The New Zealand dollar has experienced significant volatility in recent weeks, with a 3.24% surge in the previous week followed by a 1.19% decline this week. This fluctuation reflects the uncertainty and sensitivity of the currency to both domestic and international economic developments.

The RBA's decision to raise interest rates by a quarter point to 4.35% had unexpected consequences, as the Australian dollar depreciated by 1.16% against the US dollar. Despite the rate hike, the RBA's statement contained somewhat dovish language, suggesting that the primary goal was to bring inflation back within its target range in a reasonable timeframe. This signalled a potential slowdown in the RBA's tightening cycle, leading to market expectations that rate hikes may not be imminent. Investors have chosen to focus on the dovish sentiment and have largely overlooked the rate increase, which comes after four consecutive rate pauses. This reaction underscores the belief that the RBA might hesitate to raise rates, even with inflation consistently above the 2%-3% target range and stubbornly high inflation expectations.

In addition to the RBA's actions, the New Zealand dollar was also influenced by mixed Chinese data. While Chinese imports rebounded in October with a 3.0% year-on-year gain, surpassing market expectations, exports declined by 6.4%, marking the sixth consecutive decrease. This decline underscores ongoing weak global demand for Chinese goods, which has implications for New Zealand's trade relationship with China.

Looking ahead, New Zealand is set to release its Inflation Expectations for the fourth quarter, with a market consensus of 2.60% following a 2.79% gain in the third quarter. Any unexpected outcome in this report could lead to significant movements in the New Zealand dollar, as it will provide insights into the country's inflation outlook and potential monetary policy implications.

From a technical perspective, NZD/USD is currently testing support at 0.5929, with the next support level at 0.5858. On the upside, resistance levels are found at 0.5996 and 0.6069. The market structure appears bullish, with the possibility of higher highs as the currency rejects the support zone. However, it remains susceptible to the evolving economic landscape, making it important for traders and investors to stay vigilant and adaptable in response to changing market dynamics.

ENTRY PRICE : 0.5950

STOP LOSS : 0.5860

TAKE PROFIT :  0.6040

Sentix investor confidence index in the eurozone rose from -21.90 to -18.6 in November, the highest level since June, exceeding the market expectation of -22.5.

The details of the report are also encouraging, and the current situation index has slightly improved from -27.0 to -26.8. The expectation index was also positive, rising from -16.8 to -10.0, the highest point since February.

However, it is important to admit that expectations are still in a negative state. Sentix reports that "the reduction of negative momentum is an initial sign of improvement, but only when expectations turn positive can the alarm be lifted".

A remarkable development is the rise of Sentix's "inflation" theme index, which has entered a positive region for the first time since the beginning of 2020, indicating that inflation as a key issue may be weakening. The index currently stands at +6.5, a development that may reduce the urgency for the European Central Bank (ECB) to take action.

On the market side, good consumer confidence failed to boost the EUR. Until the New York session, the EURUSD further fell below 1.0665, which was a 38.2% Fibonacci retracement level of the EURUSD's rebound from last week's low of 1.0517.

However, intraday and daily structural studies show that trend momentum remains bullish, but these signals are weakening as the EUR moves lower. Bullish DMIs should curb the EUR's decline, at least for now. Support should become firmer at the 1.0600 low.

Now, the market is waiting for Fed officials to comment. More risk sentiment will provide some trading opportunities for the EURUSD along with the 10-year U.S. Treasury Securities yield.

With the EURUSD showing further retreat, the intraday bias for the EURUSD has shifted from very strong to neutral, and there may be some consolidation. Nonetheless, intraday structural studies suggest that momentum remains bullish, and further rallies are favorable as long as the 55-hour and 4-hour SMAs (currently at 1.0637) are held. After that, if bulls decisively break above 1.0764 resistance (the 38.2% Fibonacci retracement of the range from 1.1274 to 1.0447 is at 1.0763), the next uptrend will extend from 1.0447 to 61.8% Fibonacci retracement of 1.0958.

However, a sustained break below 1.0637 would indicate that Friday's strong rally is over, with short-term bearish targets at the 1.0515 support level and then the low of 1.0448.

From a broader perspective, the price action from 1.1274 is seen as a correction to the rise from 0.9534 (the 2022 low). The rise from 1.0448 is tentatively seen as second support. Therefore, while a further rally is possible, the upside should be limited by 1.1274 to contribute to the continuation of the downward pattern.

Overall, similar to other USD-associated assets, if the EURUSD rebounds, it will be moderate, and it could continue to fall in later trading. It is recommended to go short at highs.

Trading direction: Short

Entry price: 1.0700

Target price: 1.0450

Stop loss: 1.0770

Deadline: 2023-11-21 23:55:00

Support: 1.0643, 1.0614, 1.0568

Resistance: 1.0696, 1.0757, 1.0791

The RBA announced that it raised its cash interest rate target by 25 basis points to 4.35%, in line with market expectations. After this move, the RBA sent a signal to shift to a neutral policy stance, saying that "whether it is necessary to further tighten monetary policy will depend on data and changing risk assessment".

In a statement, the RBA said that inflation was "still too high" and proved to be "more persistent than expected a few months ago". The interest rate hike today is to "be more confident" that inflation will return to the target level within a "reasonable time range".

Market observation: The policy prospect of the RBA is affected by "great uncertainty", especially the persistence of inflation in the service industry, which shows obvious flexibility in the international arena and may be reflected in the market.

In the case of slowing economic growth, the effectiveness of monetary policy changes and the response of wage setting and pricing decisions are unpredictable, especially considering the current tight labor market. The prospect of household consumption is also full of uncertainty.

Looking overseas, the RBA's statement revealed the persistent global uncertainties, especially the economic trajectory of China and the far-reaching impact of international conflicts, which further increased the dimension of RBA's consideration.

Overall, the interest rate hike is in line with expectations. After the CPI data in the third quarter was announced higher than expected, the market began to price in an interest rate hike. After staying put since June, the new RBA Chair Bullock told the market that the RBA will focus on reducing inflation despite signs that the labor market is weakening. This decision reminds investors that the RBA not only relies on data but also reflects real-time economic data in its every meeting decision. This means that the fluctuation of global bond yields will continue.

The AUD's response is a typical " buying the rumor and selling the news". In the past few weeks, the expectation of raising interest rates has been heating up, making the AUD one of the biggest gainers among G10 currencies. At the same time, with the rapid short-covering of the USD, the continued tightening of policies by the RBA failed to benefit the AUDUSD.

The AUD continued to fall despite a 25-basis-point rate hike by the RBA on Tuesday. The AUDUSD also faced losses due to the positive performance of U.S. Treasury Securities yields, which helped the USD rebound from two-month lows.

With today's sharp pullback, the AUDUSD's intraday bias has shifted from extremely bullish to neutral. For now, another rise will remain modest as long as the minor support at 0.6411 holds. Moreover, a sustained break above 0.6510 resistance would indicate that the overall decline from 0.7156 could be completed in three waves down to 0.6269. The bulls could then rally to the medium-term trendline resistance (currently at 0.6700). However, a loss of support at 0.6411 would indicate that the strong rally would end and the market would turn back to the downside to test the 0.6269 low again.

From a broader perspective, we have yet to confirm that the downtrend that started from the 2021 high of 0.8010 has been completed. While the current rally from 0.6269 could continue higher, it could just be the third leg of the corrective pattern from 0.6169 (the 2022 low). For now, the medium-term bearish trend will persist as long as the 0.6894 resistance level is held. It is recommended to go short at the highs when the bulls come to near the 0.6510 level.

Trading direction: Short

Entry price: 0.6475

Target price: 0.6219

Stop loss: 0.6535

Deadline: 2023-11-21 23:55:00

Support: 0.6411, 0.6386, 0.6345

Resistance: 0.6475, 0.6502, 0.6522

WTI crude oil fell sharply on Monday, erasing all the gains after Israel's Hamas attack on October 7. The crude oil market seems to be coming to an end for a turbulent month.

In the Middle East, Israel's ground operations in Gaza have not yet triggered a wider regional conflict. Although Prime Minister Benjamin Netanyahu has ruled out the possibility of a ceasefire, the threat that may endanger the supply of crude oil seems to have not been resisted.

WTI and Brent crude oil prices are expected to fall as the risk premium caused by the conflict recedes and the concerns of a global economic slowdown are highlighted again. The possibility of a lower supply of crude oil in the Middle East has not disappeared (if this happens, oil prices will rebound to the annual peak, or even higher, depending on the degree of disruption). However, before that, the price is not expected to rise sharply.

Elsewhere, the U.S. Department of Energy (DOE) said on Monday that the U.S. is seeking to purchase up to 3 million barrels of oil to replenish the country's strategic oil reserves, which will be delivered in January 2024. The U.S. Department of Energy said in a statement: "This is the second solicitation for January 2024 delivery as DOE aims to purchase oil when it can purchase at a good deal for taxpayers." Last month, the U.S. government indicated it wanted to buy 6 million barrels of crude oil for delivery in December and January next year.

Finally, WTI crude oil may get clues from the inventory data of API and DOE, and the decrease in inventory data may also indicate a decrease in official government data. This shows that the demand is still high, which may make the crude oil price rebound from the support area near the previous period.

On the other hand, the increase in inventory will indicate that the output is strong or consumption continues to slow down, which may lead to a decline in crude oil prices.

Please note that the safe-haven capital flow caused by recession concerns and the expectation of rising global interest rates may continue to support the safe-haven USD and drag down the crude oil price. After all, the prospect of higher borrowing costs may put pressure on business and consumer activities, thus limiting the demand for fuel and energy commodities.

WTI crude oil prices continue to fall in the downtrend channel in the short term because the price just failed to rebound from the resistance level and fell again.

The Fibonacci Extension tool shows the downside targets that the bears are aiming for. Crude oil prices have fallen below US$80.00, but there still seems to be enough bearish momentum to sustain its slide.

Next, the price may pause dropping a bit and rally to US$79.55 and more rallies will test the downward pressure line at US$80.70 in search of a return to fair value. Thereafter, the pullback will continue.

Currently, the price of crude oil is in the US$79.20 range and the technical indicators look mixed. Stochastic is already in the oversold zone, indicating that bears are exhausted; therefore, a move higher means that the bulls are returning. However, the Relative Strength Index still has more room to fall before it indicates oversold conditions; therefore, the sell-off could continue until the oscillator picks up.

Overall, if support above US$78.54 holds, crude oil could rise again to the top of the downtrend channel near the SMAs (do not buy at the uptrend even with the bullish outlook). However, the 100 SMA is lower than the 200 SMA, suggesting that the downtrend is more likely to be extended than reversed. It is recommended to go short at the highs.

Trading direction: Short

Entry price: 80.00

Target price: 73.23

Stop loss: 82.00

Deadline: 2023-11-21 23:55:00

Support: 80.00, 79.23, 77.62

Resistance: 82.00, 82.58, 82.79

During Tuesday's (November 7th) Asian session, spot gold oscillated narrowly, and it is now trading at 1975. During the European and the U.S. sessions yesterday, the rebounding USDX and U.S. bond yields weighed on the gold price, and gold depreciated with oscillations to the lowest level of 1977 after surging to 1993. The trading space was not big, but investors who sold at highs could make profits. The logic of the current market trade transferred to the Fed stopping interest rate hikes in December, which pushes up the overall risk appetite. The U.S. stock market has ascended for 7 consecutive days, likely by taking the opportunity of a weaker dollar and slower bond issuance. The risk appetite is expected to improve in the short term, and the current gold pattern is weak. Thus, gold will decline under pressure, and investors should maintain the bearish view until the pullback is sufficient and the technical indicator conditions ease. The current fundamentals are complex. The Palestinian-Israeli conflict is difficult to subside soon. Unlike the Russian-Ukraine war, however, the Palestinian-Israeli conflict will not be prolonged under the armistice agreement the United Nations reached. Thus, gold lacks a long-term safe-haven driving factor. However, the war is at any time possible to expand. If oil-producing countries participate in it, gold will rebound to a new high. Therefore, investors need to focus on technicals and trade quickly without chasing the market or being greedy.

Data: The Eurozone Sentix investor confidence index was -18.6 in November. It was expected to be -22.2, compared to a previous reading of -21.9. Moreover, the Eurozone services PMI was 47.8 in October, flat at the initial reading, a 35-month low. Germany services PMI was 48.2 in October and the initial reading was 48. France services PMI's final reading was 45.2 in October, while the initial reading was 46.1.

News: Fed Governor Cook said, short-term policy rate expectations do not seem to promote long-term interest rates to rise. If the commercial mortgage default rate led to a sell-off, commercial real estate prices "may fall sharply". He also thought that the Fed could not foresee all the risks, but it could enhance its resilience to shocks, especially for large banks' resilience.

Today's attention: The Eurozone PPI, U.S. trade account for September, and more importantly, speeches by Fed Chairman Powell and several Fed officials this week. 

Gold plummeted yesterday. It opened at a high of 1993 and then dropped with oscillations, closing the daily chart lower and failing to reach the shoulder at 1997. Gold is under a weak pattern and still below 1997. If it fails to rise above the 1997 level at the beginning of this week, gold may retrace to our expected level. Technically, MACD forms a death cross at highs, and the bearish momentum has just begun to release. Furthermore, the Candlestick Chart also shows a rounding top pattern with no signal for gold to stop falling. Nevertheless, with the price close to the important support area of 1950, there will be a decline in the hourly chart. However, this decline will be small, and investors should catch the opportunity carefully.

Trading Recommendations: Sell at highs. If gold ascends to the range between 1982 and 1986, investors could go short with small positions, and set the stop-loss at 1990. To take profits, the first target will be at 1972, where they can reduce the position size and move the stop-loss to breakeven, and the second target should be at 1965. If gold appreciates to 1997, investors could stop going short because gold may reach its top later.

Trading direction: Short

Entry price: 1986

Stop loss: 1965

Stop loss: 1990

Support: 1970.000/1953.000

Resistance: 1997.000/2003.000

During Tuesday's (November 7th) Asian session, WTI crude oil oscillated narrowly, and it is currently trading at 80.3 dollars/bbl. Yesterday, WTI was too weak to rebound, but at least the decline eased, closing the daily chart slightly lower. It opened lower today due to a technical extension of decline, and bears and bulls are largely balanced. There was very little room for us to trade oil yesterday. It is possible that yesterday's market offered some opportunities for other investors, but it was not what we were looking for. It's like when you weave a big net with 2-finger-sized holes, then you are destined to just let go of the small fish that are smaller than 2 fingers. Thus, when choosing a trading system, you must give up a lot of opportunities that do not belong to you. For sure you may earn something from it, but this is not based on systematic trading, and those random gains will only weaken your executive force and destroy your trading logic. At present, neither bears nor bulls can overwhelm the other, and short sellers are still trading the slower demand in the major economies under the downward pressure of the economy. In the short term, the bears will dominate the market, but I still maintain the plan to go long at lows for the following reasons. Firstly, the U.S. plans to buy up to 3 million barrels of crude oil next January to supplement the SPR, and the current price is in the acceptable range of the United States. Thus, the downside space will be small. Secondly, the war is still ongoing. Although it is cooling, there is the possibility of large-scale outbreaks at any time, and the oil price is even possible to surge to 100 once the oil-producing countries participate in the war. Lastly, the OPEC+'s production cuts are valid. It did not end early as expected, and the oil price has come down from $94 to $80. I think the retracement is sufficient. Even though Saudi Arabia and Russia said on November 6th that they would continue the additional production cuts of 1.3 million barrels to the end of December, it won't affect much the outputs. Instead, their statement is more like a psychological factor to maintain the stability of the oil price. In addition, they aimed to remind the bears that the price would be stable soon because they are still cutting production.

Today's Focus: API crude oil inventory data, the Eurozone PPI, the U.S. trade account for September, and more importantly, speeches by Fed Chairman Powell and several Fed officials later.

Oil oscillated narrowly yesterday from 80.5 to 82. It showed a big oscillating range, while the trading space for us was limited. Besides, the daily chart closed with a doji star that has a long upper shadow, indicating balanced bullish and bearish forces. According to the hourly chart, the MACD's bearish momentum is releasing, and there aren't any signals for a reversal in the candlestick chart. Nevertheless, the price will not fall much in the hourly chart as it has approached the Bollinger lower band. If it reaches the Bollinger lower band, it will be a good chance for us to go long. However, the recent fall from highs suggests strong upper resistance, so investors should not expect too much shortly. When the price begins to reverse in the hourly chart, the rising space may increase. 

Today's trading recommendations: Buy at lows. If WTI retraces back to 80.2, try to go long with small positions and set the stop-loss at 79.7. To take profits, the first target will be at 82.5, where investors can reduce the position size and move the stop-loss to breakeven, and put the second target at 83.5. If WTI plummets below 80.0, investors should not go long today unless there is a sign of stopping declining after a plunge.

Trading direction: Long

Entry price: 80.000

Target price: 82.500

Stop loss: 79.500

Support: 80.000/77.800

Resistance: 81.500/83.500