The latest quarterly Gross Domestic Product (GDP) data for the United States has sent a strong signal to currency markets, underlining the Dollar's resilience and its robust growth path. With a GDP growth rate of 4.9% quarter-on-quarter, the U.S. economy continues to defy expectations and maintain a powerful trajectory. In this article, we delve into the implications of this GDP data for the U.S. Dollar and the broader financial landscape.

The standout figure from the GDP report is the 4.9% growth rate in the third quarter, surpassing expectations and showcasing the U.S. economy's ability to navigate challenging conditions. Despite facing restrictive monetary policies, the United States is displaying remarkable economic resilience.

Consumer spending emerged as the driving force behind this impressive growth. In the third quarter, it surged by 4.0%, a significant improvement from the 0.8% recorded in the second quarter. Even in the face of rising interest rates and bond yields, consumer spending remained strong. This suggests that the U.S. economy has the capacity to endure higher rates over an extended period, which bodes well for the Dollar.

The expectation of "higher for longer" interest rates has been a key factor behind the recent strength of the U.S. Dollar. Currency markets believe that the U.S. economy can sustain its growth and resilience, especially when compared to other regions such as Europe, which is currently grappling with an economic slowdown.

The robustness of the U.S. economy is no secret to currency markets. However, it remains a challenging task to bet against the Dollar's ongoing appreciation. Unless a significant change occurs in the economic landscape, the U.S. economy is poised to maintain its strength, ensuring the Dollar's trajectory remains upward.

Following the release of the GDP figures, the Pound-Dollar exchange rate was at 1.2117, and the Euro-Dollar conversion rate stood at 1.0550. These exchange rates underscore the Dollar's strong position in the currency market, driven by impressive GDP growth and expectations of enduring high-interest rates.

On a technical note, the EURUSD pair has exhibited a historical descending channel pattern before transitioning into a sideways trading range. Significantly, the level at 1.061 acted as a formidable resistance point. Despite numerous attempts, the price struggled to breach this level to the upside, resulting in a noteworthy swing high that, in hindsight, proved to be a false breakout from the resistance.

Furthermore, it's essential to highlight that the price has consistently remained within a downtrend channel and is positioned below the 200-period moving average (MA200). Given these technical indicators, it's reasonable to anticipate an impending decline. The price may potentially retest the aforementioned resistance level before experiencing a downward movement.

If the price successfully breaks below the support at 1.052, this level becomes the initial target for a potential price decline, further reinforcing the Dollar's robust position in the market.

ENTRY PRICE : 1.0520

STOP LOSS : 1.0600

TAKE  PROFIT : 1.0300

During the Asian session on Friday (October 27), WTI crude oil fluctuated in a narrow range and is currently trading around 83.6 dollars per barrel. Oil prices continued to fluctuate downward yesterday, mainly because the Palestinian-Israeli conflict has not yet affected the major oil-producing areas, coupled with the increase in inventory. Asian oil prices showed signs of stabilization, but US crude oil fell to as low as 82.4 as a series of strong data supported the dollar during European and American sessions, and US bond yields also rebounded sharply again. Our recommendations on trading yesterday were generally profitable. Although the stop-loss order of our trade was triggered and $0.5 was lost, we earned $1 in the second trade. When we make a strategy in trading, we need to execute it resolutely. We will not lose much as we set stop-loss orders. As for how much we can gain, it depends on the market! We need to always be grateful.  

Geographical: The Times of Israel quoted the Israeli military news, that Daniel Hegeri, IDF spokesman, said that the Israeli army will continue to carry out limited ground attacks on the Gaza Strip after infantry units and tanks crossed the border fence on the evening of October 25, local time, and launched attacks on some military targets, infrastructure and anti-tank missile launch stations of the Palestinian Islamic Resistance Movement (Hamas). As of 9 a.m. local time on the 26th, the current round of Palestinian-Israeli conflict has caused more than 6,954 deaths on the Palestinian side. Among them, more than 6,850 people were killed and more than 17,000 injured in the Gaza Strip. In the West Bank, 104 people were killed and more than 1,900 injured.  

Today, investors need to pay attention to the US Core PCE Price Index MoM for September.   

Oil prices fell sharply yesterday, failing to continue the rally in previous days, and the consistency of the market was weak. Yesterday, oil prices fluctuated in a narrow range of 84.5-85 in the Asian market, and there was a trend of stabilization. However, in the European and American markets, oil prices first fell rapidly to break through 84, and then accelerated downward under the bearish data at night, falling as low as 82.4, but failed to break below the previous day's low of 81.9. Oil prices then rebounded slightly, hovering above 83, and finally closed with a full bear candle. I think that bears want to drive the market lower but they are not strong enough to do that at the moment. In the current fundamentals, there is no bearish marginal change and the Middle East conflict situation is difficult to change in the short term. It may cool down but may also escalate one day. It's like the sword of Damocles hanging over the heads of bears. If the profit/loss ratio is low on a trade, stay away. Because if you only focus on the interest, you may lose your principal!  

It is recommended that investors mainly go long at low. If the oil price retraces largely to 83.2, you can go long with small positions. The stop loss is set at 82.7, the first target to take profit is 86.3, where you can reduce your positions and move the stop loss to break even, and the second is 88.3. If the oil price retraces again to 81.8, you can go long for the second time by setting the maximum loss to be $0.5. The target to take profit is also 86.3.

Trading Direction: Long

Entry Price: 83.200

Target Price: 86.300

Stop Loss: 82.700

Support: 82.700/80.600

Resistance: 86.300/88.300

During the Asian session on Friday (October 27), spot gold fluctuated in a narrow range and is currently trading around 1984. Yesterday, the market was the same old story as the day before, with gold prices rising and then falling back down in European and U.S. sessions. The price surged as high as 1994 in the Asian session. After the release of the better-than-expected U.S. data, however, strong hands once again sold the asset and sent it quickly back to the 1971 level. Following the wash trading, gold prices picked up slowly and came back to the 1983-1988 range where there was massive resistance. We also stressed yesterday that, don't chase the market but go short at key points as shorting has a higher win rate and a better profit/loss ratio. Aggressive investors who did short selling at previous highs could make $20. Compared to the day before, yesterday saw higher highs and higher lows, so the short-term outlook is bullish. But it's difficult for the price to break through the important resistance area at previous highs. This means we have less chance to trade on the last trading day of this week. We still advise investors to sell high if the price rises. If you have made a good profit in the past few days, you can have a rest today as there is no need to force yourself to trade in the absence of a good opportunity. 

Data: According to initial estimates released by the US Department of Commerce, the seasonally adjusted annual rate of real gross domestic product (GDP) in the third quarter was 4.9%, beating market expectations and being the fastest pace in nearly two years. The preliminary annualized personal consumption expenditures (PCE) price index in the third quarter increased by 2.9% QoQ and 3.4% YoY. The preliminary annualized core PCE price index, which excludes food and energy, rose 2.4% QoQ, the lowest since the first quarter of 2021, and increased by 3.9% YoY. The preliminary real personal consumption expenditure in the third quarter rose 4% QoQ, the highest since the second quarter of 2021. US durable goods orders rose 4.7% MoM in September, higher than expected, which is also the fastest pace in more than three years.  

The data that investors need to pay attention to today is the monthly rate of the US core PCE price index for September.   

The movements of gold prices yesterday were very similar to Wednesday's, with higher highs and higher lows, and yesterday's highest point was around 1994. Faced with massive resistance and bearish data, gold prices quickly retraced to 1971 and then fluctuated in European and US sessions. The market, however, was still bullish and finally closed with a small bull candle with long upper and lower shadows, the 2nd consecutive bull candle. At present, gold prices are still blocked in the 1983-1988 area and can not effectively broken through it. The double top resistance in the range of 1997-2000 around the previous high also can not be underestimated. As all moving averages are running upward, the bullish trend in gold prices remains. However, larger headwinds seem to have emerged. One is the MACD in the overbought zone, which means the momentum of the bulls is constantly decreasing. The resistance increases for every upward step. As the slope of the current rise is too steep, it is easy to fall back! If there is a large correction to ease the bulls' risk and smooth out the indicator, the market may rise more healthily. In the short term, we still maintain the view that long positions can only be taken after a deep correction. Currently, the profit/loss ratio has been skewed towards the bears. Traders should continue to go short at key points this week. The harvest must be very satisfactory. The key is to act! During the day, we should apply a Buddhist mindset in trading, that is, trading when the opportunity comes, and relaxing if there is none.

Traders can mainly go short at high during the day. If the price rises to around 1997, you can still go short with small positions in the short term. The stop loss is 2002. The first target to take profit is 1977, where you can reduce your positions and move the stop loss to break even, and the second target is 1963. If the gold price rallies again to 2008, you can take a short position again by setting the maximum loss to be $5. The target to take profit is also 1977.

Trading Direction: Short

Entry Price: 1997

Target Price: 1977

Stop Loss: 2002

Support: 1977.000/1963.000

Resistance: 1997.000/2008.000

Thanks to a surge in consumer spending, the US economy accelerated to a near two-year high in the third quarter, once again ignoring the persistent warnings of an economic downturn from economists since 2022.

Forecasts released by the US Bureau of Economic Analysis on Thursday indicated a seasonally adjusted GDP rate of 4.9% for the third quarter of the US, the fastest pace since the fourth quarter of 2021. While this robust economic growth is unlikely to be sustained, it demonstrates the resilience of the economy.

The primary engine of growth for the economy, personal consumption expenditure, increased by 4%, the highest level since 2021. Meanwhile, core inflation indicators slowed to the lowest level since 2020. Despite rapid increases in prices and borrowing costs, the US economy has continued to maintain stability, repeatedly exceeding the expectations of forecasters and alleviating concerns of a recession. The primary driving factor behind this resilience is the ongoing strength of the labor market, which continues to fuel household demand.

However, growth in the fourth quarter of the US may slow down due to the United Auto Workers (UAW) union strike and the millions of Americans resuming student loan payments. Most economists have revised their forecasts, believing that the Fed can engineer a "soft landing" for the economy. Financial markets are anticipating that the Fed will maintain interest rates in November.

In other economic news, the European Central Bank's (ECB) rate decision was announced earlier, keeping rates unchanged. The main refinancing rate, marginal lending rate, and deposit rate remained at 4.50%, 4.75%, and 4.00%, respectively. The ECB stated that "the key interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal." Future decisions will ensure that policy rates are set at a sufficiently tight level "as long as necessary."

During the post-meeting press conference, ECB President Christine Lagarde noted that growth risks "lean to the downside" and geopolitical tensions could shake business and household confidence.

On the other hand, if the labor market continues to exhibit resilience and real incomes rise, economic growth could be higher. Global economic growth might be "stronger than expected."

Lagarde also pointed out that factors such as rising energy and food prices could pose upside risks to inflation. She emphasized the role geopolitical tensions could play in driving short-term energy price increases, while also drawing attention to the impact of climate crises, which could lead to unexpected food price increases.

However, she also acknowledged that inflation pressures may diminish, particularly in the case of declining demand, which could be due to more noticeable effects of monetary policy or external economic challenges exacerbated by geopolitical risks, among other factors.

The EURUSD pair faced significant pressure after touching the 50-day SMA, nearly erasing all the gains made in the week prior to the ECB policy announcement.

From a technical perspective, the EURUSD encountered a short-term bullish channel in the chart after being rejected by the 55-day SMA, and there's potential for a rebound from 1.0522 to 1.0640. The downside pressure is currently being defended around 1.0540. The upper limit of the previous bearish channel may also halt selling pressure around 1.0508.

Today's key focus is the minor support at 1.0522. A firm break below this level should reinforce the bearish scenario. Further breaking below 1.0448 would resume the overall decline from 1.1274, with the next target being the 61.8% Fibonacci retracement level of 0.9534 to 1.1274 at 1.0199.

Overall, the recent significant correction in the EURUSD has yet to confirm a bearish bias. For this, the asset may need to regroup bullish hopes within the channel. In terms of trading strategy, it is recommended to buy low and sell high.

Trading Direction: Short

Entry Price: 1.0590

Target Price: 1.0382

Stop Loss: 1.0700

Valid Until: 2023-11-09 23:55:00

Support: 1.0522, 1.0495, 1.0472

Resistance: 1.0639, 1.0694, 1.0718

The GBPJPY currently displays an overall neutral bias on the chart, indicating the potential for a range-bound price action, but with upward turning momentum towards the first resistance level at 182.44.

The first support level at 181.27 is considered strong due to its multi-wave low support characteristics. The second support level at 180.39 is also significant as it represents a swing-low support level.

On the resistance side, the first resistance level at 182.12 is worth noting, as it has overlapping resistance characteristics and the presence of the 23.60% Fibonacci retracement, making it an important resistance level. The second resistance level at 182.84 is marked by retracement resistance and the 61.80% Fibonacci retracement, making it another important resistance level.

GBPJPY's intraday bias remains neutral. The intraday low at 181.00, a key psychological level, is holding well, and further consolidation would favor an upward move. The preferred scenario remains that a correction from 186.75 has been completed at 178.02. A breakout of 183.79 would restore the uptrend initiated from 178.02 and retest the high at 186.75. However, a break below 181.00 would weaken this view and shift the bias back to the downside towards 178.02.

From a larger perspective, the decline from 186.75 is viewed as a correction only. As long as the support at 176.29 holds, the broader uptrend initiated from the level of 123.94 should still be in progress. A breakout of 186.75 will test the 2015 high at 195.86. Nonetheless, remaining below the range of 186.75-176.29 will confirm a medium-term top and bring about a longer and deeper correction or consolidation.

Overall, the short-term trend is viewed as range-bound or upward. In terms of trading, buying the dips is the recommended strategy.

Trading Direction: Long

Entry Price: 181.75

Target Price: 185.00

Stop Loss: 180.20

Valid Until: 2023-11-09 23:55:00

Support: 182.07, 181.15, 180.28

Resistance: 183.02, 183.98, 184.39

The crude oil market seems inevitably poised for a rebound and potentially an upswing this week. The $90.00 level is a critical psychological point and could even dip below $80.00.

However, the bulls find support from the 89-day SMA. As long as prices remain above this level, there will be plenty of buyers eager to capitalize on what they perceive as a "cheap" level. Breaking below this focus will shift to the 100-day SMA, which may provide a robust safety net. Currently, breaking below this range seems less likely.

The Brent market has also shown resilience, attracting buyers looking for value within a lower price range. In the long term, the market is still poised to target the $95.00 level, although achieving this milestone may take some time.

As things stand, shorting crude oil prices appears unwise, but it's worth noting that this doesn't guarantee an immediate price increase. Anticipated ongoing volatility may present numerous opportunities for investors in the short term. Nonetheless, from a broader perspective, the current trend is undeniably upward.

In this context, global economic growth remains a key factor to monitor. Additionally, the geopolitical tensions in the Middle East also have a significant impact on the crude oil market. These multifaceted dynamics highlight the complexity of the commodity market.

Ultimately, the recent dip in crude oil prices has not deterred buyers eager to capitalize on perceived value. Supply concerns, geopolitical tensions, and technical support levels all suggest that oil prices could rise. Short-term volatility can be expected, while medium-term trading may view the market with a bullish bias. As the market continues to evolve, attention to global economic growth and geopolitical developments remains crucial.

On another note, due to the unexpected 1.4 million-barrel increase in EIA inventory reports, as opposed to the anticipated 500,000-barrel decrease, crude oil prices are now under downward pressure. This indicates that demand may slow down or supply may increase during the reporting week.

The upcoming release of US third-quarter GDP data today could influence overall market sentiment, thereby determining the direction for commodities and other risk assets. Strong data may reinforce expectations of another Fed rate hike before the end of the year, which could potentially bring some downside for high-yield assets.

WTI crude oil recently fell below the key support level of $86.00 and dropped below $82.00, after which it staged a strong rally. The price retraced after testing the previous resistance zone around $85.37, in line with the expected trend structure. The market has now returned to the buying zone within the $83.50 range.

Regarding moving averages, the 100 SMA being below the 200 SMA indicates that the path of least resistance is currently downward, making further selling more likely to gain traction. The price hovering around $83.50 may already serve as the upper limit for the recent decline.

The stochastic oscillator pointing downwards suggests that the bears are taking control while the buyers are taking a breather. There is still enough room for the oscillators before indicating oversold conditions or seller exhaustion. However, the RSI seems to have room for an upward move before reflecting overbought conditions. Therefore, retracements may continue until the oscillators show buyer exhaustion.

On the bullish side, the Fibonacci retracement tool indicates that the bullish rally is interested in the area around the 50% level and coincides with the dynamic inflection point of the 100 SMA, at $86.86, close to the dynamic resistance of the 200 SMA. A higher rebound will test the endpoint of this rally, close to the $88.50 level. In terms of trading, buying the dips is the recommended strategy.

Trading Direction: Long

Entry Price: 83.50

Target Price: 88.50

Stop Loss: 80.50

Valid Until: 2023-11-09 23:55:00

Support: 82.50, 81.43, 80.64

Resistance: 84.41, 85.99, 87.88