Fundamental & Technical Analysis by Coach Mark RoboAcademy during 28 October – 1 November 2024

Hello everyone, welcome to the weekly analysis of currency pairs EUR/USD, GBP/USD, and XAU/USD for the last week of October and the first week of November, from 28 October – 1 November 2024.

EUR/USD, “Euro vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting EUR/USD This Week:

European Economic Data:

• Eurozone Consumer Confidence Index (October 28): If the index exceeds expectations, it could support the euro’s appreciation, as consumer spending plays a significant role in Eurozone economic growth. However, if consumer confidence declines, the euro may weaken against the U.S. dollar.
• German Consumer Price Index (German CPI) (October 29): This indicator reflects Germany’s inflation rate, the largest economy in the Eurozone. If inflation is higher than expected, the European Central Bank (ECB) may face pressure to tighten monetary policy, potentially strengthening the euro. Conversely, a lower-than-expected inflation rate could weaken the euro.
• Eurozone Industrial Production (October 30): This figure indicates the strength of the Eurozone’s economy. An increase in industrial production would be a positive sign for the euro, while a decline might weaken it due to economic growth concerns.
• ECB Meeting (October 31): This meeting is a key factor for the euro’s outlook. If the ECB signals policy adjustments, such as a rate hike to control inflation or signs of economic recovery, the euro is likely to strengthen. However, if the ECB expresses economic concerns or signals further monetary easing, the euro could weaken.

U.S. Economic Data:

• US Initial Jobless Claims (October 31): This figure impacts the U.S. dollar. If jobless claims decrease, indicating a strong U.S. labor market, it may support dollar appreciation and cause EUR/USD to weaken.
• US Manufacturing PMI (November 1): This index reflects economic activity in the manufacturing sector. If it exceeds expectations, it could strengthen the dollar and pressure EUR/USD to decline. Conversely, if it falls short of expectations, the euro may appreciate.
• US Core PCE Price Index (November 1): A key inflation measure for the U.S., if it rises above the Federal Reserve’s target, it may strengthen the dollar due to the possibility of further Fed rate hikes, which would weigh on EUR/USD.

Technical Analysis

The price is continuing to adjust downward. It is recommended to Sell in anticipation of a test of the support zone at 1.07600-1.06800. However, one should be cautious of a potential bounce from this support level. It is advisable to wait for a breakout below before following through with a Sell position for added confidence.

GBP/USD, “Great Britain Pound vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting GBP/USD This Week:

U.K. Economic Data:

• UK Nationwide HPI (30 October): This index reflects the movement of house prices in the UK. If house prices increase, it will be a positive signal for the economy and support the strengthening of the pound against the US dollar. However, if the index comes in weak, the pound may weaken.
• Bank of England Meeting (31 October): This meeting is a key focus for investors. If the central bank signals an interest rate hike to curb inflationary pressures, the pound may strengthen. Conversely, if concerns about the economy are expressed, the pound may weaken.
• UK Manufacturing PMI (1 November): If the manufacturing PMI comes in higher than expected, it will signal positive news for the UK economy and help support the pound’s strength against the US dollar. However, if the index comes in weak, the pound may weaken.

U.S. Economic Data:

• US Initial Jobless Claims (31 October): This figure reflects the state of the labor market in the United States. If the results are better than expected, the dollar may strengthen, which could lead to a decline in the GBP/USD pair.
• US Manufacturing PMI (1 November): If the PMI figure for the US comes in higher than anticipated, it will likely strengthen the dollar and may cause the GBP/USD to weaken. Conversely, if the figures are weak, the pound may gain support.
• US Core PCE Price Index (1 November): This is a key indicator used by the Federal Reserve to assess inflation. If inflation figures are high, the Fed may decide to raise interest rates, which would strengthen the dollar and put pressure on the GBP/USD.

European Economic Data Affecting GBP/USD:

• Eurozone Consumer Confidence (28 October): This data has an indirect impact on the British pound (GBP) as strong confidence in the Eurozone will promote stable trading in European markets. If the figures exceed expectations, the euro may strengthen, potentially providing positive support for the pound from increased regional confidence.
• German Consumer Price Index (German CPI) (29 October): This index measures inflation rates in Germany, the largest economy in Europe, which affects the euro and may also impact GBP/USD. If inflation rates are higher than anticipated, the euro could appreciate against the dollar, slightly boosting the pound.
• Eurozone Industrial Production (30 October): Although this data is not directly related to the UK, the growth of the Eurozone economy impacts trade with England. A slowdown in the Eurozone’s industrial sector could exert downward pressure on the pound due to reduced trade activity.
• ECB Meeting (31 October): If the European Central Bank signals a tightening of monetary policy, the euro may strengthen against the dollar, potentially putting pressure on GBP/USD and causing the pound to weaken in the short term.

Technical Analysis

The price is gradually declining, and one should look for opportunities to Sell. However, caution is advised regarding several support levels that may cause the price to pause and rebound. The target for selling could be set at testing the level of 1.26600.

However, be wary of potential rebounds from these support levels. It is advisable not to hold short positions for too long, and to close profits appropriately while avoiding excessive drawdown on Stop Loss levels.

XAU/USD, “Gold vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting XAU/USD This Week:

Economic Data Related to Gold:

• Eurozone Consumer Confidence Index (28 October): An increase in consumer confidence may promote economic growth in the Eurozone, leading investors to have more confidence in riskier assets and reducing demand for gold (a safe-haven asset). Conversely, if confidence declines, gold prices may be inclined to strengthen.
• German Consumer Price Index (German CPI) (29 October): This data impacts inflation in the Eurozone. If inflation is higher than expected, investors may turn to gold more as it acts as an inflation hedge. However, if inflation remains low, interest in gold may decrease.
• Eurozone Industrial Production (30 October): This figure reflects economic growth in the region. If industrial production is strong, investors are likely to focus on investing in riskier assets like stocks and reduce demand for gold, which could lead to a decline in gold prices.
• UK Nationwide HPI: If house prices in the UK increase, it may boost confidence in the economy and reduce demand for gold as a safe-haven asset.
• ECB Meeting (31 October): If the ECB signals an interest rate hike to control inflation, it will strengthen the euro and put pressure on gold prices to decline, as investors will shift to higher-yielding assets. Conversely, if the ECB signals a relaxation of monetary policy, gold may receive support.
• US Initial Jobless Claims (31 October): If the US labor market is strong, the US dollar may strengthen, which would pressure gold prices to decrease. However, if unemployment numbers rise, gold prices may receive support.
• US Manufacturing PMI (1 November): This figure reflects the economic condition in the manufacturing sector. If the US PMI is positive, investors may reduce their interest in gold and turn to riskier assets. Conversely, if the PMI is weak, demand for gold may increase as it is considered a safe-haven asset.
• US Core PCE Price Index (1 November): This inflation indicator is one of the key factors the Federal Reserve considers in its decisions. If inflation rises, gold may gain support from investors looking for ways to hedge against inflation. However, if inflation remains low, the dollar may strengthen, putting downward pressure on gold prices.

Technical Analysis

The price continues to soar to an all-time high (ATH). It is recommended to wait for an opportunity to buy during normal pullbacks, as there are good chances for profit during this period. However, one must be cautious of the possibility of a strong downward adjustment as well. The zone that may be tested is 2700, where one can wait to place large buy orders, as there are currently no clear signals indicating that the market will turn bearish.

Disclaimer: This article is solely an analysis from the coach at RoboAcademy and is not intended as investment advice in any way. Investing is risky. Investors should study the information before making investment decisions.