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
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The Fed Signals Pause on Hikes: The Federal Reserve maintained interest rates at a steady 5.25%-5.5% and suggested that heightened yields could diminish the necessity for further rate increases.
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Shell Reports Solid Profits: Shell declared a substantial $6.2 billion in adjusted earnings, matching predictions, and unveiled plans for a $3.5 billion share repurchase program.
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USD/JPY Approaches Annual Peak: The currency pair ascended close to the previous year’s zenith of 151.94, following a less hawkish than anticipated stance from the Bank of Japan, prompting market anticipation of possible intervention by Japanese authorities.
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Advanced Micro Devices Surges on Strong Results: AMD saw its shares leap by 9% post-earnings, delivering impressive Q3 results and optimistic projections, particularly within its data centre GPU segment.
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Airbnb Tops Revenue Estimates: The accommodation marketplace reported a robust $3.4 billion in revenue, narrowly surpassing the expected $3.37 billion. However, shares slipped following guidance that fell short of market expectations for the upcoming quarter.
Market Analysis
- Crude Oil Rebounds in a Risk-On Market: WTI crude oil prices bounced back, reflecting the upbeat market sentiment and production cut expectations from Saudi Arabia, despite the looming potential of weaker demand and geopolitical tensions possibly influencing future price movements.
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
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RBA Interest Rate Update (Nov 7): Eyes are on the Reserve Bank of Australia as it leans towards a rate increase due to spiking inflation rates. Odds favor a 25 basis point lift, potentially pushing the cash rate to a 12-year peak of 4.35%. This follows IMF’s call for more aggressive measures to curb inflationary pressures.
Disney’s Fiscal Report (Nov 8): Disney is set to unveil its Q4 earnings with projections of $0.72 EPS, a dip from Q3’s $1.03, amidst revenues of $21.42 billion. The focus is on its streaming segment’s subscriber growth against the backdrop of global economic headwinds.
China’s Inflation Data Release (Nov 9): With China’s CPPI stagnant and producer prices falling, the upcoming inflation report may confirm deflationary fears. Recent PMIs indicated a need for stronger economic stimuli to avert further contraction.
Uber’s Q3 Earnings (Nov 7): Uber is anticipated to reveal a significant turnaround with a forecasted $0.13 EPS, signaling profitability against last year’s losses. Sales are expected to jump to $9.47 billion, with gross bookings predicted to increase notably from the previous year.
Eurozone Consumer Spending Insights (Nov 8): The upcoming retail sales data from the eurozone will offer a window into consumer resilience amid surging interest rates and softening inflation, potentially influencing ECB’s future rate decisions amidst recession speculations.
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
The EUR/USD is correcting within a downtrend, with the price forming higher highs and lows beneath the 50-day Simple Moving Average (SMA). The Relative Strength Index (RSI) remains neutral. There have been two false breakouts above the 50 SMA, with selling pressure emerging below 1.07 and buying interest reappearing near the 1.05 level. The possibility of a bearish flag pattern persists. The current price action indicates an uptrend, suggesting potential for further gains. However, considering Friday’s significant upward movement, a retracement would be preferable before initiating any long positions.
GBP/USD
The GBP/USD pair saw a significant rally on Friday, buoyed by the Non-Farm Payrolls (NFP) data, and ended the session at the weekly pivot resistance level. The bullish price action suggests the potential for continued upward movement in the coming week, barring any contrary signals. The pair appears to be breaking out after three weeks of sideways trading.
XAU/USD
Gold is trending upward, consistently achieving new highs and higher lows beyond the 50-day Simple Moving Average (SMA). The Relative Strength Index (RSI) indicates overbought conditions, sitting above 65. Currently, the price is hovering above the key $2,000 mark, potentially gearing up for another climb. If not, we may see a retracement towards the $1,900 level.
XUS500
The SP500 has seen a notable week, climbing over 200 points, which translates to a 5% gain. More significantly, it has returned to a key zone that has historically been a critical level of support or resistance. The formation of a falling wedge pattern, which is generally a bullish indicator, suggests a potential corrective rally in the context of the broader uptrend. The index moving back above the 50-day Simple Moving Average (SMA) would be consistent with this long-term upward trend and is the anticipated move.
Thank you for reading! Wishing you successful trades ahead!
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