Welcome to the Weekly Market Update!
We are here to provide you with the pivotal financial happenings and insights. Our focus is on the primary stories of the week, alongside a deep dive into market dynamics, economic milestones, events to monitor, and technical forecasts. Here’s the essential roundup to keep you savvy and ready for strategic financial moves.
Top Stories of the Week
- US Inflation Dips Below Predictions: The US inflation rate eased to 3.2%, falling short of the anticipated 3.3%. This development stirs speculation about the Federal Reserve ceasing rate hikes and potentially cutting rates in the latter half of 2024, leading to a 2.5-month low for the USD.
- Nasdaq100 Reaches Four-Month High: The Nasdaq100 index, known for its focus on technology and growth stocks, soared close to its July peak of 16,000. This rise is attributed to expectations that the Federal Reserve may halt further rate hikes.
- Microsoft Unveils Custom AI Chip: Microsoft announced its debut in AI-specific chips, along with an ARM-based chip for general computing, set to enhance capabilities within its Azure platform.
- Bitcoin Soars to 18-Month High: BTC/USD experienced a rally, reaching a high of $38,000. This surge is fueled by the optimism surrounding the potential approval of a spot Bitcoin ETF.
- Nvidia Introduces Advanced H200 Chip: Nvidia unveiled its latest high-end chip, the H200, designed to power the training of AI models, a crucial component in the burgeoning generative AI sector.
Market Analysis
- Gold Prices Surge Amid Rate Hike Speculations: Gold prices experienced a notable increase of over 1%, climbing from $1959 to $1981 per ounce. This upswing is attributed to growing speculation about the Federal Reserve reaching the peak of its rate hikes. Contributing factors include a rise in US initial jobless claims to 231K, exceeding the expected 220K and indicating a deceleration in the labor market. Additionally, industrial production dipped more than anticipated, from -0.36% to -0.6%, and homebuilder confidence reached its lowest point this year. Treasury yields advanced in response. The gold market is now closely watching the $2000 threshold. Remarks from Cleveland Fed President Loretta Mester regarding the uncertainty of further rate hikes add to the market’s attention.
Economic Highlights
- China’s Deflationary Pressures Mount: Upcoming data is expected to show stagnation in China’s consumer prices, with the September CPPI reading at 0%, and a concerning 2.5% drop in producer prices, hinting at a deflationary trend. The recent PMI figures underscore a contraction in manufacturing and a deceleration in the service sector, signaling that current stimulus efforts are falling short and may prompt the Chinese government to introduce additional economic support measures.
Upcoming Events to Watch
- FOMC Meeting Minutes (Nov 21): Release of November meeting minutes may clarify Fed’s stance on future rate hikes and impact market expectations.
- Eurozone PMI Data (Nov 23): Investors await PMI figures, with focus on recession concerns and sector-specific trends.
- BoE Monetary Policy Committee Hearing: Governor Andrew Bailey’s comments could influence Sterling, focusing on UK’s economic outlook and interest rates.
- Nvidia Q3 Earnings (Nov 21): Market anticipates Nvidia’s earnings, focusing on AI and data center performance, and new product launches.
- US Retail Sector Update: Earnings from Lowe’s and Best Buy on Nov 21st to shed light on retail trends ahead of Black Friday and Cyber Monday.
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 on an upward trajectory, marked by higher highs and higher lows above the 50 SMA. The RSI is in the overbought zone, above 65. A prominent bullish candle has transformed the previous bear flag pattern into a new uptrend. The recent high at 1.075 now serves as support, with 1.092 emerging as the next major high to watch.
GBP/USD
GBP/USD is beginning a new upward trend, consistently forming higher lows and highs above the 50-day SMA. With a bullish RSI, the pair recently broke out of its previous range, touching the key 1.25 level before a small retreat. The trend is likely to stay positive as long as prices remain above the 50-day SMA, despite the risk of a temporary reversal.
XAU/USD
XAU/USD is adjusting within its upward trend, showing lower highs and lows but still above the 50-day SMA. The RSI is neutral. The price has maintained the previously broken resistance level at 143 as its new support, observed from late August and September peaks. It’s now gradually climbing, with 1980 as the next immediate hurdle.
XUS500
XUS500 is on an upward trajectory, consistently creating higher highs and lows above the 50-day SMA. The RSI indicates an overbought condition. The price has continued its upward momentum, surpassing 4500 and now challenging the resistance level around 4520, set in September, with the next resistance point at 4600.
Thank you for reading! Wishing you successful trades ahead!
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