Original article authored by Fawad Razaqzada and published on InsuranceNewsNet
Title: Forex Market Analysis – USD/CAD, EUR/GBP, Nasdaq 100, Gold, Natural Gas, EUR/USD, Crude Oil, USD/JPY (November 2, 2023)
The global currency and commodities markets experienced notable shifts on November 2, 2023, driven by a confluence of technical, fundamental, and macroeconomic influences. Among the major movers were the US dollar and its pairings with the Canadian dollar (USD/CAD), the euro (EUR), and Japanese yen (JPY). Meanwhile, cross-currency pair EUR/GBP remained relatively range-bound. Additionally, commodities such as crude oil, natural gas, and gold presented fresh trading setups driven by shifting sentiment and data. Below is a comprehensive breakdown of the key movements, with a focus on technical barriers, risk sentiment, and news releases that could shape future price action.
USD/CAD – Breaking Support
The dollar–Canadian dollar pair displayed signs of weakness as it broke below a critical support level.
Key observations:
– The pair dipped below the 1.3800 horizontal support area, which had previously provided a strong floor over the past few sessions. The break below this level could open the door for a deeper retracement.
– This move coincided with a modest bounce in crude oil prices, often bullish for the CAD due to Canada’s oil exports.
– Technically, the breakdown could push USD/CAD towards the next key support level at 1.3650.
– Momentum indicators such as RSI and MACD are turning south, signaling the potential for further downside.
– The 21-day exponential moving average (EMA) around 1.3740 may act as near-term resistance if attempted recovery fails.
Fundamental drivers:
– Lower U.S. treasury yields weighed on the dollar, eroding support.
– Canadian labor market data due later in the week could provide further direction, especially if employment shows resilience.
EUR/GBP – Range-Bound Activity
The EUR/GBP cross maintained a consolidative profile, with no significant breakout on either side.
Price action and outlook:
– The pair hovered within a narrow sideways range between 0.8640 and 0.8700 over recent trading sessions.
– Traders appear hesitant to commit ahead of key Eurozone inflation data and Bank of England policy decisions.
– With both the euro and British pound subject to similar economic headwinds, such as rising yields and recession fears, a lack of strong divergence has suppressed volatility.
– Future direction may be dictated by the tone of central bank commentary and inflation outlooks.
Gold – Cautiously Bullish After Pullback
Gold prices displayed a measured pullback from recent highs, with downside support levels holding steady.
Observations:
– The metal eased off the $2000 level after failing to sustain a breakout.
– Geopolitical tensions and softening yields helped gold initially last week, but profit-taking led to a retracement.
– Key support held firm near $1960, marked by the 21-day EMA and a former resistance-turned-support ceiling.
– Should the market regain composure, gold bulls will be eyeing a retest of the $1985–$2000 zone.
Factors influencing gold movements:
– Falling U.S. treasury yields support non-yielding assets like gold.
– Investors continue to digest comments from Federal Reserve Chair Jerome Powell, who left the door open for future hikes but stressed data dependency.
– Geopolitical risks from the Middle East remain a wild card.
Traders should note:
– Intraday weakness may persist until clearer signals emerge from USD performance and equity markets.
– A close below $1950 could weaken the bullish case in the short term.
Crude Oil – Continues to Recover, but Faces Resistance
Crude oil prices attempted a modest rebound amid oversold conditions.
Key technical updates:
– After falling sharply over the past two weeks,
Read more on EUR/USD trading.