هشدار ریسک: CFDs ابزارهای پیچیده ای هستند و به دلیل داشتن لوریج بالا، ریسک بالایی هم برای از دست دادن سریع پول دارند.80% از خرده سرمایه گذاران پول خود را در معاملات CFD با این ارائه دهنده از دست می دهند. شما باید در نظر بگیرید که چگونگی کار با CFD ها را درک کنید و توان تحمل ریسک بالای ضرر کردن را داشته باشید.
هشدار ریسک: CFDs ابزارهای پیچیده ای هستند و به دلیل داشتن لوریج بالا، ریسک بالایی هم برای از دست دادن سریع پول دارند.80% از خرده سرمایه گذاران پول خود را در معاملات CFD با این ارائه دهنده از دست می دهند. شما باید در نظر بگیرید که چگونگی کار با CFD ها را درک کنید و توان تحمل ریسک بالای ضرر کردن را داشته باشید.

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چهارشنبه، 28 اكتبر، 2020

The USD/JPY pair remained depressed through the early North American session, albeit has managed to rebound around 20-25 pips from five-week lows touc

USD/JPY added to the overnight losses and witnessed some follow-through selling on Wednesday.A selloff in the equity markets underpinned the safe-haven JPY and exerted some heavy pressure.A strong pickup in the USD demand helped the pair to find some support ahead of the 104.00 mark.The USD/JPY pair remained depressed through the early North American session, albeit has managed to rebound around 20-25 pips from five-week lows touched earlier this Wednesday. The pair extended this week's retracement slide from levels just above the key 105.00 psychological mark and witnessed some heavy selling for the second consecutive session. A selloff in the global equity markets forced investors to take refuge in traditional safe-haven assets. This, in turn, boosted the Japanese yen and was seen as a key factor exerting pressure on the USD/JPY pair. The global risk sentiment took a hit on the back of growing worries about the continuous surge in new coronavirus cases. The US political uncertainty and the lack of progress in the US stimulus talks further dampened the market mood. The global flight to safety was further reinforced by a fresh leg down in the US Treasury bond yields, which contributed to the USD/JPY pair's intraday fall. However, concerns that renewed lockdown measures to curb the second wave of COVID-19 infections could derail the already fragile economic recovery provided a strong to the US dollar's status as the global reserve currency. A broad-based USD strength helped ease the bearish pressure, rather assisted the USD/JPY pair to find decent support ahead of the 104.00 mark, or September monthly swing lows. That said, any meaningful recovery still seems elusive amid absent relevant market-moving economic releases. The focus now shifts to the latest monetary policy update by the Bank of Japan (BoJ), scheduled to be announced during the Asian session on Thursday. The BoJ decision, along with developments surrounding the coronavirus saga will now play a key role in influencing the near-term momentum for the USD/JPY pair. Technical levels to watch  

The persistent bias towards the safe haven universe drags EUR/USD to the important area of contention near the 1.1700 level on Wednesday. EUR/USD look

EUR/USD loses further ground and drops to the vicinity of 1.17.Coronavirus concerns underpin the risk-off sentiment among traders.Investors expect a dovish message from the ECB on Thursday.The persistent bias towards the safe haven universe drags EUR/USD to the important area of contention near the 1.1700 level on Wednesday. EUR/USD looks cautious ahead of the ECB event A combination of cautious trade ahead of the ECB monetary policy meeting (on Thursday) and rising concerns over the advance of the pandemic in Europe is taking a toll on the single currency and the rest of its risk-associated peers on Wednesday. The pick-up in the risk aversion comes in tandem with the implementation of tighter restriction measures across the Old Continent in order to slow down the spread of the coronavirus, which has reached unprecedented levels in many countries already. Earlier in the euro docket, France’s Consumer Confidence came in above consensus at 94 for the month of October. In Germany, Import Prices surprised to the upside and rose 0.3% MoM in September and contracted 4.3% from a year earlier. In the NA session, September’s advanced trade deficit is expected to shrink to $79.37 billion while Mortgage Applications expanded 1.7% WoW. What to look for around EUR EUR/USD loses momentum and retests the 1.1750 region against the backdrop of a persistent inflows into the safe haven universe. The outlook on EUR/USD remains positive, however, and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), the so far cautious stance from the ECB and the solid position of the EMU’s current account. In addition, the probable “blue wave” following the US elections is deemed as a negative driver for the greenback and carries the potential to lend extra legs to the pair in the longer run. EUR/USD levels to watch At the moment, the pair is losing 0.50% at 1.1736 and faces the next support at 1.1688 (monthly low Oct.15) followed by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9). On the other hand, a breakout of 1.1880 (monthly high Oct.21) would target 1.1917 (high Sep.10) en route to 1.1965 (monthly high Aug.18).

In a widely expected decision, the Bank of Canada (BoC) announced on Wednesday that it left its key rate unchanged at 0.25% following its October poli

In a widely expected decision, the Bank of Canada (BoC) announced on Wednesday that it left its key rate unchanged at 0.25% following its October policy meeting. In its policy statement, the BoC noted that there is ongoing and significant slack the Canadian economy and added that the gap between the actual and potential output is not expected to close until 2023. Developing story...

Canada BoC Interest Rate Decision meets expectations (0.25%)

The French government is preparing to announce a stay-at-home order this week in an attempt to limit the spread of the coronavirus in the country, Reu

The French government is preparing to announce a stay-at-home order this week in an attempt to limit the spread of the coronavirus in the country, Reuters reported on Wednesday, citing two sources familiar with the matter. "The industry sources said that the new restrictions would be nationwide and similar in scope to a lockdown that was enforced in spring this year when hospitalisations and deaths caused by the virus reached a peak," wrote Reuters' Elizabeth Pineau and Michel Rose. Market reaction The EUR/USD pair showed no immediate reaction to this headline and was last seen losing 0.55% on the day at 1.1730.

According to German newspaper Bild, a nationwide lockdown in the country could start as early as next Monday, November 2nd, if Chancellor Angela Merke

According to German newspaper Bild, a nationwide lockdown in the country could start as early as next Monday, November 2nd, if Chancellor Angela Merkel comes to an agreement with the premiers of Germany's states, as reported by Reuters. Earlier in the day, Reuters noted that a draft resolution suggested that the lockdown would begin on November 4th. Market reaction Safe-haven flows continue to dominate the financial markets on Wednesday. As of writing, Germany's DAX 30 Index was down 3.8% on a daily basis at 11,608.

Major equity indexes in the US opened with large losses on Wednesday as the coronavirus fears and the upcoming presidential election force investors t

Wall Street's main indexes are posting heavy losses on Wednesday.All major sectors of the S&P 500 trade in the negative territory.Market mood remains dismal ahead of the presidential election.Major equity indexes in the US opened with large losses on Wednesday as the coronavirus fears and the upcoming presidential election force investors to seek refuge. As of writing, the S&P 500 was down 1.93% on the day at 3,325, the Dow Jones Industrial Average was losing 1.82% at 26,966 and the Nasdaq Composite was falling 2.03% at 11,198. Mirroring the intense flight to safety, the CBOE Volatility Index (VIX), Wall Street's fear gauge, is up nearly 14% on a daily basis. All 11 major sectors of the S&P 500 trade in the negative territory. The Energy Index, the Communication Services Index and the Technology Index all lose more than 2% as the worst performers in the early trade. On the other hand, the defensive Utilities Index is losing 0.7%. Earlier in the day, the data published by the US Census Bureau revealed that the trade deficit in September narrowed modestly to $79.3 billion but had little to no impact on market sentiment. S&P 500 chart (daily)

The UK government will not back down on its policy on fisheries, British Cabinet Minister Michael Gove said on Wednesday, as reported by Reuters. "The

The UK government will not back down on its policy on fisheries, British Cabinet Minister Michael Gove said on Wednesday, as reported by Reuters. "The European Commission has made clear it will not agree to third-country cumulation in any circumstances," Gove added in a letter sent to a Welsh lawmaker. "The trade deal with the EU remains our strong preference." Market reaction These comments don't seem to be having a significant impact on the British pound's performance against its rivals. As of writing, the GBP/USD pair was down 0.75% on the day at 1.2945.

Gold added to its intraday losses and dived to three-week lows, around the $1877-76 region during the early North American session. The precious metal

Gold witnessed some heavy selling on Thursday amid a strong pickup in the USD demand.Weakness below the $1890 horizontal support further aggravated the bearish pressure.The stage seems set for a fall to retest September monthly lows, near the $1849-48 region.Gold added to its intraday losses and dived to three-week lows, around the $1877-76 region during the early North American session. The precious metal struggled to capitalize on the previous day's modest uptick, instead met with some fresh supply near the top end of a three-day-old trading range. The sharp intraday fall was exclusively sponsored by a strong pickup in the US dollar demand, which tends to undermine dollar-denominated commodities, including gold. Given the alarming pace of growth in new coronavirus cases in Europe and the United States, investors now seem concerned that renewed lockdown measures could prove detrimental to the already fragile global economic recovery. This, in turn, was seen as a key factor that provided a strong boost to the greenback's status as the global reserve currency. The USD bulls largely shrugged off the uncertainty over the actual outcome of the US presidential election. It is worth reporting that national polls show Democrat rival Joe Biden has a lead over Republican incumbent President Donald Trump. Investors, however, remain wary on the back of a narrow gap in certain key swing states. This, along with the lack of progress in the US stimulus talks dampened the market mood. This was evident from a steep decline in the equity markets. The anti-risk flow was reinforced by a fresh leg down in the US Treasury bond yields, albeit did little to revive the precious metal's safe-haven demand or lend any support. Apart from a broad-based USD strength, Wednesday's downfall could further be attributed to some technical selling below the $1890 horizontal level. A subsequent breakthrough 100-day SMA support, around the $1886 region, for the first time since March might have already set the stage for an extension of the depreciating move. There isn't any major market-moving economic data due for release from the US on Wednesday. Hence, developments surrounding the coronavirus saga will continue to play a key role in influencing the USD price dynamics and produce some short-term opportunities. Nevertheless, the XAU/USD now seems vulnerable to slide further towards September monthly swing lows support near the $1849-48 region. Technical levels to watch  

The greenback extends the buying momentum and tests weekly peaks in the 93.60 zone when tracked by the US Dollar Index (DXY). US Dollar Index underpin

DXY’s upside momentum remains well in place near 93.60.Pandemic concerns give extra sustain to the risk aversion.US advanced trade deficit shrunk to $79.37 billion in September.The greenback extends the buying momentum and tests weekly peaks in the 93.60 zone when tracked by the US Dollar Index (DXY). US Dollar Index underpinned by risk-off mood The index extends its march north in the middle of the week and reaches the 93.60 level on the back of prevailing risk aversion in the global markets. Indeed, rising coronavirus cases and the re-implementation of lockdown-like measures across Europe continue to give support to the resumption of the risk aversion and the ultimate demand for the safe havens. In the US data space, advanced trade figures for the month of September showed the trade deficit is expected to shrink to $79.37 billion. Earlier in the session, weekly Mortgage Applications expanded 1.7% according to MBA. Later in the session, the EIA will report on the weekly variation of US crude oil inventories. What to look for around USD The index manages to regain the area above the key 93.00 barrier so far this week. The current recovery in the dollar comes in response to the impact of the COVID-19 pandemic on the global growth prospects as well as fading chances of a deal between Democrats and Republicans over a new stimulus bill. However, the stance on the dollar is likely to deteriorate in case of a “blue wave” following the presidential elections next month, while the “lower for longer” stance from the Federal Reserve also caps occasional bullish attempts. US Dollar Index relevant levels At the moment, the index is gaining 0.52% at 93.57 and a break above 93.90 (weekly high Oct.15) would expose 94.20 (38.2% Fibo retracement of the 2017-2018 drop) and finally 94.74 (monthly high Sep.25). On the other hand, the next support is located at 92.47 (monthly low Oct.21) followed by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018).

After breaking above 0.9100 during the European trading hours, the USD/CHF preserved its bullish momentum and touched its highest level since October

USD/CHF is rising for the third straight day on Wednesday.US Dollar Index climbs to nine-day highs above 93.60.S&P 500 futures are down nearly 2% ahead of the opening bell.After breaking above 0.9100 during the European trading hours, the USD/CHF preserved its bullish momentum and touched its highest level since October 19th at 0.9128. As of writing, the pair was up 0.4% on the day at 0.9122. DXY rises for the third straight day The broad-based USD strength remains the primary driver of USD/CHF's movements on Wednesday. The US Dollar Index (DXY), which posted small gains and closed above 93.00 on Tuesday, capitalized on safe-haven flows and climbed to its highest level in more than a week at 93.64. At the moment, the DXY is up 0.5% on the day at 93.55. Reflecting the risk-averse market environment, the S&P 500 futures are down nearly 2% on the day, suggesting that Wall Street's main indexes look to start the day deep in the negative territory. Additionally, the 10-year US Treasury bond yield is losing more than 2%, confirming the view that safe-haven flows are likely to continue to dominate the markets. Meanwhile, the only data from the US showed on Wednesday that the trade deficit in September narrowed $79.4 billion from $83.1 billion in August but was largely ignored by the market participants. Technical levels to watch for  

The EUR/USD pair is trading sharply lower, approaching the 1.1700 threshold, as risk-off fuels equities’ sell-off in favor of the American currency, F

The EUR/USD pair is trading sharply lower, approaching the 1.1700 threshold, as risk-off fuels equities’ sell-off in favor of the American currency, FXStreet’s Chief Analyst Valeria Bednarik reports. Key quotes “The number of new coronavirus cases in the Union these days continues to increase to record levels which largely surpass the peaks from March/April. Curfews have proved insufficient to slow contagions, and harsh restrictive measures are coming to several countries. Equities in the Union plunged, dragging alongside Wall Street’s futures.” “EUR/USD trades at daily lows in the 1.1720 area, as the dollar keeps strengthening, and approaches this October low at 1.1688. The 4-hour chart shows that the pair has accelerated its decline after breaking below its larger moving averages, while technical indicators head firmly lower near oversold readings, all of which supports further declines ahead.”  

The Bank of Canada (BoC) is scheduled to announce its latest monetary policy update at 14:00 GMT this Wednesday. The BoC is widely anticipated to main

BoC monetary policy decision – Overview The Bank of Canada (BoC) is scheduled to announce its latest monetary policy update at 14:00 GMT this Wednesday. The BoC is widely anticipated to maintain status-quo and leave its benchmark interest rates unchanged at 0.25% at the conclusion of the October policy meeting. Market expectations for any kind of a policy shift in the accompanying policy statement are also low. Meanwhile, the BoC Governor Tiff Macklem recently left the door open for negative rates and hence, the focus will be on any further talks in that direction. How could it affect USD/CAD? The recent price action has been influenced by developments surrounding the coronavirus saga, oil price dynamics and the US political uncertainty. The Canadian dollar is unlikely to move in any significant direction unless there is a surprise along the yield curve control or a meaningful QE change. Ahead of the key event risk, the USD/CAD pair rallied to three-week tops, around the 1.3300 mark, amid a broad-based USD strength and tumbling crude oil prices. Some follow-through buying beyond the 1.3330-35 supply zone should pave the way for a move back towards reclaiming the 1.3400 round-figure mark. On the flip side, any meaningful pullback now seems to find decent support near the 1.3225-20 region. Failure to defend the mentioned level might prompt some technical selling and drag the USD/CAD pair back below the 1.3200 mark. The downward trajectory could further get extended towards challenging the next major support near the 1.3110-1.3100 zone. Key Notes   •  Bank of Canada Preview: Covid concerns set to outweigh recovery optimism and crush CAD   •  BoC Preview: Yield curve control is a risk for the loonie – TDS   •  USD/CAD Weekly Forecast: Making the drift lower seem stationary About the BoC interest rate decision BoC Interest Rate Decision is announced by the Bank of Canada. If the BoC is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the CAD. Likewise, if the BoC has a dovish view on the Canadian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.

The lira’s rout remains unabated for yet another session and pushes USD/TRY to fresh all-time highs beyond 8.30 on Wednesday. USD/TRY looks to geopoli

USD/TRY remains well bid above the 8.00 mark.Geopolitical, monetary concerns keep weighing on the lira.Turkey’s Economic Confidence improved to 92.80 in October.The lira’s rout remains unabated for yet another session and pushes USD/TRY to fresh all-time highs beyond 8.30 on Wednesday. USD/TRY looks to geopolitics USD/TRY extends the upside in tandem with the unremitting depreciation of the Turkish lira, which has already shed around 28% so far this year. Investors continue to sell the lira following last week’s decision by the Turkish central bank to leave the One-Week Repo Rate unchanged vs. the broad consensus favouring at least 150bps hike. Extra downside on the currency comes from the geopolitical side in response to rising bets on US and EU sanctions against Ankara following the purchase of the Russian S-400 missile defence system and escalating verbal tensions with France. That, plus Turkey’s ongoing involvement in conflicts in the Eastern Mediterranean and the Caucasus have been exacerbating the selling pressure around TRY. On the domestic scenario, the prospects of higher inflation appear reinforced by the reluctance of the CBRT to tighten its monetary policy further (or at least in line with market expectations). The situation looks aggravated by the continuous loss of FX reserves by state-owned lenders in order to prevent the currency to keep debilitating. A lethal cocktail for a balance of payments crisis keeps brewing in the meantime… Data wise in Turkey, the Economic Sentiment edged higher to 92.8 for the current month. USD/TRY key levels At the moment the pair is gaining 1.09% at 8.2727 and faces the next hurdle at 8.3158 (all-time high Oct.28). On the downside, a drop below 7.7787 (low Oct.22) would expose 7.6294 (monthly low Oct.1) and finally 7.5082 (low Sep.25).

Gold is falling alongside stocks as the market mood sours. Rising coronavirus cases in Europe and the US is weighing on the mood, as well as uncertain

Gold is falling alongside stocks as the market mood sours. Rising coronavirus cases in Europe and the US is weighing on the mood, as well as uncertainty about the elections. The chances of a "blue wave" – a massive Democratic victory – that would ensure massive stimulus seems less certain as investors get nervous ahead of the vote.  See Gold Price Analysis: XAU/USD has three ways go in response to the 2020 Presidential Elections In the meantime, how are technicals looking for XAU/USD? Bears seem to have the upper hand.  The Technical Confluences Indicator is showing that significant resistance awaits gold at $1,904, which is the convergence of the Bollinger Band 4h-Middle, the BB one-day Middle, the Simple Moving Average 10-1h, the SMA 5-4h, and the Fibonacci 38.2% one-month.  An even stronger cap awaits XAU/USD at $1,909, which is the meeting point of the Fibonacci 23.6% one-day and the Fibonacci 61.8% one-week.  Some support awaits at $1,886, which is the confluence of the Pivot Point one-week Support 1 and the PP one-day S3.  The downside target is $1,871, which is a juncture including the Fibonacci 161.8% one-week and the PP one-week S2. Key XAU/USD resistances and supports Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. Learn more about Technical Confluence

The United States' goods and services deficit declined by $3.7 billion to $79.4 billion from $83.1 billion in August, the data published jointly by th

Goods Trade Balance in the US came in at -$79.4 billion in September.US Dollar Index continues to push higher above mid-93s.The United States' goods and services deficit declined by $3.7 billion to $79.4 billion from $83.1 billion in August, the data published jointly by the US Census Bureau and the US Bureau of Economic Analysis showed on Wednesday. "Exports of goods for September were $122.0 billion, $3.2 billion more than August exports," the publication further revealed. "Imports of goods for September were $201.4 billion, $0.5 billion less than August imports." Additionally, the Wholesale Inventories in September fell by 0.1% after increasing by 0.3% in August. Market reaction The US Dollar Index extended its daily climb after this data and was last seen gaining 0.52% on the day at 93.58.

United States Wholesale Inventories below expectations (0%) in September: Actual (-0.1%)

United States Goods Trade Balance climbed from previous $-82.94B to $-79.37B in September

In the eurozone, banks’ market value is extremely low relative to the book value of their assets (their value-to-book ratio is very low). This may ref

In the eurozone, banks’ market value is extremely low relative to the book value of their assets (their value-to-book ratio is very low). This may reflect one of two realities, either their market value is incorrect or their book value is incorrect. An observation of past developments in these two variables seems to show that the dominant mechanism is market undervaluation, not book overvaluation, according to analysts at Natixis. See: The fall in banks’ equity market valuation is clearly excessive – Natixis Key quotes “The low valuation of eurozone banks may reflect one of two realities, either the market valuation is abnormally low, and investors have an abnormal aversion to banking risk or undervalue banks’ future profitability or banks' book value (the value of their assets) is overestimated. Banks will suffer losses in the future that are not currently provisioned, and therefore not deducted from their book capital.” “Let us first look at the link between eurozone banks’ market capitalisation and their earnings to see whether the banks’ valuation is abnormally low. We see that their market capitalisation has declined relative to earnings since 2010.” “Let us next look at eurozone banks’ book value to see whether it has been revised downwards in the past after having been overestimated, in particular when banks have suffered losses. We see that banks’ book value was not revised downwards after the 2013-2016 peak in defaults (non-performing loans).”  

The GBP/USD pair continued losing ground through the mid-European session and tumbled to fresh one-week lows, just below mid-1.2900s in the last hour.

GBP/USD witnessed some heavy selling on Wednesday amid a strong pickup in the USD demand.Worries over rising COVID-19 cases and fresh lockdown restrictions benefitted the safe-haven USD.Brexit uncertainties further took its toll on the British pound and contributed to the steep decline.The GBP/USD pair continued losing ground through the mid-European session and tumbled to fresh one-week lows, just below mid-1.2900s in the last hour. Following the previous day's modest bounce, the pair came under some renewed selling pressure on Wednesday and prolonged this week's retracement slide from the 1.3175 region. The downfall marked the fourth day of a negative move in the previous five was exclusively sponsored by a strong pickup in the US dollar demand. The global risk sentiment took a hit amid the imposition of fresh restriction to curb a resurgence in new coronavirus cases. This, in turn, fueled concerns that economic growth will weaken once again and triggered a selloff in the equity markets, which provided a strong boost to the greenback's status as the global reserve currency. The USD bulls seemed unaffected by growing wariness about the US presidential election. Nations polls have been indicating that Democrat candidate Joe Biden is ahead of incumbent President Donald Trump, though the gap is narrow in certain key swing states. Adding to the uncertainty is the possibility that the election outcome can be contested. Apart from a broad-based USD strength, the UK's impending departure from the European Union kept the GBP bulls on the defensive and contributed to the heavily offered tone surrounding the GBP/USD pair. The steep intraday slide could further be attributed to some technical selling below the key 1.3000 psychological mark. In the absence of any major market-moving economic release, either from the UK or the US, development surrounding the coronavirus saga will drive the market risk sentiment and influence the USD price dynamics. This, along with the incoming Brexit-related headlines will be looked upon for some meaningful trading opportunities. Technical levels to watch  

European Commission President Ursula von der Leyen noted on Wednesday that the supply of potential COVID-10 vaccine to Europe could begin "in earnest

European Commission President Ursula von der Leyen noted on Wednesday that the supply of potential COVID-10 vaccine to Europe could begin "in earnest in April," as reported by Reuters. Von der Leyen further noted that companies could deliver up to 50 million vaccines to the European Union, in the best-case scenario. Earlier in the day, she acknowledged that they were expecting the coronavirus cases to increase in the next two-three weeks. Market reaction The EUR/USD pair remains under heavy bearish pressure following these comments and was last seen losing 0.58% on the day at 1.1726.

The AUD/USD pair rose above 0.7150 earlier in the day but made a sharp U-turn ahead of the American session and slumped to its lowest level in a week

AUD/USD dropped below 0.7100 ahead of the American session.US Dollar Index rose to highest level in nine days near 93.50.Wall Street's main indexes look to open sharply lower on Wednesday.The AUD/USD pair rose above 0.7150 earlier in the day but made a sharp U-turn ahead of the American session and slumped to its lowest level in a week at 0.7073. As of writing, the pair was down 0.7% on the day at 0.7078. Earlier in the day, the data published by the Reserve Bank of Australia (RBA) showed that the Trimmed Mean Consumer Price Index (CPI) in the third quarter rose to 0.4% on a quarterly basis from -0.1%. Although this reading helped the AUD stay resilient against its rivals during the first half of the day, the risk-averse market environment forced AUD/USD to turn south. DXY edges higher ahead of Wall Street's opening bell The US Dollar Index (DXY), which closed the first two days of the week in the positive territory, continues to push higher on Wednesday and is currently gaining 0.4% at 93.46, a little below the nine-day high it set at 93.50. The surging number of coronavirus infections in Europe and the lack of progress in stimulus talks in the US continue to weigh on market sentiment. Reflecting the dismal market mood, the S&P 500 futures are down 1.4% on the day, suggesting that Wall Street is likely to open deep in the negative territory. If safe-haven flows dominate the financial markets in the second half of the day, the USD could gather further strength and cause AUD/USD to extend its slide. The only data featured in the US economic docket will be September Trade Balance on Wednesday. During the Asian session on Thursday, the National Australia Bank's (NAB) Business Confidence Index will be looked upon for fresh impetus. Technical levels to watch for  
EUR/USD hit a low under 1.1730 More to come

The Bank of Canada (BoC) is set to leave rates unchanged but rock markets with its quarterly report which includes new forecasts and is accompanied by

The Bank of Canada (BoC) is set to leave rates unchanged but rock markets with its quarterly report which includes new forecasts and is accompanied by a press conference. There are significant changes that Governor Macklem emphasizes the uncertain future over the recent recovery, weighing on the loonie, FXStreet’s Analyst Yohay Elam reports. More: BoC Preview: Yield curve control is a risk for the loonie – TDS USD/CAD to struggle to break below 1.30 – MUFG Bank of Canada Preview: Seven major banks expectations Key quotes “Governor Tiff Macklem and his colleagues are set to leave the interest rate unchanged at 0.25% but may lay out hints about future policy via their quarterly Monetary Policy Report (MPR) which includes new forecasts. Graphs such as these will likely be on their minds.” “If the BOC releases cautious forecasts that point to a slower recovery – and also accompanies it by stating uncertainty is high – the loonie would fall and USD/CAD would rise. This scenario has the highest probability.” “If Macklem and co. strike a balance between recent growth and slower yet acceptable levels of recovery afterward, USD/CAD could chop around and swiftly return to moving on other factors such as the general market mood and oil prices. Barrel prices have been remarkably stable of late.”  “In the unlikely case that the bank focuses on the bouncing labor market and conveys an upbeat message, USD/CAD would fall.”

The European Commission has urged the EU governments to step up the response to the coronavirus pandemic amid the alarming spike in infections, Reuter

The European Commission has urged the EU governments to step up the response to the coronavirus pandemic amid the alarming spike in infections, Reuters reported on Wednesday. Key takeaways "EU Commission calls for coordinated testing strategies in EU states, recommends the use of antigen tests." "EU extends to April 2021 suspension of customs duties, sales tax on import of medical equipment." "EU states could exempt from sales tax COVID-19 testing kits and vaccines." "EU Commission launches new joint procurement for medical equipment for vaccination, such as syringes, disinfectants." "EU Commission proposes fast-track border checks within the EU for goods transported on rail, water, flights." "EU Commission makes available nearly 2,5 billion euros for upfront payments to secure potential COVID-19 vaccines." Market reaction This headline doesn't seem to be having a significant impact on the shared currency's market valuation. As of writing, the EUR/USD pair was down 0.46% on the day at 1.1740.

S&P 500 stays critically placed on its 63-day average at 3391, a close below which should clear the way for further near-term weakness as well as rein

S&P 500 stays critically placed on its 63-day average at 3391, a close below which should clear the way for further near-term weakness as well as reinforce a broader sideways range into the US election, with key support seen starting at 3324 and stretching down to 3298/96. The VIX spotlight turns to key resistance at 37.20/38.28, above which would see a significant base established to mark a more concerning rise in volatility and likely market weakness, per Credit Suisse. See – 2020 US Elections: S&P 500 to dive to 3100 in early January on a Blue Wave – Morgan Stanley Key quotes “The S&P 500 stays critically placed, sitting right on its 63-day average at 3391 and with support from the ‘neckline’ to the ‘head & shoulders’ base removed the immediate risk is seen lower.” “A close below 3391 should confirm the base has indeed been neutralized to reassert the sideways range from the early September peak with support then seen next at 3365 ahead of the late September price gap, starting at 3324 and stretching down to 3298/96, also the uptrend from mid-June. We would look for a fresh floor here.” “Near-term resistance stays seen at 3410/15, then the 13-day average and short-term downtrend at 3436/41, which we look to cap. Above 3466 though stays needed to reassert a positive tone, with resistance then at 3516/18.”  “The VIX has surged higher to turn the spotlight on key trend/price resistance at 37.00/38.28. A close above here would see a base complete to warn of a more significant rise in volatility and accompanying fall in the market itself.”  

DXY extends the upside and flirts with the key 6-month resistance line in the 93.30/40 band following the optimism observed in the first half of the w

DXY adds to recent gains above the 93.00 mark.Next target of relevance emerges at the 93.90 level.DXY extends the upside and flirts with the key 6-month resistance line in the 93.30/40 band following the optimism observed in the first half of the week, all amidst increasing risk aversion among market participants. If the buying impetus picks up extra pace, then the next hurdle of note is expected at the monthly peak at 93.90 (October 15) ahead of the interim resistance at the Fibo level at 94.20 and the 100-day SMA, today at 94.34. While below the 200-day SMA, today at 96.66, the negative view on the dollar is expected to persist. DXY daily chart  

Ireland Retail Sales (MoM) climbed from previous 1.3% to 1.5% in September

Ireland Retail Sales (YoY) increased to 9.7% in September from previous 9.1%

The EUR/JPY pair came under heavy bearish pressure on Wednesday and slumped to its lowest level since mid-July at 122.20. As of writing, the pair was

EUR/JPY is falling sharply during the European session.Major European equity indexes are suffering heavy losses.Investors remain cautious amid concerns over nationwide lockdowns.The EUR/JPY pair came under heavy bearish pressure on Wednesday and slumped to its lowest level since mid-July at 122.20. As of writing, the pair was down 0.74% on the day at 122.22. JPY gathers strength on safe-haven flows Heightened fears over major European economies imposing nationwide lockdowns to limit the spread of the coronavirus continue to weigh on the sentiment. Earlier in the day, Germany reported its highest one-day increase of 14,964 in confirmed COVID-19 infections and Chancellor Angela Merkel is reportedly planning to introduce strict restriction measures. Additionally, French President Emmanuel Macron is scheduled to deliver a statement later in the day as the country struggles to control the spread of the virus despite the nightly curfews that were put in place last week. On Tuesday, France reported 33,417 new confirmed cases with 523 fatalities and the UK reported 22,885 new infections.  The risk-averse market environment is also reflected upon the major European equity indexes. At the moment, Germany's DAX 30 Index is down 3.3% on the day and the Euro Stoxx 50 is down 2.7%. Meanwhile, the 10-year US Treasury bond yield is falling for the fourth straight day on Wednesday, confirming the flight to safety and providing an additional boost to the JPY. In the second half of the day, EUR/JPY could extend its slide if Wall Street's main indexes fall sharply as suggested by the heavy losses seen in the US stock futures. Technical levels to watch for  

EUR/USD navigates the area of fresh multi-day lows in the 1.1740 region on the back of the persistent investors’ preference for the safe havens in lig

EUR/USD extends the downside well below the 1.18 mark.Bets for a deeper retracement to 1.17 keep rising.EUR/USD navigates the area of fresh multi-day lows in the 1.1740 region on the back of the persistent investors’ preference for the safe havens in light of the prevailing risk aversion context. The continuation of this trend seems probable in the very near-term, allowing for a potential visit to the key contention area in the 1.1700 neighbourhood ahead of the monthly lows in the 1.1690/85 band (October 15). Further south comes in the September’s low near 1.1610, although such a move would initially require further deterioration of the outlook on either the euro or the fundamentals of the region. EUR/USD daily chart  

The Canadian dollar continues to outperform amongst G10 currencies with USD/CAD still threatening to break below the 1.3000-level ahead of the US Pres

The Canadian dollar continues to outperform amongst G10 currencies with USD/CAD still threatening to break below the 1.3000-level ahead of the US Presidential election. The Bank of Canada (BoC) policy update should be modestly CAD supportive, according to economists at MUFG Bank. More: BoC Preview: Yield curve control is a risk for the loonie – TDS Bank of Canada Preview: Seven major banks expectations Key quotes “According to our calculations, the Canadian dollar has displayed the most bullish momentum over both the last three weeks and three months. However, we would argue that upward momentum is not stretched enough to provide a strong signal that there’s a high risk of a reversal lower.” “The most likely scenario in the run-up to the US Presidential election is that USD/CAD continues to consolidate between 1.3000 and 1.3400. We do not expect today’s BoC meeting to reinforce the Canadian dollar’s upward momentum sufficiently for USD/CAD to break below 1.3000.” “The Canadian dollar’s upward momentum has been supported by the robust initial bounce back for Canada’s economy following the COVID-19 shock. Consensus forecasts for GDP growth in Q3 have risen to an annualized rate of 45% although the pace of growth is then expected to ease back to around 6% in Q4. We expect the BoC to acknowledge the stronger economic recovery at today’s policy meeting.” “The aggressive fiscal response and strong bounce back for Canada’s economy have eased some of the pressure on the BoC to deliver further stimulus. There has been no strong indication from the BoC it is ready to step up QE from the current pace of just over CAD5 billion/week. Those favourable developments continue to encourage a stronger Canadian dollar. However, we would caution that the loonie strength relative to the US dollar is starting to look overdone based on short-term fundamental drivers such as the price of oil and yield spreads. As a result, USD/CAD should continue to find it difficult to break below 1.3000.”   

United States MBA Mortgage Applications increased to 1.7% in October 23 from previous -0.6%

United Kingdom 10-y Bond Auction fell from previous 0.313% to 0.244%

Quek Ser Leang at UOB Group’s Global Economics & Markets Research reviewed the prospects for the US Dollar Index (DXY). Key Quotes “In our Chart of th

Quek Ser Leang at UOB Group’s Global Economics & Markets Research reviewed the prospects for the US Dollar Index (DXY). Key Quotes “In our Chart of the Day from about one month ago, 23 Sep 20 (when USD Index was trading at 94.15), we highlighted that ‘the early September low of 91.75 is a significant bottom and this level may not come back into the picture within these couple of months’. We added, if USD Index were to break the critical resistance levels between 94.70 and 94.90, it could potentially lead to a relatively large corrective rebound.” “USD Index subsequently rose as expected but was unable to break the top of the Ichimoku cloud at 94.90 (high has been 94.74). Since then, USD Index drifted lower and touched 92.47 last Wednesday (21 Oct). In other words, our expectation for a strong ‘corrective rebound’ did not materialize. Instead, we now view the current movement in USD Index as part of a consolidation phase and it could trade within September’s range of 91.75/94.74 for a period of time.” “On a shorter-term note, the bias is tilted to the downside but momentum is not strong for now and the prospect for a clear break below 91.75 is low. On the upside, a break above 93.50 would indicate that USD Index could edge higher towards 93.90.”

The selling momentum in EUR/JPY gathers further steam and forces the cross to break below the key support at 123.00 the figure and print at the same t

EUR/JPY accelerates the downside below the 123.00 mark.Further south comes in the 200-day SMA near 121.10.The selling momentum in EUR/JPY gathers further steam and forces the cross to break below the key support at 123.00 the figure and print at the same time new multi-day lows. The continuation of the current leg lower opens the door to a deeper pullback to, initially, the 200-day SMA around 121.10. This view carries the potential of challenging the so far constructive view on EUR/JPY. Looking at the broader scenario, while above the 200-day SMA at1 121.12, the outlook on the cross is expected to remain constructive. EUR/JPY daily chart  

The EUR/GBP cross continued showing some resilience at lower levels and staged a goodish intraday bounce of over 50 pips from weekly lows. The emergen

EUR/GBP once again managed to attract some dip-buying ahead of the 0.9000 mark.The formation of a descending triangle, neutral oscillators warrant caution for bulls.The EUR/GBP cross continued showing some resilience at lower levels and staged a goodish intraday bounce of over 50 pips from weekly lows. The emergence of some dip-buying reinforced a strong horizontal support ahead of the key 0.9000 psychological mark. This, along with a short-term descending trend-line resistance constitutes the formation of a bearish descending triangle. Adding to this, the recent failures to find acceptance above the 0.9100 round-figure mark warrants some caution for bullish traders. Moreover, neutral technical indicators on 4-hourly/daily charts are yet to confirm any firm near-term direction. This makes it prudent to wait for some follow-through buying before positioning for any further gains. That said, a sustained move beyond the triangle resistance, around the 0.9065 region, will still be seen as a fresh trigger for bullish traders. The EUR/GBP cross might then accelerate the positive move towards the 0.9145-50 supply zone. Some follow-through buying should assist bulls to aim back towards reclaiming the 0.9200 round-figure mark. On the flip side, the 0.9015 horizontal zone might continue to protect the immediate downside. A sustained breakthrough will negate any near-term bullish bias and turn the EUR/GBP cross vulnerable to extend its recent pullback from the 0.9300 neighbourhood. EUR/GBP 1-hourly chart Technical levels to watch  

After spending the Asian session around 0.6700, the NZD/USD pair lost its traction and dropped to its lowest level in five days at 0.664. As of writin

NZD/USD came under heavy bearish pressure during European session.US Dollar Index edges higher toward 93.50 on Wednesday.Trade Balance will be the only data featured in the US economic docket.After spending the Asian session around 0.6700, the NZD/USD pair lost its traction and dropped to its lowest level in five days at 0.664. As of writing, the pair was down 0.6% on the day at 0.6667. USD continues to capitalize on safe-haven flows The intensifying flight to safety seems to be helping the greenback find demand and outperform its rivals on Wednesday. The surging number of coronavirus cases in Europe, fading hopes of a stimulus deal in the US continue to weigh on sentiment. The US Dollar Index, which closed a little above 93.00 on Tuesday, was last seen gaining 0.28% on the day at 93.35. Reflecting the risk-averse market environment, major European equity indexes are down between 1.4% and 2.75%, while the S&P 500 futures are losing 1.3%, suggesting that Wall Street is poised to open deep in the negative territory. Later in the day, September Trade Balance data will be featured in the US economic docket. However, investors are likely to ignore this report and remain focused on risk perception. In the early trading hours of the Asian session on Thursday, the ANZ will release the Business Confidence and Activity Outlook data for October. Technical levels to watch for  

GBP/USD has fallen sharply, crashing below uptrend support, as the UK's coronavirus situation echoes the worst of the pandemic. The Brexit impasse and

GBP/USD has fallen sharply, crashing below uptrend support, as the UK's coronavirus situation echoes the worst of the pandemic. The Brexit impasse and US elections uncertainty is also weighing on the pound while Wednesday's 4-hour chart is pointing to further falls, FXStreet’s Analyst Yohay Elam briefs. Key quotes “Britain is gripped by a severe second wave of coronavirus and Prime Minister Boris Johnson is under pressure to issue a second national lockdown – and that is weighing heavily on sterling. The UK reported nearly 23,000 new confirmed cases on Tuesday, and 367 deaths – the latter being the highest level since late May. The PM seems reluctant to slap a national lockdown that would hurt the economy. However, the rapidly deteriorating situation and the fact that France and Germany are mulling similar measures may tip the scales.” “While Chief EU Negotiator Michel Barnier extended his stay in London, these negotiations have yet to deliver a breakthrough. Charles Michel, the President of the European Council, said that both sides are at a ‘most difficult spot.’ Investors know that the only genuine deadline is December 31 but the diminishing hopes seem to hit sterling when it is down.”  “With six days to go, over 70 million Americans – more than half of last time's total vote count – have already cast their ballots. President Donald Trump continues trailing rival Joe Biden but seems to have made some headway in Florida, the perennial swing state. Markets are worried about a contested election and also worry that a split Congress would fail to pass the meaningful stimulus. New national, state, and Senate polls will be closely watched and could swing markets later in the day.”  “Pound/dollar has collapsed below the uptrend support line that accompanied it since mid-October and has pierced the 50 and 100 Simple Moving Averages on its way down. Momentum is to the downside while the Relative Strength Index is still above 30, thus outside oversold conditions.”  “Support awaits at 1.2910, which was a low point last week. It is followed by 1.2865, a double-bottom seen earlier in the month. Resistance is at 1.2985, which worked as support last week. It is followed by 1.3020, which capped cable earlier.”  

Risk aversion dominates the financial world this Wednesday, sending USD/JPY to a fresh October low of 104.15, as coronavirus-related lockdown are push

Risk aversion dominates the financial world this Wednesday, sending USD/JPY to a fresh October low of 104.15, as coronavirus-related lockdown are pushing investors into safety, FXStreet’s Chief Analyst Valeria Bednarik reports. See: USD/JPY at risk of losing the 104.00 psychological mark – Commerzbank Key quotes “After the WHO declared that the epicenter of the coronavirus pandemic has moved back to Europe, there are several market talks indicating national lockdowns coming to the Old Continent. France, the Netherlands and the UK are those studying the tougher measures, but restrictions may also come to Germany and other countries.” “Technical readings in the 4-hour chart suggest that the USD/JPY pair will extend its decline, as the Momentum indicator heads firmly lower within negative levels, while the RSI indicator hovers around 30, with a modest bearish slope. In the mentioned time frame, the pair is trading below bearish moving averages, with the 20 SMA around 104.65.”  “A steeper decline could be expected on a clear break below 103.99, the September monthly low.”  

Economists at TD Securities look for the Bank of Canada (BoC) to keep rates unchanged while maintaining a cautious tone in the October policy statemen

Economists at TD Securities look for the Bank of Canada (BoC) to keep rates unchanged while maintaining a cautious tone in the October policy statement. The loonie should take its cue from the broad USD and risk sentiment. A cautious BoC and potential Yield Curve Control (YCC), alongside a long build and modest overvaluation suggests that the CAD has some ground to lose. See – Bank of Canada Preview: Seven major banks expectations Key quotes “Hawkish (10%): Could have been worse. Economy has outperformed central scenario from July, large (2pp) upgrade to 2020 GDP, 2021 unchanged. A larger supply-side impact will pull forward closing of the output gap. Forward guidance and QE unchanged. GDP deceleration expected as the economy moves into recuperation, second lockdown still a tail risk. Monitoring financial stability risks. USD/CAD at 1.3130.” “Base Case (60%): Not out of woods yet. Economy has outperformed the central scenario from July; a large (2pp) upgrade to 2020 GDP but 2021 downgraded. Statement flags more challenging recovery from here, fragile consumer and business sentiment. Forward guidance and QE unchanged. 1st stage of recovery better than expected, but rising COVID-19 infections a threat. Current outlook does not support expansion of stimulus/YCC, but QE can be calibrated in response to market conditions if needed. USD/CAD at 1.3220.” “Dovish (30%): Enter YCC. Strong initial recovery in the rearview, next phase will be more difficult with COVID-19 infections rising. Fiscal policy supporting growth but low inflation/excess supply suggest more needs to be done. 1st stage of recovery better than expected but outlook for 2020Q4/beyond has deteriorated and inflation pressures remain muted. YCC to target either the 10 or 30-year point. USD/CAD at 1.3280.”  

The USD buying interest picked up pace since the early European session and pushed the USD/CAD pair to near two-week tops, closer to mid-1.3200s in th

A combination of supporting factors assisted USD/CAD to gain strong traction on Wednesday.Coronavirus jitters weighed on investors’ sentiment and drove haven flows towards the USD.A steep fall in oil prices undermined the loonie and remained supportive ahead of the BoC.The USD buying interest picked up pace since the early European session and pushed the USD/CAD pair to near two-week tops, closer to mid-1.3200s in the last hour. Following a brief consolidation earlier this Wednesday, the pair caught some aggressive bids and built on the previous day's late rebound of around 40 pips from the 1.3142 area. The strong move up was sponsored by a combination of factors – resurgent US dollar demand and tumbling crude oil prices. Concerns that the continuous surge in new coronavirus cases will prompt fresh lockdown measures and hinder the already tepid recovery took its toll on the global risk sentiment. This was evident from a selloff in the equity markets, which forced investors to take refuge in the safe-haven greenback. Meanwhile, the second wave of COVID-19 infections globally fanned fears of weaker fuel demand. This, along with the anti-risk flow triggered a fresh leg down in oil prices, which undermined the commodity-linked currency – the loonie – and provided an additional boost to the USD/CAD pair. Apart from this, possibilities of some short-term trading stops being triggered above the 1.3200 round-figure mark further contributed to the USD/CAD pair's bullish momentum. It, however, remains to be seen if bulls are able to capitalize on the move or opt to take some profits off the table. Wednesday's key focus will be on the latest monetary policy update by the Bank of Canada (BoC), due later during the early North American session. The BoC is not expected to announce any major policy shift. Hence, the updated economic projection and the post-meeting press conference might assist investors to determine the next leg of a directional move for the USD/CAD pair. Technical levels to watch  

Elections have consequences, but they may not be immediately clear to markets. Economists at Morgan Stanley look at the risks and opportunities in fou

Elections have consequences, but they may not be immediately clear to markets. Economists at Morgan Stanley look at the risks and opportunities in four possible US election outcomes, a Blue Sweep, in which Democrats win the White House and both chambers of Congress; a Blue Tide, with Democrats winning all but the Senate; a Thin Red Line, with Republicans winning all but the House; and a Red Redux, in which Republicans take all. Ultimately, the best outcome for investors may be a unified government, be it Democratic or Republican.  Key quotes “The S&P 500 would sink to 3100 between the election and the presidential inauguration in early January, given a Blue Sweep, versus 3600 for a Red Redux or roughly 3400 for the two other scenarios.” “Looking at equities elsewhere, overseas markets would likely see an immediate lift, if the election puts Democrats in control. A Blue Sweep could particularly favor European equities because, among other reasons, investors are likely to view Europe as a good relative value in light of increased US fiscal spending and tax policy reform.” “A Democratic sweep may also benefit emerging market equities, given its association with expectations for more infrastructure spending and rising long-end yields. One notable exception is Russia, which could face oil-price downside and rising investor concern about Russia-specific sanctions risks.” “In the event of a Republican sweep, equity markets could respond favorably, with the S&P 500 rising from current levels between the election and the inauguration. Telecoms, US energy and asset managers would likely get a boost from expectations for continued deregulation.” “European equities may also rally on a Red Redux, with healthcare stocks leading the way. Longer-term, however, the relative case for Europe and other global markets might not be as favorable under this scenario, compared with a Blue Sweep.” “If the election yields a divided government, investors should plan for market detours in many asset classes. In a Blue Tide or Thin Red Line, the S&P 500 could hover around current levels on Inauguration Day. Over the longer-term, however, divided power may carry more risk, particularly for credit and equities.”  

Silver (XAG/USD) is trading in a familiar range so far this Wednesday, defending the $24 mark while the bears look to extend control in the near-term.

Silver looks to extend losses while clinging onto 21-DMA.XAG/USD charted symmetrical triangle breakdown on the daily chart. Downside appears more compelling amid bearish RSI. Silver (XAG/USD) is trading in a familiar range so far this Wednesday, defending the $24 mark while the bears look to extend control in the near-term. The spot is clinging onto the 21-daily moving average (DMA) at $24.25, awaiting a fresh catalyst to resume the move lower. It's worth noting that the price charted a symmetrical triangle breakdown on the daily chart last Monday, having closed the day below the rising trendline (pattern) support, then at $24.51. On a fresh selling wave, the white metal is likely to test the 100-DMA support at $23.41. A break below the latter could expose the September 24 low of $21.65. The daily Relative Strength Index (RSI) inches lower, below the midline, at 46.81, pointing towards the additional downside. To the upside, the pattern support-turned-resistance, now at $24.76, needs to be scaled, in order to trigger a pullback towards the $25 mark. XAG/USD: Daily chart
XAG/USD: Additional levels  

Italy Producer Price Index (MoM) above forecasts (-0.4%) in September: Actual (0.1%)

Italy Producer Price Index (YoY) came in at -3.1%, below expectations (-2%) in September

EUR/USD is under pressure as Europe's coronavirus situation is deteriorating rapidly while uncertainty about the US elections is boosting the safe-hav

EUR/USD is under pressure as Europe's coronavirus situation is deteriorating rapidly while uncertainty about the US elections is boosting the safe-haven dollar. Wednesday's 4-hour chart is painting a bearish picture, with another support line at risk, FXStreet’s Analyst Yohay Elam informs. Key quotes “Europe's largest countries are set to announce new measures as COVID-19 cases, hospitalizations, and deaths are rising quickly, and the euro is suffering. French President Emmanuel Macron is scheduled to address the nation at 19:00 and possibly announce a month-long lockdown. German Chancellor Angela Merkel is also mulling new measures, potentially leaving schools open but shuttering other activities. The ‘locomotive’ of the eurozone has already been slowing down, and another setback is due.”  “Recent opinion polls have continued showing President Donald Trump trailing behind challenger Joe Biden, yet the surprise from four years ago is on investors' minds. Tighter polls in Florida and North Carolina, published on Tuesday, provide a reminder that the race is decided in several battleground states rather than at the national level. The Economist's model is showing Trump as having only a 5% chance of winning. The battle for the Senate is closer, with Dems' probability at around 73%. Control of the upper chamber is critical for passing a generous stimulus package that markets crave for.” “Euro/dollar dropped below the 50, 100, and 200 Simple Moving Averages on the 4-hour chart and suffers from downside momentum. The Relative Strength Index is still above 30, thus outside oversold conditions.”  “Support awaits at 1.1745, which was a swing high in mid-October. It is followed by 1.1720, which was a low wing beforehand. The critical cushion is 1.1685, which is a double-bottom, last seen ten days ago. Resistance is at 1.1785, which provided support last week. It is followed by this week's stubborn cap of 1.1840, and then by 1.1880.”  

Economist at UOB Group Ho Woei Chen, CFA, assessed the prospects of GDP growth for the current year in South Korea. Key Quotes “South Korea’s advance

Economist at UOB Group Ho Woei Chen, CFA, assessed the prospects of GDP growth for the current year in South Korea.   Key Quotes   “South Korea’s advance 3Q20 GDP bounced back to positive sequential growth at seasonally adjusted 1.9% quarter-on-quarter… after two preceding quarters of contraction. On a year-on-year (y/y) comparison, the economy remained in contraction at -1.3% in 3Q20… the main drags came from private consumption (-2.2% point) and inventories (- 0.9% point) while positive contributions to the headline y/y GDP were seen from capital investment (+0.8% point), government spending (+0.7% point) and net exports (+0.3% point).”   “Overall, the recovery in 3Q20 was supported by the large fiscal response, including the 4th supplementary budget (KRW7.8 trillion) that was passed in late-September. The four supplementary budgets introduced since March have totaled KRW66.8 trillion (3.4% of GDP), on top of the financial support package and jobs programs. Worries over a fresh round of the pandemic outbreak will continue to hamper the private consumption recovery. The seasonallyadjusted unemployment rate came off a high of 4.5% in May to 3.9% in September aided by the government’s support measures but is likely to remain elevated for the rest of the year.”   “While South Korea economy may have seen the worst, the recovery will continue to be slow given the pandemic threat and that major economies in Europe and the US are still battling the COVID-19 outbreak. We expect the recovery momentum to remain in place but GDP will likely remain in y/y contraction in 4Q20. Assuming no major changes to the advance 3Q20 GDP, our revised outlook is at -0.6% y/y for 4Q20 with full-year GDP contraction at -0.8% compared to -1.3% previously. We maintain our forecast for a recovery in growth to 3.5% in 2021 as the COVID-19 pandemic comes under control leading to resumption in businesses and travel.”

The economy likely grew by around 6% in the third quarter but the recovery appears faltering, according to the latest report published by Germany’s ec

The economy likely grew by around 6% in the third quarter but the recovery appears faltering, according to the latest report published by Germany’s economic institute DIW on Wednesday. Key quotes “Economic output will likely increase slightly towards the end of the year.” “The recovery from the coronavirus crisis seen over the summer will probably slow as a second COVID-19 outbreak hits Europe's biggest economy.” Earlier today, Bild newspaper reported that German Chancellor Angela Merkel is set to agree to close all restaurants and bars from November 4, in a bid to curb coronavirus infections, when she meets the state premiers later on Wednesday. EUR/USD tumbles to multi-day lows near 1.1750

The selling bias in the single currency gathers extra pace and drags EUR/USD to fresh multi-day lows in the mid-1.1700s on Wednesday. EUR/USD looks of

EUR/USD quickly drops to the 1.1750 region on Wednesday.Risk aversion picks up pace and supports the dollar.France’s Consumer Confidence ticked lower to 94 in October.The selling bias in the single currency gathers extra pace and drags EUR/USD to fresh multi-day lows in the mid-1.1700s on Wednesday. EUR/USD looks offered ahead of the ECB EUR/USD loses ground for the third consecutive session and at the same time breaks below the multi-session consolidate theme above the 1.18 mark observed in the last couple of weeks. The pick-up in the risk aversion continues to lend support to the greenback so far this week amidst rising fears of the impact of the second wave of the coronavirus pandemic on the economy, all in light of renewed and increasing restriction measures across Europe. The euro also stays under pressure ahead of the key ECB event on Thursday amidst rising speculations of the dovish message from the central bank. Earlier in the euro docket, France’s Consumer Confidence ticked a tad lower to 94 for the month of October, although it came in above estimates. In Germany, Import Prices surprised to the upside and rose 0.3% MoM in September and contracted 4.3% from a year earlier. Across the pond, weekly MBA’s Mortgage Applications is due seconded by advanced Trade Balance figures and the EIA’s weekly report on crude oil stockpiles. What to look for around EUR EUR/USD loses momentum and retests the 1.1750 region against the backdrop of a persistent inflows into the safe haven universe. The outlook on EUR/USD remains positive, however, and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), the so far cautious stance from the ECB and the solid position of the EMU’s current account. In addition, the probable “blue wave” following the US elections is deemed as a negative driver for the greenback and carries the potential to lend extra legs to the pair in the longer run. EUR/USD levels to watch At the moment, the pair is losing 0.36% at 1.1752 and faces the next support at 1.1688 (monthly low Oct.15) followed by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9). On the other hand, a breakout of 1.1880 (monthly high Oct.21) would target 1.1917 (high Sep.10) en route to 1.1965 (monthly high Aug.18).

Gold edged lower during the first half of the European trading session and was last seen trading near daily lows, just above the $1900 level. The prec

A strong pickup in the USD demand exerted fresh pressure on the dollar-denominated commodity.A selloff in the equity markets might lend some support to the safe-haven gold and help limit losses.Bearish traders might wait for a sustained break below 100-day SMA before placing aggressive bets.Gold edged lower during the first half of the European trading session and was last seen trading near daily lows, just above the $1900 level. The precious metal witnessed some fresh selling on Wednesday and reversed the previous day's positive move, albeit remained well within a four-day-old trading range. A strong pickup in the US dollar demand was seen as a key factor exerting some pressure on the dollar-denominated commodity. The alarming pace of growth in new coronavirus cases and the imposition of fresh lockdown restrictions fueled concerns that the economic growth will weaken again. This, along with the uncertainty about the actual outcome of the US election, forced investors to unwind their USD bearish bets. Apart from this, the lack of progress in the US stimulus talks further dampened the market mood. This was evident from a steep decline in the equity markets. The anti-risk flow did little to revive the precious metal's safe-haven demand, albeit could possibly help limit any deeper losses. Moreover, growing wariness about the US presidential election might further help limit any large movements and extend some support to the XAU/USD. This makes it prudent to wait for some strong follow-through selling before positioning for any further near-term depreciating move. From a technical perspective, any meaningful slide below the $1900 mark is more likely to attract some buying near 100-day SMA. The latter is currently pegged near the $1886-85 region, which if broken decisively will be seen as a fresh trigger for bearish traders and prompt some technical selling. There isn't any major market-moving economic data due for release on Wednesday. Hence, the broader market risk sentiment, developments surrounding the coronavirus saga, along with the USD price dynamics will be looked upon to grab some short-term trading opportunities. Technical levels to watch  

WTI (futures on NYMEX) remains heavy in the European session this Wednesday, trading close to the weakest levels in three weeks reached at 37.92. The

WTI dives on demand concerns as coronavirus cases surge in the EU. Potential lockdowns in Germany, France hit risk sentiment. API crude stocks build raise oversupply fears, EIA data in focus. WTI (futures on NYMEX) remains heavy in the European session this Wednesday, trading close to the weakest levels in three weeks reached at 37.92. The US oil is down about 4%, as we write, looking to extend the sell-off amid broad risk-aversion across the financial markets. Surging coronavirus cases on both sides of the Atlantic coupled with potential nationwide lockdowns likely to be announced in France and Germany to contain the contagion almost killed the demand for higher-yielding assets such as oil. Meanwhile, the lockdown fears in the EU re-ignited demand concerns for oil and its product, collaborating with the downside in the black gold. Exacerbating the pain in the WTI barrel, the US weekly crude stockpiles data, published by the American Petroleum Institute (API), showed a bigger-than-expected rise in the crude stocks last week. Rising US crude supplies and a rebound in the Libyan oil production raise oversupply fears, rendering oil-negative once again. Oil traders eagerly await fresh virus stats from across the globe and the Energy Information Administration’s (EIA) US crude stocks change data for near-term trading opportunities. WTI technical levels  

On Wednesday, October 28 the Bank of Canada (BoC) is set to leave its interest rate unchanged at 0.25% and publish new forecasts in its quarterly Mone

On Wednesday, October 28 the Bank of Canada (BoC) is set to leave its interest rate unchanged at 0.25% and publish new forecasts in its quarterly Monetary Policy Report at 14:00 GMT. Governor Tiff Macklem and his colleagues will likely address the impact of coronavirus concerns on the economy. As we get closer to the release time, here are the expectations as forecasted by the economists and researchers of seven major banks, regarding the upcoming announcement. The USD/CAD pair is trading with a mild positive bias above the 1.32 ahead of the event. ING “The Bank of Canada policy meeting will deliver no additional stimulus with the policy rate left at 0.25%. The economy likely expanded at an annualised rate in excess of 40% in 3Q20 having contracted 38.7% in 2Q20 while the labour market has seen nearly 2.3 million of the 3 million jobs lost in March and April recovered. Inflation remains low though and like the US Federal Reserve, we expect Canada's central bank communique to stress there is little prospect of any policy tightening anytime soon.” TDS “We expect the overnight rate to remain unchanged at 0.25% with no substantive change to the Bank's forward guidance, but the October MPR will be an important demarcation point as the Bank sets out its path for 2021 and beyond.” NBF “With the economy still in need of stimulus, and with policymakers reluctant to bring their main tool into negative territory, we expect rates to remain at the effective lower bound. Turning to QE, the current C$5 billion weekly purchase pace is proportionally much more aggressive than what the US Federal Reserve Board is doing. While we understand the merits and benefits of the program, it’s not necessarily apparent that an already elevated BoC ownership share needs to continue to march higher, particularly if it means distorting/impairing secondary liquidity. The obvious question that follows is: when should the BoC taper? To us, an announcement at next week’s monetary policy meeting wouldn’t come as a huge surprise. The central bank may also choose to wait for the Federal government’s fiscal update this fall, which promises to set out not just a near-term deficit target but medium-term thinking on Ottawa’s fiscal path. If super-sized deficits are with us for longer, then the case for maintaining QE closer to the current pace would presumably hold more weight.” RBC Economics “We expect the central bank to bump up its Q3 GDP growth assumptions in the Monetary Policy Report update Wednesday. More attention will be paid to the bank’s expectations for the economy beyond that given the resurgence in COVID-19 – and certainly, there are limits to how much it can recover while the threat of the virus remains. The central bank assumed a 2% increase in Q4 GDP in their last ‘central tendency’ forecast, slightly above our own current tracking for a 1% increase. The early recovery in consumer spending was supported by unprecedented amounts of fiscal and monetary stimulus. And low-interest rates have clearly played a role in the rebound in housing markets. But the recovery in spending on services has been much slower, and that has also been weighing on inflation. We expect the BoC to remain focused on economic growth rather than near-term inflation concerns, and look for exceptionally low-interest rates to be maintained for the foreseeable future.” CIBC “The BoC has shown no inclination to try an even lower policy rate. While there’s a case to be made for dialing back the volume of QE, they likely won’t want to risk announcing anything that could be perceived as reducing stimulus until the virus calms down a bit. Look for just some tinkering with the list of what they buy in the market.”  Rabobank “We expect the Bank of Canada to leave the policy rate unchanged at 0.25%. We expect the policy rate to remain at 0.25% at least through 2022. Bond purchases are likely to remain at a minimum of CAD5 B a week but we remain of the view that this might need to be increased further down the line. This decision will be accompanied by a new Monetary Policy Report outlining the Bank’s latest economic projections. We do not expect any fireworks at this week’s meeting and with rates at the front-end of the curve effectively anchored for at least the next couple of years, rate differentials are unlikely to prove a driver of USD/CAD anytime soon. Broad-based risk sentiment remains the key driver of USD/CAD which leaves the BoC sitting in the backseats of the USD/CAD car rather than actually driving the vehicle.” Citibank “Citi analysts do not expect any change. Citi’s base case is that BoC’s next step will likely be to remove accommodation.”  

As the risk-off mood intensifies in the European session amid fresh lockdowns likely to be imposed in France and Germany, the safe-haven US dollar gai

AUD/USD falls back to 100-DMA support, 50-DMA caps the upside. US dollar gains further ground as risk-aversion deepens. Traders await fresh cues for a break in either direction. As the risk-off mood intensifies in the European session amid fresh lockdowns likely to be imposed in France and Germany, the safe-haven US dollar gains further ground against the higher-yielding assets such as the AUD. Therefore, AUD/USD shaved-off early advance to near the 0.7160 region and fell back to the 100-daily moving average (DMA) support at 0.7110. Upbeat Australian Q3 CPI data fails to offer any respite to the AUD bulls. The latest leg down caused the pair to pierce through the 21-DMA cushion, placed at 0.7138. Sellers need an entry below the 100-DMA barrier, which continues to support the prices for last four trading sessions. On the flip side, the aussie could retest the 21-DMA support-turned-resistance if the bulls fight back control. The next critical resistance is seen at the horizontal 50-DMA at 0.7193. The 14-day Relative Strength Index (RSI) trades flat on the midline, suggesting a lack of clear directional bias in the near-term.   Markets await a strong catalyst for the major to break free from the weekly trading range. AUD/USD: Daily chart AUD/USD: Additional levels  

Italy Trade Balance non-EU dipped from previous €6.69B to €5.32B in August

Austria Purchasing Manager Index: 54 (October) vs 51.7

Switzerland ZEW Survey – Expectations registered at 2.3, below expectations (35.2) in October

The GBP/USD pair witnessed some heavy selling during the early European session and slipped below the key 1.3000 psychological mark, refreshing weekly

GBP/USD came under some renewed selling pressure on Wednesday and refreshed weekly lows.Coronavirus jitters drove haven flows towards the greenback and exerted some heavy pressure.Brexit-related uncertainties took its toll on the British pound and further added to the selling bias.The GBP/USD pair witnessed some heavy selling during the early European session and slipped below the key 1.3000 psychological mark, refreshing weekly lows in the last hour. The pair continued with its struggle to gain any meaningful traction and was being capped by a combination of factors. The impasse on the matter of the future access of EU fishing fleets to UK waters has dampened prospects for an immediate breakthrough in Brexit talks. This, in turn, took its toll on the British pound. On the other hand, the US dollar drove some aggressive haven flows amid growing market worries about an alarming pace of growth in news coronavirus cases in the US and Europe. Investors seem worried that renewed lockdown measures to curb the second wave of COVID-19 infections could prove detrimental for the already fragile global economy. Apart from this, the disappointment over the next round of the US fiscal stimulus measures and the US political uncertainty dented the global risk sentiment. This was evident from a steep decline in the US equity futures, which forced investors to take refuge in traditional safe-haven assets and provided an additional boost to the greenback. With the latest leg down, the GBP/USD pair now seems to have found acceptance below 200-hour SMA and seems vulnerable to slide further. Hence, some follow-through weakness towards intermediate support near the 1.2945 horizontal level, en-route the 1.2900 mark, looks a distinct possibility amid absent relevant market moving economic releases. Technical levels to watch  

FX Strategists at UOB Group believe USD/CNH’s rebound could extend to the 6.7450 level in the next weeks. Key Quotes 24-hour view: “We highlighted yes

FX Strategists at UOB Group believe USD/CNH’s rebound could extend to the 6.7450 level in the next weeks. Key Quotes 24-hour view: “We highlighted yesterday that ‘while overbought, the rapid advance has room to test 6.7200 first before a more sustained pullback can be expected’. We added, ‘the next resistance at 6.7450 is unlikely to come under threat’. USD subsequently popped to a high of 6.7236, dropped back down to 6.6932 before snapping back up. Upward momentum is strong and USD could strengthen further even though overbought conditions suggest that a sustained rise above 6.7450 is unlikely (minor resistance is at 6.7330). On the downside, a break of 6.6890 would indicate that the current upward pressure has eased (minor support is at 6.6950).” Next 1-3 weeks: “We have held a negative view in USD since early last week. As USD rebounded after touching a low of 6.6275, we highlighted last Friday (23 Oct, spot at 6.6760) that ‘slowing downward momentum and oversold conditions suggests that 6.6030 could be out of reach this time round’. We added, ‘a break of 6.6980 would indicate the risk for further USD weakness has eased’. USD blew past 6.6980 yesterday (26 Oct) and hit a high of 6.7172. The price action suggests that 6.6275 is a short-term bottom and this level may not come back into the picture within these couple of weeks. The current movement is viewed as part of a ‘corrective recovery’ that has scope to extend to 6.7450. Overall, USD is expected to trade with an upward bias for now as long as it does not move below the ‘strong support’ level at 6.6530. On a shorter-term note, 6.6660 is already quite a solid level.”

Traders remain well-positioned for more volatility ahead of the US election outcome next week, as reflected by the barometers for implied currency swi

Traders remain well-positioned for more volatility ahead of the US election outcome next week, as reflected by the barometers for implied currency swings in the $6.6 trillion a day foreign exchange markets, per Reuters. Key takeaways “Contracts for euro and Japanese yen one-week implied volatility versus the US dollar expiring in a week climbed to their highest levels since early April before the U.S. Presidential elections on Nov. 3.” “The spurt in short-end volatility indicators indicate concerns around the US election outcome, even though odds have stabilized this week.”

Gold consolidation extends as expected with the yellow metal trading around the $1900 mark, but with new highs eventually expected, according to strat

Gold consolidation extends as expected with the yellow metal trading around the $1900 mark, but with new highs eventually expected, according to strategists at Credit Suisse. Key quotes “Gold extends its consolidation/correction following the move to our base case objective of $2075/80 in August, but is still holding flagged support at $1837, the 38.2% retracement of the rally from March. We look for this to continue to hold to maintain the sideways range ahead of a break above $1993 for a fresh look at $2075.”  “An eventual move above $2075 stays looked for a resumption of the core bull trend with  resistance seen next at $2175, then $2300, although we continue to believe this will not be seen until next year.”  “Below $1837 can see scope for a deeper setback to $1765, potentially $1726, but with this expected to hold.”   

Sweden Retail Sales (YoY) above expectations (2%) in September: Actual (3.9%)

Sweden Retail Sales (MoM) came in at 0.8%, above forecasts (0.1%) in September

The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, resumes the upside beyond the 93.00 mark on Wednesday. US

DXY climbs to multi-day highs near 93.30 on Wednesday.The advance of the pandemic, US elections support the dollar,MBA’s weekly Mortgage Applications, flash Trade Balance next on tap.The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, resumes the upside beyond the 93.00 mark on Wednesday. US Dollar Index in multi-day highs The index picks up extra pace following the opening bell in Europe and advances further north of the 93.00 barrier so far on Wednesday. In fact, the unremitting advance of the coronavirus pandemic coupled with the re-implementation of restrictions in several countries appears to lend support to the demand for the safe havens on Wednesday. In addition, fading hopes of further stimulus in the US economy in combination with uncertainty around the US presidential elections also collaborates with the renewed inflows into the buck. In the US data space, weekly Mortgage Applications tracked by the MBA are due in the first turn seconded by the advanced Trade Balance figures for the month of September and the weekly report on US crude oil supplies by the EIA. What to look for around USD The index manages to regain the area above the key 93.00 barrier so far this week. The current recovery in the dollar comes in response to the impact of the COVID-19 pandemic on the global growth prospects as well as fading chances of a deal between Democrats and Republicans over a new stimulus bill. However, the stance on the dollar is likely to deteriorate in case of a “blue wave” following the presidential elections next month, while the “lower for longer” stance from the Federal Reserve also caps occasional bullish attempts. US Dollar Index relevant levels At the moment, the index is gaining 0.21% at 93.28 and a break above 93.90 (weekly high Oct.15) would expose 94.20 (38.2% Fibo retracement of the 2017-2018 drop) and finally 94.74 (monthly high Sep.25). On the other hand the next support is located at 92.47 (monthly low Oct.21) followed by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018).

The euro has underperformed undermined by renewed fears over lockdowns in Europe as the region is seeing a sharp acceleration in coronavirus cases. It

The euro has underperformed undermined by renewed fears over lockdowns in Europe as the region is seeing a sharp acceleration in coronavirus cases. It has helped drag EUR/USD back below the 1.1800-level and EUR/JPY below the 123.00-level. These disruptions from the second COVID-19 wave in Europe is set to build a darkening outlook for the common currency, per MUFG Bank. Key quotes “The main trigger for the euro sell off has been reports that the French government is considering a month-long national lockdown to help dampen the spread of COVID-19 which could take effect from midnight on Thursday. French President Emmanuel Macron is expected to make a televised address on Wednesday when the new lockdown measures could be officially announced.”  “According to the WHO, 46% of all global cases and nearly one third of all deaths were from the European region last week. If the negative COVID-19 trends in Europe continue in the coming weeks and months, it will increase pressure on other national governments to follow France and re-impose lockdown measures. The developments are clearly darkening the outlook for the economic recovery in Europe heading into year end. Leading indicators are already signalling that the eurozone economy is slowing more than the US which is currently experiencing its third wave of COVID-19.”  “Softening growth expectations are also reflected in the latest ETF flow data. We have looked at five of the biggest euro-zone equity ETFs. There has already been a clear pick up in outflows from those funds over the past month which has reversed around half of the inflows which took place between July and August. The sharp reversal in eurozone equity flows provides a less supportive environment for the euro.”  “At the same time, the ECB and national governments will come under increasing pressure to deliver further stimulus to support growth, although it is probably too soon to expect action as soon as at this week’s ECB policy meeting.”  

The GBP/JPY cross witnessed some fresh selling during the early European session and dropped to near two-week lows, around the 135.60 region in the la

A combination of factors prompted some follow-through selling around GBP/JPY on Wednesday.Coronavirus jitters weighed on investors’ sentiment and boosted demand for the safe-haven JPY.Persistent Brexit-related uncertainties undermined the GBP and further added to the selling bias.The GBP/JPY cross witnessed some fresh selling during the early European session and dropped to near two-week lows, around the 135.60 region in the last hour. The cross extended its recent pullback from the 137.65 region and witnessed some follow-through selling through the first half of the trading action on Wednesday. The prevalent risk-off environment forced investors to take refuge in the safe-haven Japanese yen, which, in turn, was seen as a key factor exerting pressure on the GBP/JPY cross. New coronavirus cases have been growing at an alarming pace in the United States and Europe and might force governments to impose new restrictions. Investors remain worried that renewed lockdown measures to curb the second wave of COVID-19 infections could prove detrimental for the already fragile global economic recovery, which weighed on investors' sentiment. On the other hand, the British pound was being pressured by persistent Brexit-related uncertainties. Despite an extension of the UK-EU Brexit talks and reported progress being made in numerous areas, the impasse on the matter of the future access of EU fishing fleets to UK waters has dampened prospects for an immediate breakthrough. Apart from this, Wednesday's downfall could further be attributed to some technical selling below the very important 200-day SMA. hence, some follow-through weakness back towards challenging October monthly swing lows, around the key 135.00 psychological mark, looks a distinct possibility amid absent relevant market moving economic releases. Technical levels to watch  

The lira has weakened sharply since the central bank decided to leave its main interest rate unchanged at its policy meeting on 22 October. USD/TRY ro

The lira has weakened sharply since the central bank decided to leave its main interest rate unchanged at its policy meeting on 22 October. USD/TRY rose on Monday-Tuesday to a new all-time high well above 8.00. Economists at Credit Suisse raise the short-term USD/TRY target range to 8.40-8.50 (from a range of 7.65-7.75 previously). The new forecast reflects the idea that the new dynamics that had developed in terms of markets expectations for further hikes can keep USD/TRY exposed on the upside. Key quotes “We now opt to raise our short-term USD/TRY forecast to 8.40-8.50 which is more than 3% above the current spot rate. Our logic is that the bar for creating a balanced flow for the lira has been raised by investor disappointment over the rate decision last week. We suspect that investors will now demand much more aggressive and decisive increases in the effective funding rate in order to consider long lira positions.” “We believe that the dynamics that were created after last week’s rate decision keep the lira vulnerable as the central bank could continue to deliver smaller or less clear rate hikes than investors expect.” “We cannot rule out a short-term stabilization in USD/TRY (perhaps around 8.20) after the big move that has unfolded since late last week. This could happen even in the absence of sizable increases in the effective funding rate. However, a decline in USD/TRY back well below 8.00 will probably require a specific scenario of sizable increases in the effective funding rate and a favourable US elections outcome for the lira.”  

Spain Retail Sales (YoY) below expectations (-3.1%) in September: Actual (-3.3%)

Copper (LME) maintains its previous highlighted bull “flag”, as the $6257 is holding, and is now on the cusp of breaking to new highs. A break below $

Copper (LME) maintains its previous highlighted bull “flag”, as the $6257 is holding, and is now on the cusp of breaking to new highs. A break below $6257 would imply more range trading, according to strategists at Credit Suisse. Key quotes “Copper maintains its bullish ‘flag’ continuation pattern and is trying to break to new highs. Whilst support at $6257 holds the immediate outlook remains bullish for strength back to $7034, then $7254/7348 - the high of 2018 and 50% retracement of the 2011/2016 collapse.”  “Below $6257 would warn of further range trading and a test of price and ‘neckline’ support at $6281/26, but only below here would negate the ‘flag’ and instead set a top to turn the risk lower.” “The bearish weekly RSI divergent momentum picture is a concern though.”  

Sweden Consumer Confidence (MoM) registered at 90 above expectations (79) in October

South Africa Consumer Price Index (MoM) below expectations (0.3%) in September: Actual (0.2%)

South Africa Consumer Price Index (YoY) came in at 3% below forecasts (3.1%) in September

The USD/JPY pair has dropped to over one-month lows, around the 104.20 region. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank,

The USD/JPY pair has dropped to over one-month lows, around the 104.20 region. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, is closely watching a breach of the 104.00 level wich would open the path for further losses. Key quotes “USD/JPY came under pressure again, it remains capped by the three-month downtrend at 105.70 and the focus is on the 104.00 September low. This together with the 200-month ma at 103.93 guards the 103.43/78.6% Fibonacci retracement which is the last defence for the 101.18 March low.”  “Rallies will find initial resistance lines at 105.70 ahead of the seven-month resistance line at 106.23. Only above here will trigger a move to the 200-day ma at 107.17.”  

The USD/CHF pair shot to over one-week tops during the early European session, with bulls now looking to extend the momentum further beyond the 0.9100

USD/CHF prolonged this week’s positive move and gained traction for the third straight day.Coronavirus jitters continue to benefit the greenback’s status as the global reserve currency.The prevalent risk-off mood could revive demand for the safe-haven CHF and cap the upside.The USD/CHF pair shot to over one-week tops during the early European session, with bulls now looking to extend the momentum further beyond the 0.9100 mark. The pair built on this week's recovery move from the 0.9040-35 region and gained some follow-through traction for the third consecutive session on Wednesday. The uptick was exclusively sponsored by the emergence of some fresh buying around the US dollar and seemed rather unaffected by the prevalent risk-off environment. Growing market worries that the second wave of coronavirus infections in Europe and the US could derail the already fragile global economic recovery continued benefitted the greenback's reserve currency status. However, the uncertain US political situation might hold traders from placing aggressive USD bullish bets. The incoming polls have been indicating that Democrat candidate Joe Biden is ahead of incumbent President Donald Trump nationally. However, investors remain wary of predicting the actual outcome as the gap is narrow in certain key swing states. Adding to the uncertainty is the possibility that the election outcome can be contested. This would likely further delay negotiations on the next round of the US fiscal stimulus measures, which dampened the market mood. This was evident from a weaker trading sentiment around the equity markets, which could revive demand for the safe-haven Swiss franc and contribute towards capping the upside for the USD/CHF pair. There isn't any major market-moving economic data due for release on Wednesday. Hence, the USD price dynamics, along with the broader market risk sentiment and developments surrounding the coronavirus saga will play a key role in influencing the USD/CHF pair's intraday momentum. Technical levels to watch  

France Consumer Confidence came in at 94, above forecasts (93) in October

Elections have consequences, but the defeat of the pandemic and subsequent economic recovery will continue to be one of the main market drivers in any

Elections have consequences, but the defeat of the pandemic and subsequent economic recovery will continue to be one of the main market drivers in any election outcome, which bodes well for the equity market over time. That said, a Blue Wave or status quo outcome would likely be modestly better for stocks because it would lead to larger fiscal support relative to a Biden win with a divided Congress, economists at UBS report. Key quotes “A Biden administration would emphasize economic recovery with a focus on infrastructure, green initiatives, and potentially healthcare coverage expansion. Trade tensions could also cool, providing an additional boost. This should offset the impact of tighter regulation and higher taxes. We believe industrials, materials and utilities sectors would benefit. The energy sector could lag due to green policies. Financial regulation would likely be fairly limited in scope. For healthcare, uncertainty about the impact of a potential ‘public option’ health insurance plan and drug price cuts could weigh on the sector, but we think the most dire policy outcomes are already priced in and, ultimately, greater healthcare coverage would benefit the sector.” “In a Biden victory with a divided Congress, equities could have a modestly negative reaction. This constellation might produce the smallest fiscal package if the Senate Republicans opt to block most legislation. Still, industrials and materials could benefit from reduced trade tensions. On the regulatory front, utilities would benefit from green initiatives. However, energy, and, to a much lesser extent, financials, could see some regulatory headwinds. Healthcare stocks would likely react favorably to the prospect of more limited than expected policy changes.” “In a status quo scenario, policy shifts would likely be fairly small. Fiscal stimulus that supports the recovery would likely come through, but it would be smaller than a Blue Wave outcome. Renewed trade tensions with China are a risk and would have a slightly negative impact on the industrials and materials sectors. Companies in the energy, financials, and healthcare sectors could benefit from a relief rally as some of the policy uncertainty associated with a Biden victory dissipates.”

Here is what you need to know on Wednesday, October 28: The market mood remains damp as Germany, France, and possibly the UK are mulling new restricti

Here is what you need to know on Wednesday, October 28: The market mood remains damp as Germany, France, and possibly the UK are mulling new restrictions as coronavirus cases spiral. Tension is rising ahead of the elections and their implications for stimulus. The Bank of Canada is set to leave rates unchanged, and Bitcoin is grabbing attention by hitting the highest since January 2018.COVID-19 cases, deaths, and hospitalizations are surging in Europe. French President Emmanuel Macron will address the nation later in the day and a monthlong strict lockdown is mulled after a nighttime curfew failed to stem the disease. German Chancellor Angela Merkel is also considering harsher restrictions. EUR/USD slipped below 1.18 late on Tuesday. UK: The Telegraph reports that experts are pushing Prime Minister Boris Johnson to announce another lockdown, yet there are disagreements within the cabinet. Brexit talks are at "a most difficult point" according to EU Council President Charles Michel. GBP/USD has been holding up above 1.30. US Elections: President Donald Trump continues trailing rival Joe Biden, yet the president seems to gain ground in the critical battleground state of Florida. Over 70 million Americans – more than half of the 2016 total vote count – have already cast their ballots, Markets want a clear outcome, preferably a "blue wave" that would swiftly approve a multi-trillion stimulus bill. Rising uncertainty and tensions are weighing on markets.  More 2020 US Election: Polling, history and the submerged Trump voteAUD/USD has been edging higher after inflation figures for the third quarter marginally beat expectations. Melbourne is gradually emerging from its lockdown. The Bank of Canada is set to leave its interest rate unchanged at 0.25% and publish new forecasts in its quarterly Monetary Policy Report. Governor Tiff Macklem and his colleagues will likely address the impact of covid concerns on the economy.  See BOC Preview: Covid concerns set to outweigh recovery optimism and crush CADBitcoin is trading near $14,000, the highest since January 2018. The leading cryptocurrency has been on a rising trajectory for several months. Ethereum is lagging behind. Oil prices are on the back foot, with WTI changing hands below $38.     

USD/KRW maintains a large top and continues to trend strongly lower after breaking below the critical support of 1151/47. The pair is trading just abo

USD/KRW maintains a large top and continues to trend strongly lower after breaking below the critical support of 1151/47. The pair is trading just above the 1130 mark and the next support is seen at 1109/05, analysts at Credit Suisse apprise. Key quotes “USD/KRW remains in a clear downtrend since breaking the March 2018 uptrend and crucial support at 1151/47 – the prior 2020 and July 2019 lows, as well as the 61.8% retracement of the 2018/2020 surge, which completed a large topping structure.”  “Next pivotal support is seen at the 2019 and July 2018 lows, as well as the 78.6% retracement at 1109/05.”  “The size of the potential top suggests a test of the 2018 low at 1054 is very possible.”  

EUR/JPY has eroded the five-month uptrend at 123.64 and was last seen trading at 122.70, down -0.38% on the day. Karen Jones, Team Head FICC Technical

EUR/JPY has eroded the five-month uptrend at 123.64 and was last seen trading at 122.70, down -0.38% on the day. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the fall to extend towards the September low of 122.38 and then the 200-DMA at 121.15. Key quotes “EUR/JPY has eroded the five-month uptrend and has recently been rejected by the 200-week ma at 125.22 and the outlook is increasingly negative.”  “We look for losses to 122.38, the September low and then the 200-day ma at 121.15. The 55-week is here also at 121.12.”  “Only a break above Fibonacci resistance at 125.29 would initiate a rechallenge of the 2014-2020 resistance line at 126.93, which is expected to cap.”  

The USD/CAD pair traded with a mild positive bias on Wednesday, albeit lacked any strong follow-through, with bulls still awaiting a sustained move be

A combination of supporting factors assisted USD/CAD to gain traction on Wednesday.Coronavirus jitters weighed on investors’ sentiment and benefitted the safe-haven USD.Sliding oil prices undermined the loonie and remained supportive of the intraday uptick.The upside seems limited amid the US political uncertainty and head of the BoC decision.The USD/CAD pair traded with a mild positive bias on Wednesday, albeit lacked any strong follow-through, with bulls still awaiting a sustained move beyond the 1.3200 mark. The pair gained some traction on Wednesday and built on the previous day's late rebound of over 40 pips from the 1.3142 area. The uptick was supported by a combination of factors, though remained limited ahead of the latest monetary policy update by the Bank of Canada on Wednesday. Investors remain concerns that renewed lockdown measures to curb the second wave of the coronavirus infections could prove detrimental for the already fragile global economic recovery. Adding to this, the lack of progress in the US stimulus talks further dampened the market mood. This was evident from a weaker tone surrounding the equity markets, which forced investors to take refuge in traditional safe-haven assets. This, in turn, benefitted the US dollar and extended some support to the USD/CAD pair through the first half of the trading action on Wednesday. Apart from this, a fresh leg down in crude oil prices undermined the commodity-linked currency – the loonie – and further contributed to the bid tone surrounding the USD/CAD pair. Oil prices fell over 2% amid fears that growing COVID-19 cases could lead to a supply glut and weaker fuel demand. However, the uncertain US political situation held the USD bulls from placing any aggressive bets. Investors also seemed reluctant, rather preferred to wait on the sidelines ahead of the BoC policy decision. This might eventually keep a lid on any strong gains for the USD/CAD pair. Given that expectations for any kind of a major policy shift are low, the key focus will be on the BoC's updated economic projections. This, followed by the post-meeting press conference, will infuse some volatility and assist traders to grab some meaningful opportunities. Technical levels to watch  

FX Strategists at UOB Group keep the negative view on USD/JPY and the focus of attention on 104.00 for the time being. Key Quotes 24-hour view: “Yeste

FX Strategists at UOB Group keep the negative view on USD/JPY and the focus of attention on 104.00 for the time being. Key Quotes 24-hour view: “Yesterday, we highlighted that ‘the underlying tone still appears to be soft and we see chance for USD to drift lower’. However, we were of the view that ‘a sustained decline below 104.50 is unlikely’. The subsequent weakness in USD exceeded our expectation as it dropped to a low of 104.37 before closing on a soft note at 104.40 (-0.40%). Downward momentum has improved and further USD weakness is likely even though the major support at 104.00 could be out of reach for now (minor support is at 104.20). Resistance is at 107.70 followed by 104.90.” Next 1-3 weeks: “We continue to hold the same view from last Thursday (22 Oct, spot at 104.65) wherein USD ‘is expected to stay on the defensive but it is left to be seen if it can crack the September’s low near 104.00’. While shorter-term downward momentum has improved, the 104.00 is a solid support and may not be easy to crack. On the upside, a break of 105.20 (‘strong resistance’ level previously at 105.40) would indicate the downside risk has dissipated.”

Open interest in Natural Gas futures markets dropped for yet another session on Tuesday, this time by around 6.7K contracts according to advanced read

Open interest in Natural Gas futures markets dropped for yet another session on Tuesday, this time by around 6.7K contracts according to advanced readings from CME Group. Volume, instead, went up by around 140.4K contracts following three consecutive daily pullbacks. Natural Gas seen gyrating around $3.00/MMBtu Tuesday’s inconclusive price action in Natural Gas was against the backdrop of diminishing open interest, signalling the likelihood of further consolidation around current levels at least in the very near-term. That said, the $3.00 mark per MMBtu is still deemed as a key level.

Germany Import Price Index (MoM) registered at 0.3% above expectations (-0.3%) in September

Norway Retail Sales registered at 0.3%, below expectations (1%) in September

Germany Import Price Index (YoY) above expectations (-4.8%) in September: Actual (-4.3%)

Turkey Economic Confidence Index up to 92.8 in October from previous 88.5

AUD/USD could extend the side-lined trading between 0.7030 and 0.7185 in the next weeks, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “

AUD/USD could extend the side-lined trading between 0.7030 and 0.7185 in the next weeks, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “Yesterday, we held the view that AUD ‘could continue to trade sideways, likely between 0.7100 and 0.7155’. While AUD traded sideways as expected, the range was narrower than expected (0.7116/0.7147). The underlying tone has weakened somewhat and while a dip below 0.7100 is not ruled, the next support t 0.7080 is not expected to come into the picture. On the upside, 0.7155 is still acting as a solid resistance level (minor resistance is at 0.7140).” Next 1-3 weeks: “AUD traded in a quiet manner over the past few days and for now, we continue to hold the same view as from last Thursday (22 Oct, spot at 0.7110). As highlighted, the movement in AUD is viewed as part of a consolidation phase and AUD is likely to trade between 0.7030 and 0.7185.”

CME Group’s flash data for Crude Oil Futures markets noted traders trimmed their open interest positions by around 2.8K contracts on Tuesday, extendin

CME Group’s flash data for Crude Oil Futures markets noted traders trimmed their open interest positions by around 2.8K contracts on Tuesday, extending the erratic performance seen as of late. In the same line, volume resumed the downside and shrunk by around 50.6K contracts. WTI does not rule out a move to the 200-day SMA Tuesday’s rebound in prices of the WTI was in tandem with shrinking open interest, hinting at the idea that a serious move higher lacks conviction for the time being. That said, a drop to the 200-day SMA near $38.30 still emerges on the horizon.

The USD/JPY pair retreated around 35 pips from Asian session swing highs and dropped to over one-month lows, around the 104.20 region in the last hour

USD/JPY added to the overnight heavy losses and remained depressed for the second straight day.The prevalent risk-off mood underpinned the safe-haven JPY and was seen exerting some pressure.A modest pickup in the USD demand might help limit the downside amid the US political uncertainty.The USD/JPY pair retreated around 35 pips from Asian session swing highs and dropped to over one-month lows, around the 104.20 region in the last hour. The pair extended this week's retracement slide from levels just above the key 105.00 psychological mark and witnessed some strong follow-through selling for the second consecutive session on Tuesday. The downward trajectory was exclusively sponsored by the prevalent risk-off mood, which tends to undermine demand for the safe-haven Japanese yen. Growing worries about the potential impact of the ever-increasing coronavirus cases continued weighing on investors' sentiment. This, along with the lack of progress in the US fiscal stimulus plans further dampened the market mood. This was evident from a weaker trading sentiment around the equity markets, which drove flows towards traditional safe-haven assets. Meanwhile, concerns that renewed lockdown measures to curb the second wave of COVID-19 infections could prove detrimental for the already fragile global economic recovery extended some support to the US dollar's reserve currency status. This, in turn, might turn out to be the only factor that might help limit any further losses for the USD/JPY pair. Hence, any subsequent fall is more likely to attract some buying near September monthly swing lows, around the 104.00 round-figure mark. That said, the uncertain US political situation might hold the USD bulls from placing any aggressive bets and limit any meaningful upside for the USD/JPY pair amid absent relevant market-moving economic releases. It is worth recalling that incoming polls have been indicating that Democrat candidate Joe Biden is ahead of incumbent President Donald Trump. However, investors remain wary of predicting the actual outcome as the gap is narrow in certain key swing states. Technical levels to watch  

Cable is now forecasted to navigate within the 1.2900-1.3120 range in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view:

Cable is now forecasted to navigate within the 1.2900-1.3120 range in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “Our view for GBP yesterday to ‘dip below 1.2990’ was incorrect as it dropped to 1.3001, rebounded strongly to a high of 1.3079 before easing off to close at 1.3047 (+0.19%). The choppy price actions have resulted in a mixed outlook and for today, GBP is likely to trade between 1.2990 and 1.3080.” Next 1-3 weeks: “We highlighted yesterday (26 Oct, spot at 1.3050) that ‘upward momentum is beginning to ease’ and added, ‘GBP has to move and stay above 1.3120 within these 1 to 2 days or the odds for further GBP strength would diminish quickly’. GBP subsequently came close to breaching our ‘strong support’ level at 1.2990 (low of 1.2993) and closed on a soft note at 1.3022 (-0.13%). Upward momentum has deteriorated further and further GBP appears unlikely. GBP is more likely to consolidate and trade between 1.2900 and 1.3120 for now.”

In light of preliminary figures for Gold futures markets from CME Group, open interest reversed three pullbacks in a row and went up by around 4.7K co

In light of preliminary figures for Gold futures markets from CME Group, open interest reversed three pullbacks in a row and went up by around 4.7K contracts on Tuesday. In the same line, volume extended the downtrend for the third consecutive session, this time by nearly 10.3K contracts. Gold meets initial hurdle at $1,920/oz Prices of gold extends the upbeat momentum so far this week. Tuesday’s positive price action was in tandem with rising open interest, leaving the door open for the continuation of this move in the very near-term. That said, the 55-day SMA at $1,922 emerges as the initial interim hurdle.

The AUD/USD pair built on its Asian session positive move and shot to fresh weekly tops, around the 0.7155 region in the last hour. The pair added to

AUD/USD gained strong positive traction following the release of upbeat aussie CPI figures.Coronavirus jitters, the risk-off mood benefitted the safe-haven USD and might cap gains.The US political uncertainty might also contribute to limit any large currency movements.The AUD/USD pair built on its Asian session positive move and shot to fresh weekly tops, around the 0.7155 region in the last hour. The pair added to the previous day's modest gains and caught some strong bids on Tuesday following the release of hotter-than-expected Australian consumer inflation figures. In fact, Australia's headline CPI rose 1.6% QoQ during the third quarter as against a 1.9% contraction in the previous quarter. Adding to this, the Reserve Bank of Australia's (RBA) trimmed-mean CPI increased 0.4% QoQ versus expectations for a 0.3% rise and -0.1% previous. The upbeat data prompted some short-covering move around the AUD/USD pair, albeit a combination of factors might keep a lid on any further gains. Firming market expectations that the RBA will ease further at its upcoming policy meeting on November 3 might hold bulls from placing any aggressive bets. This, along with the prevalent risk-off environment might further collaborate towards capping the perceived riskier Australian dollar. Growing market worries about the potential economic impact of the ever-increasing coronavirus cases, along with the lack of progress in the US stimulus talks continued weighing on investors' sentiment. This, in turn, benefitted the safe-haven US dollar and could drive flows away from the aussie. That said, the uncertainty about the actual outcome of the US presidential election could limit large currency movements. The incoming polls have been indicating that Democrat candidate Joe Biden is ahead of incumbent President Donald Trump, though the gap is very narrow in certain key swing states. There isn't any major market-moving economic data due for release from the US on Tuesday. This makes it prudent to wait for some strong follow-through buying before traders start positioning for any further near-term appreciating move for the AUD/USD pair. Technical levels to watch  

In opinion of FX Strategists at UOB Group, EUR/USD is now seen within the 1.1710-1.1860 range in the next weeks. Key Quotes “We highlighted yesterday

In opinion of FX Strategists at UOB Group, EUR/USD is now seen within the 1.1710-1.1860 range in the next weeks. Key Quotes “We highlighted yesterday that ‘downward momentum has improved a tad and the bias for today is tilted to the downside’. We added, ‘1.1770 is a strong support and may not be easy to break’. EUR subsequently traded between 1.1791 and 1.1838, closed at 1.1795 before dropping sharply after NY close. The rapid increase in downward momentum suggests EUR could weaken further but the next major support at 1.1735 is unlikely to come into the picture for now (minor support is at 1.1755). Resistance is at 1.1805 followed by 1.1830.” Next 1-3 weeks: “We have held the same view since last Wednesday (21 Oct, spot at 1.1825) wherein ‘the bias for EUR is titled to the upside but the major resistance at 1.1900 may not come into the picture so soon’. EUR subsequently rose to a high of 1.1880 but has since retreated and at the time of writing, is holding just above the ‘strong support’ level of 1.1770. Upward momentum has more or less dissipated and the current movement is viewed as the early stages of a consolidation phase. That said, the near-term risk is titled to the downside but for now, any weakness is viewed as part of a 1.1710/1.1860 range. In other words, EUR is unlikely to move below 1.1710 in a sustained manner.”

Following Tuesday’s reports suggesting that the German Chancellor Angela Merkel is considering a "light lockdown,” in the face of rising coronavirus c

Following Tuesday’s reports suggesting that the German Chancellor Angela Merkel is considering a "light lockdown,” in the face of rising coronavirus cases in Europe’s economic powerhouse, Bild cites that Merkel is expected to push for schools and nurseries to remain open when she meets the state premier to address the issue later on Wednesday. Key details of the proposed ‘light lockdown’ “All restaurants, bars, and pubs should be closed (except for take-away).” “Theaters, operas, concert houses, fitness studios, casinos, cinemas to close.” “Shops should be able to remain open with relevant safety measures.” “New measures would apply nationwide from 4 November until end of November.”

FX option expiries for Oct 28 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1800 1.0bn 1.1805 729m 1.1830 555m

FX option expiries for Oct 28 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1800 1.0bn 1.1805 729m 1.1830 555m 1.1900 958m 1.1950 806m - GBP/USD: GBP amounts         1.2950 209m 1.3000 224m 1.3045 251m 1.3100 779m 1.3140 244m - USD/JPY: USD amounts          103.50 519m 103.90 422m 104.50 772m 104.85 410m 104.90 945m 105.00 1.6bn 105.30 912m 105.40 810m 105.50 402m - EUR/GBP: EUR amounts 0.9085 591m 0.9100 436m

Gold is holding up above $1900, looking to extend gains into the third straight day on Wednesday, despite the recent broad US dollar strength. Risk-av

Gold is holding up above $1900, looking to extend gains into the third straight day on Wednesday, despite the recent broad US dollar strength. Risk-aversion remains in play amid likely imposition of tighter COVID-19 restrictions in Europe’s top economies, as the second-wave tightens its grip. Also, benefiting the yieldless gold is the sell-off in the US Treasury yields across the curve amid faltering US economic recovery and election anxiety. Fading prospects of US fiscal stimulus also weighs on the investors’ sentiment. How is gold positioned technically? Gold: Key resistances and supports The Technical Confluences Indicator shows that the yellow metal is trying hard to overcome powerful resistance at $1909.40, which is the convergence of the SMA200 four-hour and Fibonacci 61.8% one-week. Acceptance above the latter will revive the bullish momentum, with the next major resistance seen at $1919, where the Fibonacci 38.2% one-week is placed. Further north, the bulls will test the $1923 barrier, the intersection of the pivot point one-week R1 and Fibonacci 23.6% one-week. The previous week high of $1932 will be back on the buyers’ radars. Alternatively, an immediate cushion is set at $1906, which is the meeting point of the Fibonacci 38.2% one-day, SMA100 four-hour and SMA10 one-day. A firm break below the last could call for a test of the next support at $1902, the previous low on four-hour and Fibonacci 61.8% one-day convergence. Selling pressure is likely to intensify below the latter, opening floors towards the next downside target of $1887, which is the confluence of the pivot point one-week S1 and pivot point one-day S3. Here is how it looks on the tool   About Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. Learn more about Technical Confluence

GBP/USD looks to extend its downside consolidation phase below 1.3150 into the European open, as the US dollar clings onto the overnight gains amid br

GBP/USD in bearish consolidation phase amid risk-off mood.Coronavirus fears mount, UK’s new deaths highest since May. Brexit and virus updates in focus ahead of US macro news. GBP/USD looks to extend its downside consolidation phase below 1.3150 into the European open, as the US dollar clings onto the overnight gains amid broad risk-aversion. With the major European economies considering nationwide lockdowns amid the relentless surge in coronavirus cases, the sentiment on the global markets remains tepid. The risk-off mood buoys the demand for the US dollar as a safe-haven at the expense of the risk assets such as the British pound. The UK virus situation is no better, with the Kingdom having reported that the highest number of new deaths since May at 367 on Tuesday while new infections rose by 22,885.  The northern English town of Warrington moved into the highest level of coronavirus restrictions since Tuesday. On the Brexit front, the EU’s Chief Brexit Negotiator Michel Barnier resumed talks with his British counterpart David Frost in London on Tuesday. Markets remain hopeful of a likely Brexit breakthrough, keeping the cable’s downside in check. In absence of first-tier macro events from the UK docket, the focus will remain on the global virus statistics, Brexit updates and US data for fresh trading impetus. GBP/USD technical levels Immediate support is placed at 1.3006/09 (10 and 50-DMA), below which the 20-DMA at 1.2984 would come into play. To the upside, the bulls are testing the 5-DMA barrier at 1.3046. The next critical resistance awaits at 1.3081 (daily classic R1). GBP/USD additional levels  

EUR/USD continues to drop as Eurozone's biggest economies, France and Germany, consider imposing the economically-painful lockdown restrictions to cou

EUR/USD slips to eight-day low on coronavirus concerns. France, Germany consider imposing a lockdown, which could complicate economic recovery. Pressure on the ECB to boost stimulus is rising. EUR/USD continues to drop as Eurozone's biggest economies, France and Germany, consider imposing the economically-painful lockdown restrictions to counter the rising coronavirus cases.  The pair is currently trading at 1.1778, representing a 0.13% drop on the day, having hit an eight-day low of 1.1769 early Wednesday. The currency pair is trading in the red for the third straight day, having faced rejection near 1.1860 on Monday.  Virus concerns weigh France is reportedly considering a one-month lockdown as the second wave of the coronavirus is showing no signs of slowing down. According to Reuters, Eurozone's economic powerhouse Germany also contemplates a measured lockdown as its health care system is close to breaking point.  While these measures look less severe than the ones implemented in April/May, they could still harm Eurozone's already fragile economic recovery, resulting in a prolonged period of deflation.  All things considered, the pressure on the European Central Bank to deliver more stimulus looks to be rising. As such, markets are offering euros. The sell-off will gather pace if the coronavirus numbers continue to rise.  The US, too, is experiencing the second wave of coronavirus. However, the Federal Reserve faces less urgency to boost stimulus as inflation expectations in the US are holding up relatively well. Coupled with expectations for additional fiscal stimulus, that is likely to support gains in the US dollar. The US fiscal largesse is positive for yields and the greenback.  Technical levels  

According to the latest Reuters poll of 14 economists, the Reserve Bank of Australia (RBA) is likely to expand government bond purchases by about AUD1

According to the latest Reuters poll of 14 economists, the Reserve Bank of Australia (RBA) is likely to expand government bond purchases by about AUD100 billion (USD71.29 billion) when it meets at its monetary policy meeting next Tuesday. Additional takeaways “The RBA is also widely expected to trim its cash rate as well as the target for three-year government bond yields by 15 basis points to 0.1% at the meeting.” “RBA's balance sheet could easily approach A$500 billion by the middle of next year, equal to about a quarter of Australia's annual gross domestic product (GDP).” Related readsRBA’s Harper: Can ramp up bond purchases indefinitelyAUD/USD: Bids elusive despite above-forecast Aussie CPI

Jeffrey Gundlach, Wall Street's bond king and Founder and Chief Executive Officer of DoubleLine Capital, favors a victory for US President Donald Tru

Jeffrey Gundlach, Wall Street's bond king and Founder and Chief Executive Officer of DoubleLine Capital, favors a victory for US President Donald Trump in the election despite the polls contradicted such an outcome. Key quotes “The polls right now say he isn’t going to win, but they said that four years ago” “Mind you, my conviction is way lower than it was four years ago. But back in [that period], when Trump was little more than an asterisk in the betting odds, I predicted he was going to win. This one is much more murky, but in my eyes, it favors a Trump win.” “Republicans will likely keep the Senate regardless of who win.” “If Biden indeed wins the election and eventually rolls back or eliminates the corporate tax reduction from 2017's Tax Cuts and Jobs Act, US equity valuations would increase sharply. But the reduction in after-tax earnings would mean that stock prices would not appreciate. Interest rates, volatility and inflation would also rise.”

Silver is currently trading unchanged on the day near $24.34 per ounce. The path of least resistance for the metal is to the downside, according to th

Silver's daily chart shows a rising channel breakdown. A break above the Oct. 12 high is needed to confirm a bullish reversal. Silver is currently trading unchanged on the day near $24.34 per ounce.  The path of least resistance for the metal is to the downside, according to the daily chart.  Prices fell by 1.43% on Monday, confirming a downside break of an ascending channel connecting Sept. 24 and Oct. 15 lows and Sept. 29 and Oct. 12 highs.  The breakdown is still valid and indicates the sell-off from the Sept. 1 highs near $28.90 has resumed. The immediate support is seen at $23.38 (100-day simple moving average).  Alternatively, a close above the Oct. 12 high of $25.565 would invalidate lower highs setup on the daily chart and confirm a bearish-to-bullish trend change.  Daily chartTrend: Bearish Technical levels  

Following the rejection at 50-hourly moving average (HMA) at 73.84 in the US last session, the USD/INR pair reverses the recovery gains on Wednesday.

USD/INR looks south amid bearish technical set up. Hourly chart displays a potential inverted cup-and-handle. Hourly RSI points south while within the bearish region. Following the rejection at 50-hourly moving average (HMA) at 73.84 in the US last session, the USD/INR pair reverses the recovery gains on Wednesday. The spot looks to extend the renewed downside while teasing an inverted cup-and-handle breakdown on the hourly chart. An hourly close below the neckline support at 73.65 would validate the pattern, calling for a test of the 200-HMA at 73.60. Subsequently, the sellers would then aim for the pattern target measured at 73.20. Adding credence to the bearish move, the hourly Relative Strength Index (RSI) points south, trending at 39.43. Any recovery attempts could face immediate resistance at 73.75, the confluence of the 21 and 100-HMAs. Further north, the 50-HMA barrier is the level to beat for the bulls. USD/INR: Hourly chart   USD/INR: Additional levels    

Both the US stock futures and the government bond yields are flashing red on renewed coronavirus concerns and fading prospects of additional fiscal st

The S&P 500 futures drop, suggesting continued risk aversion. The US 10-year yield drops to nine-day lows. Coronavirus concerns weigh over risk sentiment and boost demand for safe havens.Both the US stock futures and the government bond yields are flashing red on renewed coronavirus concerns and fading prospects of additional fiscal stimulus deal.  At press time, the S&P 500 futures are down over 0.5% and boosting demand for haven currencies like the Japanese yen, while the US 10-year yield is hovering at a nine-day low of 0.761%. The benchmark yield hit a high of 0.872% on Oct. 23.  The risk sentiment has weakened this week with the acceleration of the second wave of coronavirus infections across Europe and the US. Some of the Eurozone nations are reportedly considering imposing the economically-painful lockdown restrictions to contain the virus. Though less severe than the ones implemented in April/May this year, these measures could derail the already fragile global economic recovery. As such, investors are moving out of risk assets and into traditional safe havens like treasuries, causing yields to drop.  Additional bearish pressures for the yields look to be stemming from the fiscal impasse in the US. President Donald Trump acknowledged Tuesday that a coronavirus economic relief deal would likely come after the Nov. 3 election.

Another wave of coronavirus surge in the US is seemingly dimming the outlook for the economic recovery ahead of next week’s Presidential election, eco

Another wave of coronavirus surge in the US is seemingly dimming the outlook for the economic recovery ahead of next week’s Presidential election, economists polled by Reuters believed. Key findings “Nearly two-thirds of 58 economists who responded to an additional question in the Oct 16-26 poll said there was a high risk that the U.S. economic rebound could be halted by the surge in coronavirus cases, including five who said it was very high. The result of the Nov. 3 US presidential election, if available promptly, could swiftly end the gridlock on a second fiscal stimulus bill. Democratic control of the Senate, along with a win for the party’s presidential candidate Joe Biden, was predicted to yield a stronger near-term economic recovery, according to nearly 75% of 59 analysts who responded to an additional question. Over 80%, or 41 of 49 respondents, said the US jobless rate would not return to pre-COVID-19 levels until 2023 at least, including two respondents who said it never would. The wider poll showed the jobless rate averaging 8.3% this year, 6.8% next and 5.5% in 2022. It was 3.5% earlier this year before the pandemic took hold. It is forecast to grow 4% this quarter after an expected record rebound of 31% last quarter. For this year, the world’s largest economy is forecast to shrink 4%, according to the poll of 120 economists. The consensus for 2021 and 2022 was for 3.7% and 2.9% growth, respectively. Of the economists who expect more stimulus, the median was $1.8 trillion, within a $0.5-$3.5 trillion range.”

Data provided by Reuters shows risk reversals on USD/CNY, a gauge of calls to puts, jumped to five-month highs on Tuesday, indicating increased demand

Data provided by Reuters shows risk reversals on USD/CNY, a gauge of calls to puts, jumped to five-month highs on Tuesday, indicating increased demand for call options, which given the buyer the right but not the obligation to purchase the underlying at a predetermined price on or before a specific date.  On Monday, risk reversals traded at 0.70 in favor of calls, the level last seen on May 28. The metric has risen from 0.075 to 0.75 over the past four weeks.  Investors seem to be hedging for a corrective bounce in USD/CNY. The pair is currently trading near 6.71, having hit a 27-month low of 6.6412 on Oct. 21.
 

USD/CAD is challenging a critical resistance of 1.3200 in Asian trading this Monday, benefiting from broad-based US dollar recovery and the persistent

USD/CAD remains capped by 1.3200 – critical resistance. Daily chart paints a bleak picture amid bearish RSI. Path of least resistance appears to the downside ahead of BOC. USD/CAD is challenging a critical resistance of 1.3200 in Asian trading this Monday, benefiting from broad-based US dollar recovery and the persistent weakness seen in WTI prices. The bulls are awaiting a daily close above the aforesaid powerful barrier, which is the convergence of the 21 and 50-daily moving averages (DMA), for a sustained move high. The next upside target is seen at Tuesday’s high of 1.3212. The 14-day Relative Strength Index (RSI) trades flat but below the midline, keeping the sellers hopeful. Also, the spot trades below all the major DMAs, adding credence to the bearish bias. The 1.3150 psychological level could challenge the bears’ commitment, below which the October 23 low of 1.3109 could be put to test. The Bank of Canada (BOC) monetary policy decision will be closely eyed to gauge the near-term direction in the prices. USD/CAD: Daily chart USD/CAD: Additional levels  

NZD/USD has erased losses early losses amid a persistent risk-off tone in the global equity markets. At press time, the currency pair is trading large

Risk-off fails to weaken the bid tone around NZD/USD. New Zealand's relative success in controlling coronavirus supports NZD.NZD/USD has erased losses early losses amid a persistent risk-off tone in the global equity markets.  At press time, the currency pair is trading largely unchanged on the day near 0.6703, having hit a low of 0.6693 early today.  The recovery may look confounding to many, given the futures tied to the S&P 500 are currently down 0.61%. In other words, US stocks are likely to suffer losses for the third straight day on Wednesday, courtesy of renewed coronavirus concerns.  Global stocks have come under pressure this week, as the second wave of the virus has recently gathered pace across Europe and in the US and is threatening to derail the global economic recovery. Commodity dollars typically face selling pressure during times of risk aversion in global stocks. However, so far this week, the NZD has shown resilience.  That's not particularly surprising, as New Zealand is one of the few countries with less than 100 active cases. The country's relative success in handing the coronavirus crisis weakens the case for immediate action by the Reserve Bank of New Zealand could be keeping the NZD bears at bay. Should the situation in the US and across Europe worsen, the NZD may witness haven flows.  Technical levels
 

Reserve Bank of Australia does not lack firepower. more to come ...

Reserve Bank of Australia does not lack firepower. more to come ...

Gold (XAU/USD) has bounced-off daily lows near $1902, as the bulls fight back control amid a sell-off in the US Treasury yields, triggered by the coro

Gold attempts bids amid coronavirus woes-led risk-aversion.US dollar’s haven demand returns, likely to cap gold’s upside. Focus on virus updates and sentiment on global markets. Gold (XAU/USD) has bounced-off daily lows near $1902, as the bulls fight back control amid a sell-off in the US Treasury yields, triggered by the coronavirus concerns-induced risk-aversion. The benchmark US 10-year Treasury yields drop further below the key 0.80% level, now trading at 0.768%, down 1.40% on a daily basis. The pessimism surrounding the American fiscal stimulus, election uncertainty and dwindling economic recovery weigh negative on the higher-yielding US rates and benefit the non-yielding gold. However, the further upside could remain elusive in the spot, as haven demand for the US dollar has returned in the overnight trades, with investors seeking safety in the buck ahead of next week’s US Presidential election. In the day ahead, the focus will remain on the virus developments globally and its impact on the market sentiment and dollar dynamics, which will likely have a major bearing on the yellow metal. Gold Technical levels Immediate resistance awaits at the Oct 27 high of $1911.46, above which the bulls will gear up for a test of the 50-DMA at $1919. To the downside, 21-DMA support at $1903 is the level to beat for the bears. The next cushion is aligned at 100-DMA of $1887. Gold: Additional levels  

The anti-risk Japanese yen is gaining ground on coronavirus-induced risk-off in stock markets and pushing USD/JPY lower. At press time, the currency p

USD/JPY feels the pull of gravity as risk sentiment weakens on coronavirus concerns. Deeper losses look likely, as the 4-hour chart shows a bear flag breakdown.The anti-risk Japanese yen is gaining ground on coronavirus-induced risk-off in stock markets and pushing USD/JPY lower.  At press time, the currency pair is trading largely unchanged on the day near 104.45, having put in a high of 104.56 early today. Technical charts suggest scope for deeper declines.   The pair fell by 0.4% on Tuesday, confirming a bear flag breakdown on the 4-hour chart. The pattern indicates a continuation of the sell-off from the Oct. 20 high of 105.75, possibly toward 104.00 (Sept. 21 low). A close above 105.00 is needed to invalidate the immediate bearish bias.  That looks unlikely as the bear flag breakdown is backed by a below-50 or bearish reading on the relative strength index. The 4-hour chart MACD is also producing deeper bars below the zero line, a sign of the strengthening of the downward momentum.  4-hour chartTrend: Bearish Technical levels  

AUD/JPY is currently trading largely unchanged on the day near 74.43, having put in a low of 74.21 early Wednesday. A convincing close below 74.43 wou

AUD/JPY's daily chart shows a head-and-shoulders bearish pattern. Dovish RBA expectations favor breakdown and deeper losses. AUD/JPY is currently trading largely unchanged on the day near 74.43, having put in a low of 74.21 early Wednesday.  A convincing close below 74.43 would confirm a head-and-shoulders breakdown or a bearish reversal pattern on the daily chart and open the doors to 70.40 (target as per the measured move method).  A breakdown looks likely as the second wave of the coronavirus cases is accelerating across Europe and in the US and is weighing over the risk assets. More importantly, it's threatening to derail the global economic recovery. As such, the better-than-expected Aussie third-quarter consumer price index (CPI) inflation released early Wednesday is unlikely to deter the RBA from cutting rates next month.  That said, the bearish case for AUD/JPY would weaken if the pair finds acceptance above 75.00. In that case, the focus would shift to 76.52 (Oct.  9 high).  Daily chartTrend: Bearish Technical levels  

The People's Bank of China (PBOC) has set the yuan reference rate at 6.7195 versus expectations for 6.7198.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.7195 versus expectations for 6.7198.

A better-than-expected Australian consumer price index (CPI) inflation data released soon before press time is struggling to draw bids for the Aussie

AUD/USD in stasis even as Australia's Q3 CPI beats estimates. The data is unlikely to deter the RBA from postponing additional easing. With coronavirus cases rising across the globe, the RBA is likely to cut rates next month.A better-than-expected Australian consumer price index (CPI) inflation data released soon before press time is struggling to draw bids for the Aussie dollar, leaving the AUD/USD pair largely unchanged no the day near 0.7120.  CPI sees stronger rebound Australia's CPI rose 1.6% quarter-on-quarter in the third quarter, bettering the estimate of 1.5% following the second quarter's 1.9% contraction. The annualized figure matched the estimate of 0.7%.  Meanwhile, the Reserve Bank of Australia's (RBA) trimmed-mean CPI increased 0.4% quarter-on-quarter versus expectations for 0.3% and -0.1% previously. The annualized trimmed measure came in at 1.2%. Though a welcome development, the upbeat data may not be enough to deter the RBA from reducing rates to a record low of 0.1% from 0.25% in November. That's because the coronavirus cases are again rising across Europe and in the US and threaten to derail the global economic recovery. "The continuation of the global recovery is dependent on containment of the virus," the minutes of the RBA's October meeting released earlier this month. The minutes added that the jobless rate is likely to remain elevated for an extended period, and the recovery is likely to be slow and uneven, keeping inflation subdued for some time.  As such, the AUD's dull response to Australia's upbeat CPI is not surprising. The currency may suffer losses during the day ahead as global stocks are facing selling pressure on prospects of fresh lockdown restriction across Europe.  Technical levels  

Australia CPI has arrived as follows: Aussie CPI AUSTRALIA Q3 RBA TRIMMED MEAN CPI +0.4 PCT Q/Q AUSTRALIA Q3 CPI (ALL GROUPS) +1.6 PCT Q/Q AUSTRALIA Q

Australia Q3 RBA trimmed mean CPI +0.4 pct QoQ. AUD/USD unchanged as markets look through data. Australia CPI has arrived as follows: Aussie CPI AUSTRALIA Q3 RBA TRIMMED MEAN CPI +0.4 PCT Q/Q AUSTRALIA Q3 CPI (ALL GROUPS) +1.6 PCT Q/Q  AUSTRALIA Q3 RBA WEIGHTED MEDIAN CPI +0.3 PCT Q/Q AUSTRALIA Q3 RBA TRIMMED MEAN CPI +1.2 PCT YR/YR AUSTRALIA Q3 CPI (ALL GROUPS) +0.7 PCT YR/YR  AUSTRALIA Q2 RBA WEIGHTED MEDIAN CPI +1.3 PCT YR/YR AUD/USD reaction AUD/USD is virtually unchanged on the release.  There is a higher focus on jobs numbers and November's decision will unlikely be heavily influenced by the CPI reading. AUD/USD Price Analysis: Bounded by support and resistance, watch for breakout Description of the Consumer Price Index The Consumer Price Index released by the RBA and republished by the Australian Bureau of Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The trimmed mean is calculated as the weighted mean of the central 70% of the quarterly price change distribution of all CPI components, with the annual rates based on compounded quarterly calculations.

Australia Consumer Price Index (YoY) meets forecasts (0.7%) in 3Q

Australia RBA Trimmed Mean CPI (YoY) above forecasts (1.1%) in 3Q: Actual (1.2%)

Australia Consumer Price Index (QoQ) above expectations (1.5%) in 3Q: Actual (1.6%)

Australia RBA Trimmed Mean CPI (QoQ) registered at 0.4% above expectations (0.3%) in 3Q

EUR/JPY fell to a one-month low of 122.99 a couple of hours ago, having declined by over 0.5% on Tuesday. Lockdown fears weigh Many Eurozone countries

EUR/JPY drops to the lowest level since Sept. 28.France and other Eurozone nations face lockdown on rising coronavirus cases. ECB is under pressure to deliver additional stimulus.  EUR/JPY fell to a one-month low of 122.99 a couple of hours ago, having declined by over 0.5% on Tuesday. Lockdown fears weigh Many Eurozone countries are imposing economically-painful national curfews and lockdown restrictions to combat the second wave of the coronavirus.  Notably, France is reportedly considering a month-long national lockdown, which could take effect from midnight on Thursday.  Indeed, the latest measures announced by some of the Eurozone nations are less severe than the ones implemented in the second quarter. Nevertheless, they are likely to torpedo the already fragile economic recovery in the common currency block, ramping up pressure on the European Central Bank to provide additional economic stimulus.  Hence, the market is offering euros and snapping up anti-risk currencies like the Japanese yen and the US dollar. At press time, the pair is trading near 123.07.  Technical levels  

Australia's third-quarter Consumer Price Index is on the slate for today. The headline inflation is expected to bounce back to 1.6% on the quarter, wi

Australia's third-quarter Consumer Price Index is on the slate for today.  The headline inflation is expected to bounce back to 1.6% on the quarter, with child care and petrol the main drivers, and trimmed mean inflation to come in at 0.4% Q/Q, as forecasted by analysts at ANZ bank. ''This would leave the annual rate unchanged at 1.2%, well outside the RBA’s target band.'' Meanwhile, the market and analysts at Westpac expect a just 1.5% number and 1.1% jump respectively (prior: -1.9%). 
The analysts at Westpac said that the trimmed mean should see a flat result, however, with rents and the HomeBuilder grant weighing, and inflation elsewhere restricted by narrowly-focused consumption. In other analysis, analysts at TD Securities are expecting a bounce in headline CPI on the unwind of the full government childcare subsidy, the rise in fuel as crude rebounded and removal of free before and after school care while falling rents serve as a drag.  Meanwhile trimmed mean inflation is expected to remain at 1.2% YoY, well below the RBA's 2-3% target band.  Implications for AUD The Aussie has been pressured of late with increasing positioning on the offer expected that the Reserve Bank of Australia will need to cut interest rates sooner than later.  Indeed, the idiosyncratic downside risks to the currency remain rather significant. Markets are retaining a very bearish stance which may put a ceiling on further AUD gains and a weak print today will potentially hurt the currency.  However, this falls on a week where Chinese leaders will meet to set out their 5-year plan. with a focus on improving self-sufficiency, there is quite a lot at stake for Australian exports and AUD may face some supply as a result.  So, barring any major surprises in today's data, it is doubtful that the AUD will react fiercely to the release with a higher focus on jobs numbers and November's decision will unlikely be heavily influenced by the CPI reading. AUD/USD technical analysis AUD/USD Price Analysis: Bounded by support and resistance, watch for breakout    

United Kingdom BRC Shop Price Index (YoY) up to -1.2% in September from previous -1.6%

In an update to yesterdays analysis, GBP/USD Price Analysis: Bulls could emerge again on test of 1.3080, the price action of cable has been bearish wi

GBP/USD is denying the bulls a clean break to the upside.Bulls remain in play while above the critical support. In an update to yesterdays analysis, GBP/USD Price Analysis: Bulls could emerge again on test of 1.3080, the price action of cable has been bearish within a bullish setup, although the support structure holds and so long as it does, the bias remains with the upside. The following illustrates the daily bullish prospects followed by a 4-hour chart analysis where price action can be monitored from: Daily chart 4-hour chart

AUD/USD is currently trading at 0.7117, under some pressure in early Asia ahead of key data for the day ahead. A slightly risk-on tone in other asset

AUD/USD is wilting in early Asia on COVID-19 woes and ahead of key data. There are downside risks to the AUD should US election polls narrow from here.AUD/USD is currently trading at 0.7117, under some pressure in early Asia ahead of key data for the day ahead.  A slightly risk-on tone in other asset classes has soured into the close on Wall Street and early Asia following the confirmation of speculation that part of Europe's economic activity is about to be locked down due to the rapid spread of the second wave of COVID-19. In recent trade, the news that the French President Emmanuel Macron is expected to announce a nationwide (degree uncertain) lockdown on Wednesday during a televised address to the nation at 8 pm that will start on Thursday night has pressured risk asset classes. Risk-off tones will likely be felt in the commodity sector for which AUD trades as a proxy to. Both copper and oil are down today already and the CRB index is weaker, capped by the risk-off flow. Meanwhile, overnight, AUD/USD chopped a little higher, to 0.7135, in relatively subdued trade and regional equities were mostly well contained.  The mood on Wall Street was more positive which could underpin Aussie stocks and potentially buoy the currency considering how well the spread of the coronavirus has been contained in Australia in comparison to the US and Europe.  The US polls a major focus Meanwhile, US polls continue to favour a sweeping Biden victory in the US elections which is supportive of risk appetite and weighs on the greenback. However, if the polls tighten between now and the election day, November 3rd, then the Aussie could come under some pressure given that the US dollar could start to rise.  In fact, Donald Trump has narrowed Joe Biden's lead in the crucial battleground state of Pennsylvania, increasing from 44.7 points on 25 October to 45.1 points the next day, as the Democratic contender slipped 0.1 points over the same period.  Biden, meanwhile, currently holds an advantage that is four times larger than Hillary Clinton's was at this stage in 2016. Aussie CPI ahead For the day ahead, Australia’s third-quarter consumer price index report is due at 11:30 am Syd/8:30am Sing.  ''A 1,400% rise in childcare prices and a lift in fuel prices will drive a bounce in headline inflation in Q3,'' analysts at Westpac explained.  ''The market and Westpac expect a 1.5% for the quarter and 1.1% jump respectively (prior: -1.9%). 
The trimmed mean should see a flat result, however, with rents and the HomeBuilder grant weighing, and inflation elsewhere restricted by narrowly-focused consumption (prior: -0.1% market f/c: 0.3%, Westpac: 0.0%).'' AUD/USD levels  
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