The analysis of Forex market (4th November)

CPT Markets
Nov 4 · 4 min read

Ray Shen|Forex Analyst|CPT Markets |Monday, 4th November 2019

The U.S. non-farm payrolls report for October was strong and revised up sharply, the general motors strike did not have a big impact and there are no signs of slowing U.S. economic growth. Mr. Powell seems sensible that there is virtually no case for further rate cuts. The data showed the labor department reported that employers added 128,000 jobs in October, a much better-than-expected 85,000, and wage growth returned to 3 percent. The unemployment rate, at 3.6%, remains near a 50-year low. The U.S. ISM manufacturing PMI for October was worse than expected, with the data showing that the U.S. ISM manufacturing PMI actually posted a reading of 48.3, 49, and 47.8. Separately, the U.S. ISM manufacturing employment index for September actually posted a reading of 47.70, up from 46.3.

The dollar index fell below the 200-day average of 97.40 under pressure, the lower short-term support at 97.00 integer level, then support at 96.50 near the lower, the upper pressure in the vicinity of 98.00.

GBP/USD

Although the new Brexit deal failed by 306 votes to 322, Mr Johnson’s disadvantage was not obvious, so the market was still optimistic about an orderly exit. Although Johnson’s motion to seek an early general election was rejected by parliament on Monday, Johnson’s acceptance of the EU’s decision to give Britain three months to leave the bloc until January 31 continued to cool fears of a no-deal Brexit. The pound rose further on Tuesday after markets largely priced in fears of a no-deal Brexit as the UK voted overwhelmingly to approve its new call for an early election on December 12, paving the way for the first December general election since 1923.

Sterling last week after a small decline continued to strengthen, the lower short-term support at 1.2800, then support below the 200 daily average of 1.2700, the upper short-term pressure at the 1.3000 mark, once effective upward break is expected to see high near 1.3200.

USD/JPY

On October 31st the bank of Japan announced its decision to keep interest rates unchanged. The dollar fell nearly 100 points against the yen. The yen continued to weaken throughout October as continued weakness in Japanese economic data and repeated public statements by the governor of the bank of Japan that he would cut interest rates if necessary raised expectations for a rate cut. Japanese markets took some comfort from data showing household spending rose for the ninth straight month in August. But separate data showed wages fell for the eighth straight month in August, adding to consumers’ woes just as the government began raising the sales tax in October.

The short-term pressure above at 108.50, next pressure will be 109.00, the short-term support below at 107.50, next support below at 107.00.

XAU/USD

Gold had a v-shaped reversal last week. Earlier in the week, gold fell to a one-week low near $1,480 on the back of a Brexit victory and improved international trade, as well as a “hawkish” rate cut by the Federal Reserve. However, gold hit the 1520 mark for the fourth time in a month as Powell said he would continue to watch data to decide whether to cut interest rates, as well as signs of weakness in U.S. inflation and consumption data, and a poor manufacturing PMI offset an unexpected improvement in non-farm payrolls.

The golden triangle pattern breaks through upward, but the pressure above is heavy. The short-term pressure is at the line 1520, next pressure above is at 1540, and the short-term support below is at 1500, and next support below is near 1480.

USO/USD

U.S. crude hit a one-month high at the start of last week on optimism about international trade, but oil prices fell for the first four days of the week and hit a one-week low as weak demand and concerns about OPEC’s deepening production cuts and the cancellation of the APEC summit in Chile tempered optimism about trade. But with Friday’s better-than-expected U.S. nonfarm data, better Chinese manufacturing data and positive international trade news, the triple bullish combination helped oil recoup most of its losses for the week.

New York crude is still in the range consolidation, the short-term pressure above the 200-day average line around 57.30, below the short-term support around 55.00, and next support in the 52.00–53.00 range.

PS: Today Focus

16:55 final German manufacturing PMI for October

17:00 final euro zone manufacturing PMI for October

23:00 final monthly rate of U.S. durable goods orders in September (%)

23:00 monthly rate of us factory orders in September (%)

20:30 the house of Commons has elected a new speaker

Tokyo stock exchange cultural festival, closed one day

Russia will be closed for solidarity day

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