The Week Ahead 6th – 10th November: awaiting Chinese inflation data

<p>Welcome to Key To Markets preview of the Week Ahead</p>
<h2>Currency Pair Performance</h2>
<p>5-day performance as of <strong>November 2, 2023. 10:00 GMT</strong></p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-26743 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1currencypair.png" alt="" width="904" height="408" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1currencypair.png 904w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1currencypair-300×135.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1currencypair-768×347.png 768w" sizes="(max-width: 904px) 100vw, 904px" /></p>
<p>Source: finviz.com</p>
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<h2>10 Big Stories Last Week</h2>
<p>In case you missed it…</p>
<p><strong>Fed hinted that it could be done with hikes.</strong> As expected, the central bank left rates on unchanged at 5.25%-5.5% and signaled that high yields have reduced the impetus to hike rates again.</p>
<p><strong>Shell posts $6.2 billion profit.</strong> The oil major posted adjusted profits in line with forecasts and announced a $3.5 billion share buyback.</p>
<p><strong>USD/JPY neared a yearly high</strong>. The pair rose to within touching distance of 151.94, last year’s high when the Japanese authorities intervened after the BoJ was more dovish than expected.</p>
<p><strong>Advanced Micro Devices jumped 9% after earnings.</strong> The chip maker reported forecast-beating Q3 earnings and revenue. AMD also provided an upbeat outlook for its data centre GPU business.</p>
<p><strong>Airbnb beat revenue forecasts.</strong> The firm recorded revenue of $3.4 billion against $3.37 billion, but the share price dropped after weaker-than-expected guidance for the coming quarter.</p>
<p><strong>Pinterest jumped 19% post earnings.</strong> The image-sharing platform recorded its 3rd best day ever after posting earnings and revenue ahead of forecasts and included strong user engagement data.</p>
<p><strong>BoE left rates unchanged.</strong> As expected, the central bank left interest rates unchanged for a second straight month at 5.25%. Policymakers indicated that its hiking cycle could be over.</p>
<p><strong>The UK hosted a pivotal AI safety summit.</strong> Elon Musk as well as US Vice President Kamala Harris and EC President Ursula von der Leyen as well as the CEOs of several top AI firms</p>
<p><strong>BP missed profit forecasts.</strong> The oil major posted a profit of $3.3 billion, missing forecasts of $4 billion due to weak gas trading. BP announced a $1.5 billion buyback.</p>
<p><strong>China manufacturing activity contracted.</strong> The manufacturing PMI fell below 50, and the non-manufacturing PMI showed growth slowed considerably, raising concerns that more stimulus may be needed to boost the economy.</p>
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<h2>Chart of the Week</h2>
<p><img decoding="async" class="alignnone wp-image-26746 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1chartoftheweek.png" alt="" width="840" height="788" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1chartoftheweek.png 840w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1chartoftheweek-300×281.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1chartoftheweek-768×720.png 768w" sizes="(max-width: 840px) 100vw, 840px" /></p>
<p>Source: TheDailyShot</p>
<p>Three events this week brought about a shift in the Treasury market on Wednesday.</p>
<p>Firstly, the US treasury slowed the increase in longer-term bond sales. Secondly, the ADP payroll data showed that the US jobs market was softening, with payrolls rising 113k vs 150k forecast.<br />
Thirdly, the market interpreted Federal Reserve Chair Jerome Powell’s press conference as more dovish despite the central bank leaving the door open for further hikes. The prevailing view is that the Fed is likely done with hiking rates.</p>
<p>Falling yields helped put stocks on track for a positive start to November after three months of losses.</p>
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<h2>5 Things to Watch This Week</h2>
<p><strong>1. RBA rate decision</strong><br />
The Reserve Bank of Australia will announce its interest rate decision on Tuesday, November 7, and is now expected to raise rates again after inflation unexpectedly increased. The market is now pricing in a 70% probability of a 25 basis point rate hike, which would take the main lending rate to a 12-year high of 4.35%. The meeting comes after the IMF urged Australia to tighten monetary policy further and step up efforts to rein in inflation, which remains well above the bank’s 2 to 3% target.</p>
<p><strong>2. Walt Disney earnings</strong><br />
Walt Disney will report Q4 earnings on Wednesday, November 8, after the market close. Expectations are for EPS of $0.72 versus $1.03 in Q3, on revenue of $21.42 billion versus $22.33 billion in Q3. The market expects to see Disney add 3.1 million subscribers, which, combined with higher prices, could help boost the streaming division. Q3 saw the parks experiences and products division post a 13% rise in revenues to $8.3 billion due to strength in its international parks. Investors will be keen to see whether this trend continues into the first quarter in light of the cost of living pressures.</p>
<p><strong>3. China Inflation</strong><br />
Chinese inflation data is due to be released on Thursday, November 9. The CPPI reading comes after inflation stalled at 0% YoY in September while producer prices fell -2.5%- indicating that China could relapse into deflation. Chinese PMI data last week was disappointing, with manufacturing activity contracting and non-manufacturing activity growth slowing significantly. The data suggests that support measures from Chinese authorities are insufficient, and more help is needed to boost the economy.</p>
<p><strong>4. Uber earnings</strong><br />
Uber Technologies is expected to report earnings for the third quarter on Tuesday, November 7. The rideshare operator is set to swing into profit with EPS of $0.13, up from a loss of $0.61 in the same period a year earlier. Revenue is forecast to rise 13.5% annually to $9.47 billion, up from $8.34 billion. Gross bookings are expected to come between 34 to 35 billion, up from 29.1 billion in Q3 last year. The share price trades up 55% year to date.</p>
<p><strong>5. Eurozone retail sales</strong><br />
Eurozone retail sales will be released on Wednesday, November 8, and could shed more clues over how consumers are holding up amid record high interest rates but as inflation cools. Recent data from the eurozone has raised concerns that the economy is heading for a recession in the second half of the year. Weak sales data could fuel those concerns, raising bets that the ECB could cut rates sooner.</p>
<h2>Economic Calendar Highlights</h2>
<p><img decoding="async" class="alignnone wp-image-26749 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1economiccalendar.-png.png" alt="" width="904" height="426" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1economiccalendar.-png.png 904w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1economiccalendar.-png-300×141.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1economiccalendar.-png-768×362.png 768w" sizes="(max-width: 904px) 100vw, 904px" /></p>
<p>Source: FXStreet.com</p>
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<h2>Technical Analysis:</h2>
<p>TA of the major asset classes (Forex – Commodities – Indices…).</p>
<p><strong>EUR/USD (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-26752 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1eurusd.png" alt="" width="1916" height="897" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1eurusd.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1eurusd-300×140.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1eurusd-1024×479.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1eurusd-768×360.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1eurusd-1536×719.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p>EUR/USD is in the correction of a downtrend, making higher highs and lows below the 50 SMA. RSI is neutral. Price has made to fakeouts above the 50 SMA with selling some in below 1.07 while buying returns before 1.05. A bearish flag is still in play, implying a possible break below the lows at 1.043. A break and close above the 50 SMA is needed to confirm a weekly hammer pattern off long-term support.</p>
<p><strong>GBP/USD (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-26755 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1gbpusd.png" alt="" width="1916" height="897" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1gbpusd.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1gbpusd-300×140.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1gbpusd-1024×479.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1gbpusd-768×360.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1gbpusd-1536×719.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p>GBP/USD is in a correction within a downtrend, forming equal lows and highs below the 50 SMA. RSI is neutral. Price is in a 250-pip range between 1.205 and 1.23. The hammer on the weekly candle chart is bullish, but the trend remains down, implying the current sideways action resolves lower.</p>
<p><strong>USD/JPY (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-26758 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1usdjpy.png" alt="" width="1916" height="897" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1usdjpy.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1usdjpy-300×140.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1usdjpy-1024×479.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1usdjpy-768×360.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1usdjpy-1536×719.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p>USD/JPY is in an uptrend, making higher highs and higher lows above the 50 SMA. RSI has come just off overbought. Price broke above 150.0 with a big bullish engulfing candlestick but is yet to follow through after retracing from the 2022 (multi-year) peak at 151.8. A hanging man pattern on the weekly chart at a round number is bearish.</p>
<p><strong>Gold (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-26761 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xauusd.png" alt="" width="1916" height="897" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xauusd.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xauusd-300×140.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xauusd-1024×479.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xauusd-768×360.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xauusd-1536×719.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p>XAU/USD is in an uptrend, forming higher highs and lows above the 50 SMA. RSI is overbought above 65. Price has broken above the psychological 2000 level, where it is consolidating before another potential move upwards. Else a deeper correction to 1900 is likely.</p>
<p><strong>Brent Oil (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-26764 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xbrent.png" alt="" width="1916" height="897" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xbrent.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xbrent-300×140.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xbrent-1024×479.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xbrent-768×360.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xbrent-1536×719.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p>XBRENT is in a sideways trend, making mixed lows and highs below the 50 SMA. RSI is neutral but just dipped under 50. The failure to take out the double top at 95 followed by the drop under the 50 SMA is near term bearish with support for the long term uptrend at 83. A uptrend line connecting the lows since July hints at a long term Head and Shoulders reversal if it is broken.</p>
<p><strong>US500 (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-26767 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xus500.png" alt="" width="1916" height="897" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xus500.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xus500-300×140.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xus500-1024×479.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xus500-768×360.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/1xus500-1536×719.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></p>
<p>XUS500 is in a downtrend, making lower highs and lows under the 50 SMA. RSI is bearish but not oversold. Price is rebounding off support found at 4100. A falling wedge pattern is bullish and supports the idea of a correction of the long term uptrend. A break back over the 50 SMA in line with the major uptrend seems most likely.</p>
<p>Thank you very much for reading – and have a great week trading!</p>
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<p>The post <a href="https://www.keytomarkets.com/blog/analysis/the-week-ahead-6th-10th-november-26741/">The Week Ahead 6th – 10th November: awaiting Chinese inflation data</a> appeared first on <a href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>