which measures the efficiency of factories, improved to 79.7%, surpassing the predicted levels. This positive development initially led to a rise in the US dollar, although the impact was short-lived.

Therefore, the strong US economic data, including increased retail sales and industrial production, led to a temporary rise in the US dollar, which in turn put pressure on gold prices.

Federal Reserve Officials Express Differing Views on Monetary Policy

It's worth noting that Thomas Barkin, President of the Richmond Fed, has emphasized that current monetary policies are already considered restrictive. He is uncertain about the decisions the US central bank will make in the upcoming November FOMC meeting, he's clear that relying solely on higher long-term bond yields is not a viable option for tightening monetary conditions.

Minneapolis Federal Reserve Bank President Neel Kashkari has joined the conversation, noting that inflation has persisted longer than initially anticipated and remains elevated. Prior to this, several Fed officials had taken a more cautious approach. Philadelphia Fed President Patrick Harker believes that raising borrowing costs and adding more economic pressure is not a wise move.

Traders will closely monitor remarks from other Fed speakers such as Waller, Williams, and Bowman on Wednesday. If they adopt a more hawkish stance, it may bolster demand for the US dollar and exert pressure on commodities like gold.

Surprising Chinese Economic Data Boosts Gold Prices

Another factor contributing to the rise in gold prices is unexpectedly positive news from China. In the third quarter, China's economy outperformed expectations with a Gross Domestic Product (GDP) growth of 1.3%, surpassing the predicted 1.0%. The annual report also revealed a 4.9% increase, exceeding the expected 4.4%.

Furthermore, China's Retail Sales displayed a more positive outlook with a 5.5% increase, surpassing both the previous 4.6% and the expected 4.9%. These promising statistics from China can make investors somewhat wary about the global economy, often leading them to invest in gold, which is regarded as a safe haven during times of uncertainty.

GOLD (XAU/USD) - Technical Analysis

Gold, the long-treasured asset and a typical hedge in times of financial uncertainty, is displaying some notable momentum as we delve into its 4-hourly technicals for October 18. As of the moment, gold is priced at $1938.51, marking an ascent of 0.79% in the past 24 hours.

The metal's immediate pivot point is set at $1932. On the upside, we're looking at a trio of resistances: $1950, $1967, and culminating at $1984. If gold were to retreat, potential supports are spotted at $1909, dropping further to $1886, and then possibly to $1869.

The RSI (Relative Strength Index) is clocking in at 72. This level, being above the standard 70 threshold, is typically interpreted as overbought conditions. However, it's essential to remember that assets can remain overbought (or oversold) for prolonged periods, especially in strongly trending markets. The MACD, another widely regarded indicator, is suggesting a bearish trend as its line is below the signal line. However, countering this bearish hint is gold's current price positioning above the 50 EMA (Exponential Moving Average) which stands at $1891, signaling a short-term bullish trend.

Chart patterns provide further insights into potential price movement, but for this analysis, no specific pattern has been mentioned. However, it's always advisable to observe for breakout or breakdown patterns, triangles, channels, or flags to make informed trading decisions.

Conclusion:

Gold's technical structure hints at a bullish inclination, especially if prices sustain above the $1932 pivot point. In the short run, traders might anticipate gold to challenge the immediate resistance levels, especially given the prevailing bullish sentiment from the price's position relative to the 50 EMA. Nevertheless, monitoring the RSI for any potential reversal signals and keeping abreast of global macroeconomic news, especially those that typically impact gold prices, will be key for those trading this precious metal.

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Despite the US Dollar's initial attempt to recover from previous losses, GBP/USD halted its decline and gained momentum, trading at approximately 1.2182 during the European session on Wednesday. However, the positive economic data from the United States initially exerted some downward pressure on the pair, but this effect proved to be short-lived. The United Kingdom's CPI for September, which surged to 6.7% year-on-year, exceeded the expected 6.5%. This unexpectedly high UK CPI figure could potentially strengthen the GBP against the USD by signaling increasing inflation and the possibility of interest rate hikes. This, in turn, would make the GBP more appealing to investors.

UK CPI Data Shows Resilient Inflation, Limited Impact on GBP/USD

According to official data from the Office for National Statistics (ONS), the United Kingdom's Consumer Price Index (CPI) remained stable with a 6.7% annual increase in September, in line with the August figure, and surpassing the anticipated 6.5% rise. The Core CPI (excluding food and energy) increased by 6.1% year-on-year, slightly lower than August's 6.2%, which was in line with the expected consensus of 6.0%.

In the meantime, the All Services CPI registered a 6.9% year-on-year growth, a slight uptick from August's 6.8%. In terms of monthly changes, the UK CPI increased by 0.5% in September, surpassing the expected 0.4% rise and exceeding August's 0.3%.

In response to the UK CPI data, GBP/USD showed a subdued reaction, continuing its recovery trajectory and hovering around 1.2192, marking a 0.12% gain for the day. This development is of importance as it reflects the current inflation rate in the UK, with the potential to impact the country's economic policies and currency exchange rates.

Anticipation for UK CPI Data on Wednesday

Looking ahead to Wednesday, investors have their eyes on the UK Consumer Price Index (CPI). Forecasts suggest a slight decrease in the annual figure, shifting from 6.7% to 6.5%. The Core CPI, which excludes volatile items, is also expected to ease from September's 6.2% to 6%.

Despite the moderation in the annual figures, there is an expectation of a notable increase in the monthly CPI, projected to rise from 0.3% to 0.4%. If indeed monthly inflation does increase, it could trigger speculation about the Bank of England (BoE) contemplating another interest rate hike. Currently, the likelihood of a 25 basis point BoE rate hike stands at approximately 50% for this cycle. Hence, the potential decrease in annual CPI and an increase in monthly CPI in the UK could lead to GBP/USD volatility, with markets closely watching for BoE rate hike speculation.

GBP/USD - Technical Analysis

The GBP/USD, colloquially known as "Cable," has always been a significant pair in the forex markets. It serves as a temperature gauge for the relative economic strength and geopolitical dynamics between the UK and the US. As of our analysis date, October 18, the pair stands at 1.21796, noting a slight uptick of 0.20%.

The pivotal level to monitor is 1.2220. On the upside, resistances lie at 1.2274, followed by 1.2338, and a more prominent level at 1.2421. On the downside, key supports are stationed at 1.2124, followed by 1.2069, and 1.2020.

In the realm of technical indicators, the RSI reads 47, suggesting a somewhat bearish sentiment as it's below the 50 midpoint. Interestingly, the MACD has shown a bullish sign, with its line crossing above the signal line, suggesting potential upward momentum. The current price is marginally below the 50 EMA at 1.2199, a level that might act as a short-term pivot.

The GBP/USD paints a mixed picture. It leans bearish as prices remain below 1.2200, but the MACD suggests a potential bullish momentum. This contradiction suggests traders might be in for a period of consolidation or volatility. In the short term, the pair could waver around the 1.2200 mark, possibly testing the nearby resistances if the upward momentum continues.

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Daily Price Outlook

The AUD/USD currency pair extended its gains for the second consecutive day, maintaining its strength against the US Dollar on Tuesday. This upward momentum was bolstered by the release of the hawkish Reserve Bank of Australia (RBA) minutes from the October 2023 meeting. Following the release of these minutes, the Australian Dollar continued to rise. Notably, the RBA board members expressed a preference for keeping the current interest rates unchanged.

Additionally, the US Dollar Index (DXY) faced downward pressure, primarily due to dovish comments made by several Federal Reserve officials. These remarks indicated that no further interest rate hikes were expected for the rest of 2023. Hence, this dovish stance by the Fed was another significant factor contributing to the AUD/USD pair's upward movement.

RBA's Interest Rate Decision and Economic Outlook

It's important to highlight that the Reserve Bank of Australia (RBA) recently deliberated on whether to raise interest rates by 25 basis points (bps) or leave them unchanged. They ultimately opted to keep the current rate, citing factors such as inflation data, employment figures, and forthcoming forecasts for the November meeting. The RBA is exercising caution due to potential inflation risks.

In terms of consumer sentiment, the Australian Weekly ANZ Roy Morgan survey revealed a decline in Consumer Confidence, falling from 80.1 to 76.4. This decline signals a more pessimistic outlook among consumers.

Despite government stimulus measures and ongoing Middle East conflicts, the Australian economy is grappling with challenges that could lead the RBA to consider implementing a 25 basis points (bps) interest rate hike, potentially reaching 4.35% by year-end. Additionally, the RBA is actively exploring the possibility of introducing a central bank digital currency (CBDC), a topic discussed by Brad Jones, the Assistant Governor (Financial System) at the RBA. On a different note, Chinese inflation declined in September, which may have repercussions for the Australian Dollar.

Current Factors Affecting the US Dollar and Upcoming Market Trends

Moreover, the US Dollar Index (DXY) is experiencing downward pressure, primarily due to remarks from multiple Federal Reserve officials indicating their intention to keep interest rates unchanged throughout the remainder of 2023. This cautious stance highlights the Federal Reserve's hesitancy to tighten monetary policy in the current economic climate.

Federal Reserve Bank of Philadelphia President Patrick Harker reinforced this sentiment by cautioning against increasing borrowing costs, especially in the absence of substantial shifts in economic data.

Consequently, investors are proceeding with caution when it comes to making significant bets on the US Dollar, given the uncertainty surrounding the Federal Reserve's interest rate decisions, which has created a sense of hesitation in the market.

Another factor offering support to the US Dollar is the rebound in US Treasury yields, currently at 4.72%. Furthermore, the US Dollar gains from its status as a safe-haven currency, especially during periods of heightened tension like the ongoing situation between Israel and Palestine.

AUD/USD - Technical Analysis

On October 17, the AUD/USD currency pair is observed to trade at a value of 0.6350, showing an increment of almost 0.13% during the Asian trading session. This performance, as visualized on a 4-hour chart timeframe, presents several key price determinants that traders need to keep an eye on. The pivot point is identified at 0.6359. For those looking at potential hurdles, immediate resistance is pinpointed at 0.6376, followed by stronger resistance levels at 0.6400 and 0.6432. Conversely, immediate support for the pair is located at 0.6341, with further cushions at 0.6320 and a significant support point at 0.6287.

Turning attention to the technical indicators, the Relative Strength Index (RSI) reads at 59. This denotes a moderately bullish sentiment as the RSI value is above the halfway point of 50. This might indicate the presence of more buyers than sellers in the recent trading sessions.

The 50-Day Exponential Moving Average (EMA) is mapped at 0.6347. With the AUD/USD trading slightly above this marker, it suggests a short-term bullish inclination. However, the pair's current location, particularly with the completion of the 50% Fibonacci retracement at $0.6355 and the appearance of a Doji candlestick pattern right below this retracement, hints at potential selling pressure.

In terms of chart patterns, the aforementioned Doji candlestick beneath the 50% Fibonacci level seems to advocate for selling. This could indicate a pause or indecision among traders after recent price movements, and might even hint at a potential reversal.

To encapsulate, while there's a semblance of bullish momentum, the overall trend for AUD/USD appears bearish, especially if it moves beneath the 0.6359 pivot. If this bearish sentiment holds, we can anticipate the asset to test the aforementioned support levels soon.

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Daily Price Outlook

Despite the lower-than-expected Canadian CPI, the USD/CAD pair failed to sustain its upward momentum, showing a bearish performance due to a weakening US dollar. The dollar was under pressure due to the dovish stance of the Federal Reserve. However, the dollar's losses may be short-lived, as overall market sentiment leans towards risk aversion, primarily due to escalating tensions in the Middle East. This sentiment could limit the US dollar's losses and, in turn, help the USD/CAD pair avoid deeper declines.

Investors are anticipating the release of Canada's inflation data and the United States' Retail Sales data for September. These upcoming data releases are likely to impact the trading dynamics within the USD/CAD pair.

Market Dynamics and Geopolitical Factors

During the European session, the S&P 500 futures recorded losses, signifying a decrease in risk appetite among market participants. The upward pressure on safe-haven assets is a result of mounting tensions in the Middle East. However, this tension is exacerbated by Israel's preparations for a ground offensive in Gaza against Hamas. Notably, the visit of US President Joe Biden to Israel takes center stage, with the primary objective being the safe evacuation of civilians amid the ongoing military actions by Palestinian groups.

The US Dollar Index (DXY) hovers around 106.60 as investors anticipate the Federal Reserve (Fed) will maintain interest rates on November 1. This expectation stems from Fed policymakers advocating for steady rates at 5.25-5.50%, given the persistence of multi-year high long-term bond yields, which are expected to constrain spending and investments.

Focus on Canadian Dollar: Inflation Data for September

Looking forward, investors are keeping a close eye on the coming inflation data for September. The headline Consumer Price Index (CPI) is expected to increase by 0.1% on a monthly basis, a drop from the previous 0.4% rise. The annual headline CPI, however, is anticipated to maintain a steady growth rate of 4%. Additionally, the core CPI figures are expected to show a consistent expansion, with a 0.1% increase monthly and a 3.3% increase on an annual basis.

Therefore, the lower-than-expected Canadian CPI may weaken the Canadian Dollar (CAD), potentially strengthening the USD/CAD pair as investors seek the stronger US dollar.

USD/CAD - Technical Analysis

The USD/CAD currency pair, as of October 17, has been recorded at 1.3631, marking an appreciation of 0.15%. This assessment, based on a 2-hour chart timeframe, reveals distinct price benchmarks that can guide traders. A pivot point for the pair is found at 1.3637.

On the upside, potential resistances are outlined at 1.3695, followed by more substantial barriers at 1.3745 and 1.3785. In contrast, the downside reveals immediate support at 1.3607, with successive support zones at 1.3581 and 1.3545.

Delving into technical indicators, the Relative Strength Index (RSI) has posted a value of 48. This slightly sub-midpoint value suggests a mild bearish sentiment, as RSI values below 50 tend to be indicative of bearish sentiment.

From the perspective of moving averages, the 50-Day Exponential Moving Average (EMA) is situated precisely at the pivot point of 1.3637. This means that the pair is hovering around this average, indicating a potential tipping point between short-term bullish and bearish trends.

No particular chart pattern has been highlighted for the session. However, its implications are paramount in deducing price movement tendencies.

In summation, the overarching trend for the USD/CAD pair seems to lean bearish if it goes below 1.3637, with the possibility of turning bullish if it crosses above. Given the existing market sentiment and technical configurations, traders should be on the lookout for possible challenges or confirmations of these levels in upcoming sessions.

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