Solid Goold Trading

Monday’s Edition

With Nick Goold

WTI crude oil continued to rise above $100 as tensions with Iran increased and President Trump threatened further attacks. Higher oil prices and concerns about heavy spending on AI infrastructure weighed on global stocks. Much weaker than expected U.S. housing data also added to worries about the economy.

Investors moved into U.S. government bonds as they looked for safety, pushing the 10-year Treasury yield below 5% for the first time in about a month. Lower yields weakened the dollar and helped the yen strengthen. Japan’s nationwide core inflation, which excludes fresh food, rose 2.1% from a year earlier, remaining above the Bank of Japan’s 2% target.

UK unemployment unexpectedly fell, raising expectations that the Bank of England could increase interest rates at its November 5 meeting. Meanwhile, markets remained concerned that Trump could step up military action against Iran to break the deadlock, as weak polling added to political pressure ahead of the U.S. midterm elections.

Markets This Week

U.S. Stocks

The Dow continues to benefit as investors move away from technology stocks and into more defensive sectors. The 10-day moving average is still rising, but last Friday’s decline has slowed bullish momentum. Range trading may offer the best opportunities this week as markets await the Federal Reserve’s interest rate decision. Resistance is at 53,000, 53,750, 54,000 and 54,500. Support is seen at 52,000, 51,000, 50,000 and 49,000.

Japanese Stocks

The Nikkei fell again last week as AI-related stocks continued to sell off. Higher WTI crude oil prices added pressure by raising costs for Japanese companies and consumers. The downtrend remains strong, so look for selling opportunities if the index rebounds toward the 10-day moving average, which is acting as resistance. 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

USDJPY fell last week as U.S. long-term bond yields declined and markets expected the Federal Reserve to leave interest rates unchanged this week, finally moving away from the 158 level. The short-term chart has turned bearish, favouring selling on rebounds as the pair looks set to test lower levels ahead of this week’s U.S. and Japanese central bank meetings. 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 had a disappointing week, falling below $4,000 as oil prices rose further above $100, raising fears of U.S. interest rate hikes. Some investors also sold gold to cover losses in AI-related stocks. Prices could now settle around the key $4,000 level, offering opportunities to trade the range on either side. Resistance is at $4,065, $4,100, $4,150, $4,220, and $4,250, while support is at $3,950, $3,900, $3,800.

Crude Oil

WTI continued to rise above $100 as fears grew of a major U.S. attack on Iran, with Trump seeking to end the war and boost his popularity ahead of the U.S. midterm elections. The uptrend remains strong, supported by supply concerns and a bullish chart. Look for buying opportunities on dips toward the 10-day moving average. Resistance is at $105, $110 and $115, while support is at $100, $95, $90, $85, $80, $75, and $67.50.

Bitcoin

Bitcoin came under pressure last week as falling AI-related stocks reduced demand for risky assets. Investors also pulled large amounts of money from Bitcoin ETFs last Thursday. Growing concerns about too much investment in technology could keep Bitcoin under pressure in the short term. Resistance is at $88,000, $90,000, $95,000 and $100,000, while support is at $79,000, $75,000, $65,000, $62,000, $60,000, $55,000 and $50,000.

This Week’s Focus

Monday: E.U. German Business Expectations
Tuesday: Japan BoJ Core CPI, U.S. Building Permits, Durable Goods Orders, CB Consumer Confidence and New Home Sales
Wednesday: Australia CPI, U.S. Goods Trade Balance and Fed Interest Rate Decision
Thursday: U.S. Core PCE Price Index and GDP, E.U. ECB Interest Rate Decision
Friday: Japan Tokyo Core CPI, Unemployment Rate, Industrial Production and BoJ Interest Rate Decision, Australia PPI, E.U. German Unemployment Rate and German GDP, E.U. GDP and Unemployment Rate, U.S. Employment Cost Index and Chicago PMI

Central bank meetings are the main focus this week. The Federal Reserve, Bank of Japan and European Central Bank are expected to keep interest rates unchanged, with only a 10% chance of a Fed hike. Markets expect all three to raise rates in December, so traders will look for clues in their statements. Tuesday’s U.S. Durable Goods Orders report is the key data release. Early voting has also begun ahead of the November 3 midterm elections. Trump’s promise of a $5,000 payment to every adult U.S. citizen if Republicans keep both the House and Senate could raise concerns about more government borrowing and higher bond yields.