Solid Goold Trading

Monday’s Edition

With Nick Goold

Global stocks fell as investors worried about whether companies would make enough profit from their AI investments. This reversed gains earlier in the week following strong U.S. earnings. WTI crude oil stayed above $100 as fears of more attacks in the Middle East continued.

The Federal Reserve kept interest rates unchanged in a 10–2 vote, with two members supporting a quarter-point hike. Fed Chair Kevin Warsh gave little guidance on a possible December increase and announced fewer rate-setting meetings from 2027. U.S. GDP grew 3.4%, beating the 3.2% forecast. Long-term U.S. bond yields fell after the Fed announcement and Friday’s drop in technology stocks.

The ECB kept rates unchanged despite discussing an increase. Eurozone GDP grew 0.4% from the previous quarter, more than expected. Japan’s Tokyo core inflation was 2.6%, matching forecasts and staying above the BoJ’s 2% target. The BoJ held its policy rate at around 1.25%, while Governor Kazuo Ueda said it must watch for inflation rising too far above its target.

Markets This Week

U.S. Stocks

The Dow had held up well as technology stocks fell, but a sharp drop in the Nasdaq pulled it lower at the end of the week, breaking its recent uptrend. Investors are growing worried, but the longer-term uptrend may still be intact. Selling after the drop could be risky, as the Dow may trade sideways at lower levels this week. The U.S. midterm elections and jobs report could bring bigger moves. Resistance is at 53,000, 53,750, 54,000 and 54,500. Support is seen at 51,500, 50,000 and 49,000.

Japanese Stocks

Japanese stocks recovered earlier losses at the start of the week but ended lower as a sharp fall in U.S. technology stocks brought more selling. The Nikkei remains in a short-term downtrend, with the 10-day moving average pointing lower. Selling on rebounds and looking for a test of 60,000 could be the best approach in the short to medium term. Resistance is at 64,000, 65,000, 66,000, 67,000 and 68,000. Support is at 62,000, 60,500, 60,000, 59,000 and 58,000.

USD/JPY

USD/JPY recovered its recent losses and returned to 158 as the BoJ kept interest rates unchanged, as expected. Japan’s finance minister said the government was watching exchange rates and ready to act, making buyers cautious above 158. Selling returned late in the week as technology stocks fell. Range trading remains the preferred approach, with buyers and sellers fairly balanced, though further stock market losses could push the pair lower. Resistance is at 158.00, 158.50, 159.00 and 160.00 while support is at 156.00, 155.00, 153.00, 152.50 and 152.00.

Gold

Gold fell to a one-year low on Friday, breaking below $4,000 as expectations of a U.S. rate hike in December and fears of higher oil prices from the Iran conflict encouraged selling. The drop looks stretched in the short term, with no major change in the outlook and demand for physical gold still holding up. Prices could fall further as some traders are forced to close losing positions, but a recovery is possible this week once selling pressure eases. Resistance is at $4,000, $4,065, $4,100, $4,150, $4,220 and $4,250, while support is at $3,800, $3,700, $3,600.

Crude Oil

WTI crude oil buying remained strong as prices tested September’s highs. Hopes for U.S.–Iran talks were balanced by reports of possible further attacks and concerns that fighting could increase after the November 3 U.S. midterm elections. The uptrend remains steady, so higher prices still look more likely. However, a break below the 10-day moving average could suggest September’s highs are proving difficult to clear. News of easing tensions with Iran could then trigger a reversal. Resistance is at $105, $110 and $115, while support is at $100, $95, $90, $85, $80, $75, and $67.50.

Bitcoin

Bitcoin fell sharply last week as reports of a Binance security breach pushed traders to sell. Some traders were also forced to close their positions, adding to the fall. Fears of higher interest rates, rising oil prices and falling technology stocks added pressure. Bitcoin could fall further, but support near $75,000 may hold for now. Waiting for a bounce toward $80,000 and the 10-day moving average could offer a better chance to sell. Resistance is at $80,000, $85,000, $88,000, $90,000 and $95,000, while support is at $75,000, $65,000, $62,000, $60,000, $55,000 and $50,000.

This Week’s Focus

Monday: U.K. S&P Global Manufacturing PMI, U.S. S&P Global Manufacturing PMI and ISM Manufacturing PMI
Tuesday: Australia RBA Interest Rate Decision, U.S. Factory Orders
Wednesday: E.U. HCOB Eurozone Composite PMI and CPI, U.S. Trade Balance, S&P Global Services PMI and ISM Non-Manufacturing PMI
Thursday: Australia Trade Balance, Japan S&P Global Services PMI, U.K. S&P Global Construction PMI, E.U. PPI, U.K. BoE Interest Rate Decision
Friday: Japan S&P Global Services PMI, U.K. Lloyds House Price Index, E.U. Retail Sales, U.S. Nonfarm Payrolls and Michigan Consumer Sentiment

It is a big week for markets. Australia and the UK are both expected to raise interest rates by 0.25 percentage points. Traders will look for clues about whether more increases are coming. Tuesday’s U.S. midterm elections will decide which party controls the House and Senate. Markets will also watch manufacturing data from around the world, followed by Friday’s U.S. jobs report.