Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. These products may not be suitable for all investors. It is important to fully understand the risks involved and seek independent advice if necessary. You should carefully consider whether you understand how CFDs work and whether you can afford to take the high risk of losing money. The value of your investment may go down as well as up.
Please review our Legal Documents to understand the risks involved before you invest. See your rights and responsibilities as a retail client.
Market Overview
Macro & Geopolitics
Global markets started the week cautiously amid uncertainty ahead of the US midterm elections, selling pressure in technology stocks, and diplomatic developments in the Middle East. A strengthening likelihood of a diplomatic resolution in US-Iran talks is pulling oil prices lower, easing energy and inflation pressures. On the other hand, the ECB's warnings about high valuations in technology companies and fragilities in financial markets are keeping risk sentiment on edge.
Even though US manufacturing data came in strong, elevated production costs are keeping uncertainty around the Fed's rate policy alive. Mixed manufacturing signals from China are also complicating the global growth outlook. The US midterm elections and the economic data due in the coming days will be decisive for the direction of the dollar, bond yields, and global risk appetite.
Today's Economic Calendar (GMT)
| Time | Ccy | Event | Fcst | Prev |
|---|---|---|---|---|
| 15:00 | USD | Manufacturing PMI | 56.0 | 55.9 |
| 15:00 | USD | JOLTS Job Openings | 7.110M | 7.079M |
EUR/USD · FX Major
The Eurozone manufacturing sector outperforming expectations in October points to resilient economic activity. On the other hand, rising energy costs are increasing inflation concerns. ECB Governing Council member Peter Kazimir's comment that further rate hikes could be needed may strengthen expectations of tighter monetary policy, providing support for the euro.
For the pair, the 1.1220 level stands out as an important resistance zone, while on downside moves the 1.1160 level can be followed as the first strong support point.
| Resistance | Support |
|---|---|
| 1.1220 | 1.1160 |
| 1.1250 | 1.1130 |
| 1.1280 | 1.1100 |
GBP/USD · FX Major
Markets are pricing in a BoE rate hike from 3.75% to 4.00%, with the bank's forward guidance on future rate policy after the decision set to be decisive for sterling's direction. On the US side, the approaching midterm elections and selling pressure in technology stocks are among the factors limiting the dollar's gains.
Should the pair maintain its upward trajectory, the 1.3400 level stands out as a strong resistance, while on possible downside moves the 1.3360 level can be followed as the first important support zone.
| Resistance | Support |
|---|---|
| 1.3400 | 1.3360 |
| 1.3420 | 1.3340 |
| 1.3440 | 1.3320 |
XAU/USD · Metal
Gold rebounded at the start of the new week after hitting roughly a one-year low in the previous session, supported by a sharp pullback in oil prices and a weaker dollar. Ongoing diplomatic talks between the US and Iran easing concerns over energy supply are pulling oil prices lower, contributing to a lessening of inflation pressures.
On the other hand, the continued strength of expectations that the Fed could raise rates in December shows that rate-driven pressure on the precious metal persists. As a result, while the pullback in oil and the dollar is supporting gold, elevated rate-hike expectations remain the key risk to the recovery.
Technically, 3950 and 3980 stand out as key resistance levels respectively, while 3890 and 3860 remain the support levels to watch on the downside.| Resistance | Support |
|---|---|
| 3950 | 3890 |
| 3980 | 3860 |
| 4010 | 3830 |
XAG/USD · Metal
Silver started the new week with a strong rebound after sharp losses in the previous session, supported by falling oil prices and a weaker dollar. Continuing diplomatic talks between the US and Iran are easing inflation concerns stemming from energy costs, supporting buying interest in precious metals.
This week, the US midterm elections, JOLTS and ISM Services PMI data, along with the nonfarm payrolls report and unemployment rate, will be closely watched. These data points could influence XAG/USD's direction through their effect on the dollar and the Fed's rate expectations.
Technically, $52 and $54 stand out as key resistance levels respectively, while $47 and $45 remain the support levels to watch on the downside.
| Resistance | Support |
|---|---|
| $52 | $47 |
| $54 | $45 |
| $56 | $43 |
Brent Oil · Energy
Expectations that progress could be made in US-Iran diplomatic talks are increasing selling pressure in the oil market. Iran's government adopting a more flexible stance toward negotiations, along with continuing Qatar-mediated contacts, is strengthening expectations that shipments through the Strait of Hormuz could resume, reducing the supply-driven risk premium.
This week, the US midterm elections, shipping security in the Strait of Hormuz, and the progress of diplomatic talks will be closely watched. US oil inventory data is also among the developments that could be decisive for Brent crude's direction.
Technically, $106 and $108 stand out as key resistance levels respectively, while $101 and $98 remain the support levels to watch on the downside.
| Resistance | Support |
|---|---|
| $106 | $101 |
| $108 | $98 |
| $110 | $95 |
The $643.3 million in net outflows from Bitcoin ETFs points to weakening institutional investor demand. On the other hand, rising Bitcoin withdrawals from crypto exchanges and the presence of sizable short positions on CME are raising the possibility of a supply squeeze and sharp price moves tied to short-covering.
The US midterm elections are being closely watched for their implications on the balance of power in Congress and regulatory expectations for the crypto sector. In addition, Friday's nonfarm payrolls and unemployment data could be decisive for Bitcoin's direction by influencing the Fed's rate-policy expectations.
Bitcoin · Crypto
The 78K level stands out as a strong resistance, while the 73K area can be followed as the first support zone on possible pullbacks.
| Resistance | Support |
|---|---|
| 78K | 73K |
| 80K | 70K |
| 83K | 68K |
