Welcome to the Weekly Market Update!
In this edition, we bring you the latest highlights and insights from the world of finance. We will cover the week’s top stories, provide market analysis, highlight economic developments, discuss upcoming events to watch, and present technical analysis. Let’s delve into the key information you need to stay informed and make informed financial decisions.
Top Stories of the Week
- Nasdaq100 Hits Nine-Day Winning Streak: The tech-heavy index marks its longest rally in two years, fueled by speculation of the Fed nearing peak interest rates.
- Disney Announces Additional $2 Billion in Cuts: Despite beating profit estimates, Disney’s revenue shortfall and shrinking ad revenue in streaming lead to an expanded cost-cutting plan.
- USD/JPY Under Intervention Watch: The currency pair fluctuates amid mixed Fed signals, with a rebound to 151.00 potentially triggering Japanese intervention to bolster the yen.
- WeWork Declares Bankruptcy: The office space company files for bankruptcy to restructure $13 billion in lease obligations.
Market Analysis
- Oil Prices Decline to Three-Month Low: Witnessing a 6% drop this week, oil prices have slid below $80 per barrel, marking their third consecutive weekly fall and a 13% decrease since late October. The decline reflects shifting concerns from Middle East supply disruptions to weakening demand fundamentals. China’s stalling economic recovery, shrinking refining margins, swelling U.S. oil stockpiles, and looming recession risks in Europe contribute to the downturn. The EIA forecasts a reduction in U.S. oil demand, with petroleum consumption expected to decrease significantly, underscoring analyst Norbet Ruecker’s view of a market pressured by abundant supply and stagnant demand.
Economic Highlights
- China Slips into Deflation: In October, China experienced deflation, with consumer prices falling 0.2%, reflecting ongoing economic challenges. The National Bureau of Statistics reported persistent weakness in consumer demand, with the consumer price index (CPI) and producer prices continuing to decline. Factors like a slump in pork prices contribute to the deflationary trend. This economic backdrop poses challenges for policymakers and impacts global inflation dynamics, with China’s CPI growth expected to fall short of the government’s target.
Upcoming Events to Watch
- US Inflation Data (Nov 14): Eyes on US CPI after a 3.7% YoY rise in September, driven by oil prices. October’s forecast suggests a cooling trend, following the Fed’s rate hold hinting at a cycle end.
- Walmart Earnings (Nov 16): Walmart to report earnings with expected EPS of $1.51 and $158.4 billion revenue. The retailer’s focus on essentials keeps demand high amid inflation, impacting its all-time high stock value.
- UK Inflation Report (Nov 15): UK inflation data anticipated to show a drop, influenced by Ofgem’s October price cap. September’s 6.7% YoY rate could ease closer to BoE’s 5% year-end target.
- China Retail Sales: Post-Singles Day, China’s retail sales data in focus amid a 5.5% September growth and a contrasting -0.2% YoY fall in consumer prices, questioning the strength of economic recovery.
- Target Q3 Earnings (Nov 15): Target to release Q3 results with an expected EPS of $1.47 and $25.26 billion revenue. Facing economic challenges and retail crime, its share price has dropped 27% YTD.
Technical Analysis
We have analyzed the most popular trading pairs and assets, including EUR/USD, GBP/USD, Gold, and US500. Our aim is to provide you with an insightful analysis of their trends and support/resistance levels, which will help you make informed decisions.
EUR/USD
EUR/USD is trending upwards, marked by higher highs and higher lows above the 50-day Simple Moving Average (SMA). The Relative Strength Index (RSI) remains bullish, yet not in the overbought territory. Despite this uptrend, a bearish flag pattern looms, hinting at a possible descent below the 1.043 lows. Key support levels at the 1.067 lows and the 50 SMA are pivotal for sustaining this uptrend, with the next potential high around 1.08.
GBP/USD
GBP/USD is undergoing a corrective phase in its broader downtrend, creating consistent highs and lows just above the 50-day Simple Moving Average (SMA). The Relative Strength Index (RSI) is currently neutral. The pair experienced a false breakout beyond its previous 250-pip range, spanning from 1.205 to 1.23. On the weekly chart, a bullish engulfing pattern emerged but encountered resistance at the 50-week SMA.
XAU/USD
XAU/USD is experiencing a corrective phase in its uptrend, creating lower highs and lows while staying above the 50 SMA. The RSI is neutral. After forming a short-term head and shoulders pattern, the price has dipped and is now retesting the critical support level at 143, previously a resistance point, as seen in the late August and September highs and lows.
XUS500
XUS500 is adjusting within a downtrend, establishing lower highs and higher lows above the 50 SMA. The RSI shows bullish tendencies without being overbought. The price is currently bouncing back from the resistance levels near 4390/4400. A falling wedge pattern, typically a bullish signal, supports the idea of a corrective phase in the ongoing long-term uptrend.
Thank you for reading! Wishing you successful trades ahead!
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