What you need to know on Thursday
- US Inflation Rate came out greater than analysts expected: 0.4% vs the forecast of 0.3%). US Core Inflation Rate met the expectations of 0.2%.
- The Fed published the detailed record of its latest meeting. As expected, it revealed that officials are ready to start tapering on November 2-3 (a gradual cut of asset purchases). Since the markets were expecting this and it wasn’t a surprise, the USD slumped allowing risk-on currencies and gold to rally up.
- The 10-year Treasuries yields, boosting demand for non-interest-bearing gold. The yellow metal may start actually a long uptrend if high inflation persists.
- Oil closed lower as traders assessed OPEC’s skepticism around the strength of crude demand even after prices hit the highest since 2014.
- The Australian unemployment rate came out better than expected: 4.6% vs the expected 4.8%. However, the employment change came out worse. AUD/USD dropped immediately after the release but then continued rising.
- JP Morgan announced upbeat third-quarter earnings, reporting profits of $11.7 billion. Today, we expect earnings reports from BAC, Wells Fargo, Morgan Stanley, and Citigroup.
Tech outlook
EUR/USD has escaped the descending channel breaking above the 50-period moving average (MA) at 1.1570. However, it stopped ahead of the strong resistance level of 1.1600. The jump above it will open the doors to the high of October 4 at 1.1635. Support levels are the 50-period MA at 1.1570 and yesterday’s low of 1.1545.
Gold has skyrocketed! It has approached the 100- and 200-day MAs at $1800. It may struggle to cross this strong resistance level, but if it manages to break it, the doors to the next round number of $1815 will be open. Support levels are the 50-day MA at $1775 and the low of October 11 at $1730.
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