Market looking for another 50 from Fed

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The door is now open for the next major upside extension towards the 2018 high at 1.4377. Any setbacks should be well supported ahead of 1.2500.

• R2 1.3400 – Figure – Medium
• R1 1.3360 – 24 September/2024 high – Medium
• S1 1.3248 – 23 September low – Medium
• S2 1.3145 – 18 September low – Strong

GBPUSD – fundamental overview

UK composite PMIs remained in expansionary territory which really stood out on Monday given the softer Eurozone data. This has allowed the Pound to hold up well despite Euro declines. Key standouts on Tuesday’s calendar come from German Ifo reads, Canada manufacturing sales, US Case Shiller, US house prices, US consumer confidence, the Richmond Fed manufacturing index, and a Bank of Canada Macklem speech.

USDJPY – technical overview

The market has entered a period of correction after extending the uptrend to a multi-year high through 160.00. Critical support comes in around 140.00, with only a monthly close below the barrier to compromise the bullish outlook. A higher low is ideally sought out above 140.00 in favor of a bullish continuation.

• R2 145.00 – Psychological – Medium
• R1 144.50 – 19 September high – Medium
• S1 141.74 – 20 September low – Medium
• S2 139.58 – 16 September/2024 low – Strong

USDJPY – fundamental overview

The Yen is consolidating a recent run of declines and hasn't done much thus far on Tuesday after taking in a mostly uneventful flash PMI report. Jibun Bank said that the September report showed growth momentum was sustained throughout the third quarter of 2024, and hinted at a stronger Q3 GDP reading. They, however, warned of headwinds to growth in Q4, saying that while there has been a sustained fall in the levels of outstanding business, this was largely due to a solid reduction in backlogs in the manufacturing sector, which could dampen growth towards the end of the year if demand didn't pick up. Key standouts on Tuesday’s calendar come from German Ifo reads, Canada manufacturing sales, US Case Shiller, US house prices, US consumer confidence, the Richmond Fed manufacturing index, and a Bank of Canada Macklem speech.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6200 would give reason for rethink. Back above 0.6900 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.6872 – 28 December high – Strong
• R2 0.6856 – 24 September/2024 high – Medium
• S1 0.6737 – 19 September low– Medium
• S2 0.6622 – 11 September low – Strong

AUDUSD – fundamental overview

The Australian Dollar has been bid up to a fresh yearly high after the RBA left policy unchanged while maintaining its hawkish stance. Key standouts on Tuesday’s calendar come from German Ifo reads, Canada manufacturing sales, US Case Shiller, US house prices, US consumer confidence, the Richmond Fed manufacturing index, and a Bank of Canada Macklem speech.

USDCAD – technical overview

A sustained hold above 1.3000 over the past several months signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4000 area, with a break to open a retest of the 2020 high just ahead of 1.4700. Setbacks should be very well supported down into the 1.3000 area.

• R2 1.3648 – 19 September high –Strong
• R1 1.3600 –Figure – Medium
• S1 1.3487 – 23 September low – Medium
• S2 1.3466 – 6 September low – Strong

USDCAD – fundamental overview

The Canadian Dollar wasn't able to do much with a recent solid Canada retail sales number and higher oil prices, but finally got going on Monday after consumer confidence report impressed, coming in at the highest reading since May 2022. Key standouts on Tuesday’s calendar come from German Ifo reads, Canada manufacturing sales, US Case Shiller, US house prices, US consumer confidence, the Richmond Fed manufacturing index, and a Bank of Canada Macklem speech.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action.

• R2 0.6299 – 29 August/2024 high – Strong
• R1 0.6281 – 23 September – Medium
• S1 0.6176 – 17 September low – Medium
• S2 0.6106 – 11 September low – Strong

NZDUSD – fundamental overview

The New Zealand Dollar remains well in demand despite the Westpac-McDermott Miller employment confidence reading falling by 2.2 points to 89.2 in Q3, returning to around pandemic-era lows. Notably, job availability was seen as one of the major drags, tracking the softness in the New Zealand economy. Key standouts on Tuesday’s calendar come from German Ifo reads, Canada manufacturing sales, US Case Shiller, US house prices, US consumer confidence, the Richmond Fed manufacturing index, and a Bank of Canada Macklem speech.

US SPX 500 – technical overview

The longer term uptrend remains intact and dips continue to be exceptionally well supported. Critical support comes in at 5093, with only a break back below this level to compromise the structure and open the door for a more significant corrective decline. Until then, the focus remains on a continued push to fresh record highs.

• R2 5750 – Psychological– Strong
• R1 5744 – 19 September/Record high – Medium
• S1 5596 – 13 September low – Medium
• S2 5540 – 12 September low – Medium

US SPX 500 – fundamental overview

The US equities market remains exceptionally well supported in 2024 on the back of an ongoing expectation for more rate cuts than less going forward. Investors are feeling better about a soft landing in the US economy and this has also been accompanied by an accommodative adjustment of Fed policy. It will however be important to keep an eye on inflation, bigger picture economic data and geopolitical risk in the months ahead.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and this next major upside extension into the 2500-3000 area. Setbacks should now be well supported above 2300 on a monthly close basis.

• R2 2650 – Psychological– Strong
• R1 2637 – 24 September/Record high – Medium
• S1 2472 – 4 September low – Medium
• S2 2432– 15 August low – Medium

GOLD (SPOT) – fundamental overview

The yellow metal has pushed record highs in 2024 with solid demand from medium and longer-term accounts. These players are more concerned about inflation, geopolitical risk and a less upbeat global growth outlook. All of this should keep the commodity well supported over the coming months.