Intraday Market Thoughts

USD Retreats, Metals Advance Pre Jobs

by Adam Button
Nov 1, 2018 13:20

Risk-on trades attempt to maintain the flow but late dips in equities and USD/JPY may be pointing to more trouble ahead. On the month, the yen was the top performer while the Swiss franc (shockingly) was the laggard. USD is down across the board, with silver and gold in the lead. The BoE made a slight downward revision to 2019 GDP while sticking to the plan to gradually raise rates. US manufacturing ISM is up next, expected at 59 for Oct from 59.8  Premium trades went long EURUSD yesterday at 1.1320, citing 5 key reasons and 4 charts.

الإتفاق الرباعي للشراء تغطية اسباب آخر صفقتين

As it were, the S&P 500 climbed 1.1% Friday but it had been up nearly double that with one hour of trading remaining but stocks slumped hard late. USD/JPY also dropped to 112.90 from a two-week high of 113.39 in part due to heavy selling into the London fix.

We're hesitant to take signals from any month-end moves and the first part of November will also be scrambly with the Nov 6 midterms also fast approaching.

Technicals or Fundamentals ?

Taking a step back and focusing on fundamentals underscores the problems for the euro. It was the second worst performer in October in a month where risk aversion should have helped it beat the commodity currencies at the very least. Technically, however, EURUSD held the 1.1300 low from mid August as did GBPUSD at 1.2760. The same could be said for USDCNY failure to break 7.00 before dropping to 6.93 as gold regains 1230. That will be a key level to watch in the days ahead but unless eurozone data turns around in a hurry, a breakdown is inevitable. The ECB's De Cos was one of the first to acknowledge a slowdown Wednesday and a dovish turn would cut down the euro. The Premium trades went long EURUSD yesterday at 1.1320, citing 5 key reasons and 4 charts.


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