Yen Breaks 150 Level, Sparking Intervention Speculation

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The Japanese yen has weakened to a one-year low at 150 per dollar, raising the spectre of potential currency intervention. Alphabet's disappointing earnings report sent shockwaves through the US equity market, triggering a significant selloff. The US Dollar is standing strong, bolstered by a series of encouraging economic data, with New Home Sales taking the spotlight. Investors are keenly anticipating forthcoming data releases, including US GDP, Initial Jobless Claims, and the Core PCE Price Index, seeking further trading signals. Meanwhile, the Bank of Canada maintained its interest rates, yet it sounded a caution about the possibility of an economic slowdown in Canada, causing some pressure on the Canadian Dollar.

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Current rate hike bets on 1st November Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (98.0%) VS 25 bps (2%)   

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Market Movements

DOLLAR_INDX

The US Dollar remains in the spotlight as the US Treasury yields surge in response to a string of robust economic data releases. New home sales data from the Census Bureau revealed a substantial increase, climbing from 676,000 to 759,000, surpassing market expectations of 680,000 and underlining the strength in the housing sector. As we look ahead, market focus remains sharp on upcoming releases, including US GDP, Initial Jobless Claims, and the Core PCE Price Index.

The Dollar Index is trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 64, suggesting the index might extend its gains after breakout since the RSI stays above the midline. 

Resistance level: 106.60, 107.15

Support level: 105.55, 104.80

XAU/USD

The gold market is in a consolidation phase while attempting to break a formidable resistance level in 1980. Despite an initial drop, primarily due to a stronger US dollar following better-than-expected housing data, gold regained ground. Investors continue to closely watch high-risk events, including Middle East tensions and key US economic data, for potential trading cues.

Gold prices are trading higher while currently testing the resistance level. MACD has illustrated diminishing bearish momentum, while RSI is at 61, suggesting the commodity might extend its gains after breakout since the RSI stays above the midline. 

Resistance level: 1985.00, 2015.00

Support level: 1940.00, 1910.00

EUR/USD

The Euro faces headwinds due to a pessimistic economic outlook. Indicators, from industrial output to PMI and sentiment readings, point to either stagnation or contraction in the Eurozone's economy. Detailed data underscores the underlying pessimism, prompting investors to divest from the currency.

EUR/USD is trading lower while currently testing the support level. MACD has illustrated increasing bearish momentum, while RSI is at 40, suggesting the pair might extend its losses since the RSI retreated sharply from overbought territory. 

Resistance level: 1.0675, 1.0795

Support level: 1.0530, 1.0450

GBP/USD，H4Pound Sterling's decline persists as a gloomy economic outlook weighs on demand. A prolonged drop in employment and signs of abating inflationary pressures have emerged, casting doubts on the possibility of stagflation risks. Despite relatively high UK inflation compared to other G7 countries, pessimistic job and economic growth data raise concerns.

GBP/USD is trading lower following the prior breakout below the previous support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 28, suggesting the pair might enter oversold territory. 

Resistance level: 1.2130, 1.2220

Support level: 1.2045, 1.1945

Nasdaq

US equity markets underwent a significant selloff, largely attributed to Alphabet (Google) posting disappointing earnings. Google's parent company witnessed a sharp drop of over 9% in its shares due to disappointing cloud services revenue, rekindling concerns about the possibility of an economic slowdown.

Nasdaq is trading lower following the prior breakout below the previous support level. MACD has illustrated increasing bearish momentum, while RSI is at 33, suggesting the index might extend its losses since the RSI stays below the midline. 

Resistance level: 15780.00, 16585.00

Support level: 13858.00, 13115.00

USD/JPY

The Japanese yen has tumbled to its weakest level against the dollar in a year, putting pressure on the Bank of Japan ahead of an impending policy decision. The risk of government intervention in the currency market looms large, reminiscent of Japan's sizable interventions in 2022. The yen's 12% depreciation against the dollar, primarily due to interest rate differentials, makes it the poorest performer among G-10 currencies, drawing the market's focus on potential Bank of Japan moves.

USD/JPY is trading higher following the prior breakout above the resistance level. MACD has illustrated increasing bullish momentum. However, RSI is at 69, suggesting the pair might enter overbought territory. 

Resistance level: 151.45, 152.00

Support level: 149.95,  148.40

USD/CAD

Despite a hawkish tone from the Bank of Canada, the Canadian dollar extended its losses. The central bank pledged to keep interest rates steady but kept the door open for further tightening, even as weaker economic growth is projected. Concerns arise as past rate hikes begin to impact economic activity and price pressures, with economic growth expected to slip below 1% next year.

USD/CAD is trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 66, suggesting the pair might extend its gains after breakout since the RSI stays above the midline. 

Resistance level: 1.3820, 1.3980

Support level: 1.3640, 1.3510

CL OIL

The oil market experienced an upturn as Israel's preparations for a potential ground invasion of Gaza rekindled concerns about supply disruptions from the Middle East. Israeli Prime Minister Benjamin Netanyahu's statement about the country's existential battle added further uncertainty. However, gains in the oil market are tempered by downbeat inventory reports, with US crude oil inventories coming in higher than expected.

Oil prices are trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 48, suggesting the commodity might extend its gains toward resistance level since the RSI rebounded sharply from oversold territory. 

Resistance level: 89.35, 94.00

Support level: 82.50, 78.15