Article by: ETO Markets
In October, Australia's unemployment rate was 3.7%, as anticipated, down from 3.6% in September. However, following the release of the US economic data on Wednesday, there was volatility in the AUD/USD pair during the prior session.
Following four hours of discussions, Chinese President Xi Jinping and US President Joe Biden agreed to normalize tense bilateral relations and resume certain military-to-military exchanges. By addressing and strengthening the two countries' complex relationship, this commitment may pave the path for future improvements in diplomatic and strategic collaboration.
We saw an unexpected shift in the US Producer Price Index in October, falling by 0.5% compared to a predicted increase of 0.1%. There was a decrease in the annual rate as well, from 2.2% to 1.3%. These numbers are consistent with the US Consumer Price Index data released on Tuesday, which showed weaker inflation.
The US Bureau of Labor Statistics data showed that US inflation had slowed down more than first thought. The US Dollar experienced a significant decrease in value as a result of this unanticipated slowdown.
The fact that US retail sales fell by 0.1% in October instead of the predicted 0.3% fall adds to the country's economic panorama. On Thursday, investors' attention is diverted to weekly Jobless Claims.
The UK inflation figures early on Wednesday caused the Pound Sterling to lose some of its appeal, and the pair lost some of its recent gains. The Consumer Price Index increased 4.6% annually in October, according to the UK's Office for National Statistics. This was a far smaller increase than the 6.7% increase seen in September. While the Producer Price Index - Input fell 2.6% during the same time, the Retail Price Index increased 6.1%, down from 8.9% in September.
After reaching above 80 on Tuesday, the 4-hour chart's Relative Strength Index fell to 70 early on Wednesday, indicating that the most recent decline was likely a component of a technical correction. In terms of support, the static level at … is the first level to appear on the downside, followed by the psychological level at … and the upper limit of the broken ascending regression channel at ...
On the other hand, prior reaching … and …, strong resistance for the pair is seen at …, where the Fibonacci 38.2% retracement is.
The Bank of Japan is the only significant central bank in the world to keep interest rates negative, and it hasn't showed any indications of stopping its decades-long, historically generous easing program. Furthermore, the BoJ should be able to postpone changing its enormous monetary easing posture given the depressing domestic GDP report that was announced on Wednesday, which revealed that the economy shrank for the first time in three quarters. Thus, the Japanese Yen may be devalued and losses on the USD/JPY pair may be limited.
A strong breakdown below the previously mentioned support levels will be interpreted by bearish traders as a new signal to sell and open the door for some significant downside. The USD/JPY pair may potentially continue its downward trajectory toward the … round number and the … intermediate support.
Conversely, any further advance is probably going to run into some resistance around the … level, which is ahead of the … region and the YTD peak, which was touched on Monday, around the … area. A little follow-through purchasing that pushes the price above … will be viewed by optimistic traders as a new catalyst.
