Solid Goold Trading

Monday’s Edition

With Nick Goold

It was a quiet week in the markets as the U.S. government shutdown became the longest on record. The shutdown hurt confidence and delayed important U.S. economic data. Stocks in the U.S. fell as investors worried that prices are too high and that company profits may slow.

New data also showed signs of weakness in the U.S. economy. The Challenger report revealed that layoffs in October reached the highest level in 20 years, as more companies began using AI to cut costs. Consumer confidence also dropped to its lowest point since 2022, showing that many Americans are becoming more worried about a slowdown.

In the U.K., the Bank of England kept interest rates the same, but four of the nine members voted to cut rates — a sign that some are worried about the economy. In Japan, the Bank of Japan’s September meeting minutes showed that two members supported raising rates to 0.75%, suggesting that Japan may slowly move toward higher interest rates even as other countries consider cutting them.

Markets This Week

U.S. Stocks

The Dow index fell below its 10-day moving average last week as investors continued to take profits amid concerns about overvaluation and signs of a slowing U.S. economy. With the market now trading under this key level, further short-term weakness is likely to continue. Resistance levels are at 47,500, 48,000, and 49,000, while support lies at 46,500, 46,000, 45,500, and 45,000.

Japanese Stocks

The Nikkei 225 fell over 4% last week, which looks big but makes sense after the strong rally in recent months. Profit-taking and weakness in U.S. stocks pushed the market lower. The Japanese government still plans to announce a new stimulus package later this month to support the economy, which could help limit further losses. With the uptrend now broken, traders can look for range-trading chances this week and take advantage of high volatility. Resistance is at 51,250円, 52,000円, and 53,000円, while support is at 50,000円, 49,000円, 48,500円, and 47,000円.

USD/JPY

The USD/JPY continued to test higher last week after the Bank of Japan decided to delay any rate hikes. However, new Finance Minister Satsuki Katayama expressed concern about the yen’s weakness, raising the possibility of intervention and leading the pair to close slightly lower for the week. While the yen is likely to stay weak overall, a move above 155 seems unlikely in the short term, making the current market conditions attractive for range traders. Resistance is at 154.5, 155, and 156, while support is at 153, 151.5, 151, and 150.

Gold

Gold moved lower early last week but held firm at the $3,900 support level. The market closed the week higher, staying above the 10-day moving average as buyers returned on growing concerns about U.S. equities and the broader economy. Similar buying interest is expected this week, with the market likely to trade sideways to slightly higher and test the $4,050 level. Resistance is at $4,050, $4,150, and $4,200, while support stands at $3,925, $3,900, and $3,800.

Crude Oil

WTI came under pressure last week, falling below the key $60 support level as weak U.S. economic data and concerns about lower demand from China weighed on prices. The 10-day moving average is now turning lower, suggesting that further weakness is likely. Traders should focus on selling opportunities as long as prices remain below the 10-day moving average. Resistance is at $65, $66.50, $70, and $75, while support is at $55 and $50.

Bitcoin

Bitcoin fell below key support at $106,000 as rising risk-off sentiment triggered selling from technical traders. While retail investors have continued to buy, institutional investors are showing more caution, adding to downward pressure. Further liquidation is possible, so it’s better to look for selling opportunities near the 10-day moving average as long as the market stays below $106,000. Resistance is at $106,000, $116,000, and $120,000, while support stands at $100,000, $95,000, and $90,000.

This Week’s Focus

Tuesday: Japan Current Account, U.K. Unemployment Rate, E.U. ZEW Economic Sentiment
Thursday: Australia Unemployment Rate, U.K. GDP and Industrial Production, U.S. Initial Jobless Claims
Friday: E.U. GDP and Trade Balance

Traders are focusing on investor sentiment as delays to important U.S. economic data from the government shutdown make it hard to understand the current outlook. The Japanese yen is in focus, as more weakness could lead to action from the Bank of Japan, while gold traders are watching to see if prices can recover after recent losses. Bitcoin is holding near key support at $100,000, keeping volatility high and leaving the risk of a sharp drop.