The Fed kept the powder dry during their last meeting and there was no change in their monetary policy. We also had the Chinese inflation data for October this week. It was below expectations (PPI was 3.3% y/y down from 3.6% y/y in September and CPI was 2.5% y/y unchanged). Moving on to the oil market, it has entered in a bear market territory. OPEC and oil producers outside OPEC will meet on Sunday to discuss the strategy for 2019. The divided government over in the US after the US midterm election will remain the key focus for the markets.
With a large reversal signal at the upper boundary of the descending channel, as well as an existing bearish setup, we maintain our negative bias. Support is at 1.1300 and more meaningful support is seen at the lower boundary of the channel at 1.1180/1.1150.
The pair’s early strength stalled at 1.3130/1.3150. This is because the pairs has re-tested this upward trend line and failed to stay above it. Our bias though stays bearish for now as long as the pair is trading below 1.3080. Support is initially seen at 1.2950, then 1.2880.
This week we saw the rally for the USD/JPY pair. We have broken the major barrier at 112.50/112.80 and this confirms the bullish sentiment. Now, the spotlight is on the upward channel and the upper line of this channel is mainly in focus which is at 115.80. Support is at 112.80/112.50.
The weakness in the gold price was triggered by the key resistance level of 1238. Going forward, we expect more of consolidation for the precious metal and the consolidation range is from between 1209 and 1235. However, if the price drops below $1209, we would see bears picking up the steam. This could lead the price to 1195/1192. Resistance remains at 1228/1235.
Oil is still under a strong selling pressure. However, the current selloff may ease off soon. Our bias is for a corrective move to prevail. The support is seen at 58.50, and the price of oil could recover from. Resistance is initially seen at 62.50.
The week ended on a positive note, after the strong bounce from key support at 24,150/24,180. The next resistance level is at 26,810. The price is trading above the major moving averages 50 and 100 and this confirms the bullish bias.