Yesterday, the Reserve Bank of New Zealand (RBNZ) reduced its Official Cash Rate (OCR) by 50 basis points to 4.75% from 5.25%. This move led to a one-cent decline in the New Zealand dollar (NZD), which was further affected by the broader risk-off sentiment in currency markets. Despite this, both U.S. and European stock markets enjoyed strong performances. The RBNZ’s decision comes in response to the highest unemployment rate in three years, core inflation staying within its target range, and continuing weakness in high-frequency economic indicators.

Today’s Market Expectations

Today the calendar is light until the U.S. session, when the inflation report will be released. The monthly CPI figure is forecasted at 0.1%, down from the previous 0.2%, while the year-over-year rate is expected to come in at 2.3%, lower than the prior 2.5%. Core CPI, on the other hand, is anticipated to remain steady year-over-year at 3.2%, with the month-over-month reading seen at 0.2%, down from 0.3%. The upcoming U.S. CPI data will be pivotal for the USD. In light of the recent strong Non-Farm Payrolls report, even a modest miss on CPI might not be enough to reinvigorate expectations for a 50-basis-point cut in November.

Weekly jobless claims will also be closely watched as an indicator of labor market health. While initial jobless claims remain within the 200,000–260,000 range, continuing claims have shown significant improvement, with recent reports dropping to 1.826 million. This week’s initial claims are expected to rise slightly to 230,000 from last week’s 225,000, while no consensus has yet been reached on continuing claims.

Yesterday forex moves were small again, with volatility being low, including Gold and crude Oil which were seeing some huge volatility early this week. The USD continued to grind higher and the moves were quite predictable. We opened five trading signals, ending the day with four closed forex trades, three of which ended as winning forex signals.

Gold Consolidates Below the 200 SMA After the Decline

Since late September, gold has been consolidating within a triangular pattern marked by ascending lows and descending highs. However, today’s decline saw gold prices move closer to $2,600, breaking below the triangle’s lower boundary established on September 20. Favorable U.S. jobless data has reduced the likelihood of another 50-basis-point rate cut by the Federal Reserve. Additionally, discussions about a potential Middle East ceasefire have negatively impacted gold and silver prices. Yesterday, gold was unable to breach the 200 SMA (Purple), prompting two sell signals as the commodity’s bearish momentum persisted.

XAU/USD – H1 Chart

The 20 SMA Keeping USD/CAD Supported

Since early October, the USDCAD pair has been on an upward trajectory, bolstered by the release of the FOMC meeting minutes, which helped the pair cross the 1.37 mark. The H1 chart reflects strong buying pressure, with the uptrend clearly defined, and the 20 SMA serving as consistent support. This persistent bullish movement highlights the underlying strength of the USD, driven by solid U.S. economic data and cautious optimism around Fed policy.

USD/CAD – H1 Chart

Cryptocurrency Update

Bitcoin Bounces Off $60,000 

BTC/USD – Daily chart

Ethereum Remains Subdued by MAs

Similarly, Ethereum has faced significant downward pressure since March. By June, ETH/USD approached $2,200 as selling intensified, though it managed a modest recovery above the 50-day SMA. Ethereum is now contending with resistance at the 50-week SMA, with strong support from the 100-week SMA holding above the $2,500 level. This ongoing dynamic suggests a possible range-bound movement as both assets struggle against broader economic uncertainties.

ETH/USD – Weekly chart