The first trading week of the month is always busy with tier-one data. However, with a flood of major central banks into the mix, we are left with a data trader’s dream week. It may be difficult to keep this succinct, but we will give it a go.

Both core and headline Eurozone inflation are expected to continue higher in October whilst flash GDP is expected to turn negative in Q3, making the ECB’s job even harder. There is a trio of major central bank rate hikes due. The RBA is expected to hike by 25 basis points, whilst 75bps are expected from both the Fed and the Bank of England. As ever the size of further hikes will be key for all meetings. Slight declines are expected in the ISM surveys. The week rounds off with the crucial US jobs report. Nonfarm Payrolls are forecast to drop to an all but neutral 200,000 as the labour market tightness continues.

Watch for: 

  • North America – ISM, jobs from the ADP and Nonfarm Payrolls, and crucially the FOMC meeting.
  • Europe – Eurozone inflation and GDP, final PMIs and the Bank of England.
  • Asia – PMIs for Japan, China and Australia; with the Reserve Bank of Australia
  • LatAm –Colombian unemployment along with Brazilian industrial production and PMIs.

North America

N.B. Forecasts are the latest available consensus 

US dollar (USD)

There has been an enormous correction on the USD against major forex as traders have pondered the prospects of a “Fed pivot”. We will learn more from the Fed this week, but a 75bps hike is hotly expected. The question is whether the Fed starts to signal a less aggressive approach for the December meeting and beyond. If the Fed is “data dependent” and/or more mindful of the economic impact of aggressive tightening, it would begin to paint a less hawkish position. Friday’s Nonfarm Payrolls will then take on added importance.

A less hawkish Fed would give further fuel to the USD correction. We would be watching the 109.35 support on the Dollar Index as a gauge this week.

Canadian dollar (CAD)

The Bank of Canada hiked by less than expected last week. The inference was not on the BoC but instead having ripples through the Dollar Index with the prospect of a “Fed pivot”. Despite this, Canadian data will be watched now for downside surprises which could weigh on CAD in its major crosses. Unemployment rising decisively should be watched.

  • USD/CAD – The reaction to support at 1.3495/1.3500 will be key this week. A Fed pivot in the FOMC could drive the pair lower to break the support. This would form a five-week top and imply a correction towards 1.3200. Above 1.3750/1.3775 would be more positive again.


With US “real” bond yields falling over in the past week, there has been a drag on the USD. If this continues, it should help to support commodities. There has not been a decisive recovery on gold yet, but despite choppy moves, silver is in recovery. We are also seeing oil rebounding for now. However, if there is a continued deterioration in the US economic outlook, this seriously questions the outlook for global oil demand and would likely restrict the rally. 

  • Brent Crude Oil – A move back towards the high $90s has formed a five-week uptrend and leaves a slight positive bias to the outlook. Despite this, the bulls need a decisive break above the $99.50 resistance to open the recovery. 
  • Gold – Another bull failure under the $1680/$1690 resistance area has maintained a negative outlook under a six-month downtrend. A move below a mini higher low at $1638 would retest the $1615 key September low. 
  • Silver – The outlook remains uncertain with the moves indecisive. Holding above $18.80/$19.20 leaves a very slight positive bias. Resistance at $19.65/$19.77 is holding back recovery hopes.

Wall Street

A positive start to the earnings season has been weighed down by some disappointing earnings from tech giants such as Amazon, Facebook and Microsoft. This is weighing on the performance of the NASDAQ versus the Dow. It is also weighing on the recent recovery on Wall Street. It means that this week could be key for the medium-term outlook. Supports need to hold to prevent yet another rally from being used as a chance to sell.

  • S&P 500 futures – The recovery has pulled back into breakout support between 3775/3820. This is now an important moment for Wall Street. A move below support at 3735 would suggest the rally is failing and could open renewed selling.
  • NASDAQ 100 futures – Having failed to break above the 11728 key resistance, futures for the tech index have fallen hard. A close below the higher low at 10935 would abort the recovery and re-open the 10485 key October low.
  • Dow futures – The Dow has very little tech weighting and has held up much better than NASDAQ and the S&P 500. Even if the market is weighed down, there is good pivot support between 30970/31380. Resistance at 32660 is a key barrier.


N.B. Forecasts are the latest available consensus 

Euro (EUR)

Despite a 75bps rate hike, there was no hawkish surprise from the ECB last week. The legacy of this is a drag on EUR performance near-term. This week’s HICP inflation will be key, with Friday’s massive leap in Italian inflation raising the prospect of an upside surprise. 

Concerns of the economic slowdown into recession for the euro area have played out mostly through EUR/USD. However, EUR has performed relatively well against GBP (political risk); AUD and NZD (underperforming commodity currencies) and JPY (massive yield differential). However, there are signs of reversals threatening in all of these EURXXX pairs.

  • EUR/USD – The pullback below parity and into the 0.9900/1.0000 support band in the wake of the ECB meeting is a concern. The bulls will need to stand firm to prevent the recovery momentum from being lost. Resistance has been left at 1.0093.

British pound (GBP)

The “Rishi rally” for GBP has played out just as the USD has turned recently corrective. This has fuelled a GBP surge. However, there will be questions about how long this move can last. The Bank of England is a significant risk event this week. A 75bps hike is hotly expected and may give GBP a bump higher near-term. However, we remain deeply sceptical of being long of GBP for any extended period. Negative economic fundamentals (rising inflation, negative growth, >5% on twin deficits) leave GBP vulnerable to renewed selling. For now, we play the recovery, but very cautiously.

  • GBP/USD – As Cable has pulled back the key question will be how traders react to the support band between 1.1380/1.1500. If this band can hold then the prospect of further recovery remains possible. Resistance at 1.1645 is preventing further recovery towards 1.1750. 


With the tech stocks weighing down Wall Street, European indices are holding up relatively well. DAX is still way ahead of FTSE 100 in recovery, as it always is with a risk-positive rebound. If this moves into reverse, we expect DAX would underperform FTSE 100 on the way down.

  • DAX – A test of the primary downtrend will be crucial this week. Near-term rallies of April and July/August failed at the 2022 downtrend, so if this happens again there is a risk of a decisive downside taking hold once more. Support at 12735/12935 will be key this week.
  • FTSE 100 – A slow and steady near-term rally is still on track but there is considerable resistance between 7106/7128 that is a barrier to gains. With the daily RSI back around 50 this is an important crossroads for the medium-term outlook. Below 6965 support would suggest the rally faltering.


N.B. Forecasts are the latest available consensus 

Japanese yen (JPY)

With global yields beginning to track lower, we have seen a JPY recovery in the past week. With the BoJ doing little to change tack on its dovish path, this leaves JPY positively correlated to yield differentials. It means the FOMC meeting will be a key risk event for JPY (as will Nonfarm Payrolls). Falling US yields would help support a JPY recovery on its major crosses.

  • USD/JPY – A massive jump in trading volatility in the past week along with a USD corrective move dragged back to key support of the old September highs at 145.00/145.90. Picking up from there the USD is strengthening again with renewed upside potential. Above 149.50 re-opens the 151.95 highs.
  • AUD/JPY – The outlook has become far more uncertain in the past week. Long shadows on the daily candles and fluctuating daily closes reflect an indecisive outlook. However, holding above 94.20 support leaves a mild upside bias for pressure on the 95.30/95.75 resistance.

Australian dollar (AUD)

The Reserve Bank of Australia (RBA) is expected to be cautious again with another +25bps hike. However, last week's higher-than-expected Q3 inflation has helped to support AUD near-term and will make the meeting a little less certain.

  • AUD/USD – A near-term recovery has been dragged back. The key issue for this week is whether support around 0.6345/0.6390 can hold. Losing this support would suggest renewing selling pressure and a continuation of a sell into strength strategy. Resistance at 0.6520/0.6550 is strengthening.

New Zealand dollar (NZD)

Having been deeply unloved between August and September, the NZD is finding October is much kinder. The NZD is the best-performing major currency of the past two weeks and shows good signs of continuing the move.

  • NZD/USD – The recovery has decisively broke a 10 week downtrend. But as the move begins to roll over the question is whether the weakness is seen as a chance to buy. Reaction to support between 0.5670/0.5775 will be key. Resistance at 0.5875 is a barrier to 0.6000.


N.B. Forecasts are the latest available consensus 

Brazilian real (BRL)

With a continued steady performance versus the USD, the BRL has missed out on a “Fed pivot” rally that other more volatile Lat Am currencies (such as CLP and COP) have experienced. However, we continue to favour the ranging stability of BRL with a Fed pivot and USD correction still to be determined.   

  • USD/BRL – the bull failures are coming consistently between 5.3600/5.4600. However, there is a marginal positive bias to the RSI (between 40/65) that is leaving a gradual run of higher lows and a bias towards the range highs. Support at 5.1700 is a higher low.

Mexican peso (MXN)

With GDP expected to improve marginally to 1.1% QoQ in Q3, this should help to support the continued (albeit gradual) outperformance of the MXN. However, a move into contraction of the manufacturing PMI would be less encouraging.

  • USD/MXN – An slight bias of MXN outperformance has come as the USD has seen a recent correction. This is weighing on the pair and is putting pressure on the support band 19.750/19.850. A downside break opens 19.410/19.470. Resistance at 20.175 is now a lower high. 

This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. INFINOX is not authorised to provide investment advice. No opinion given in the material constitutes a recommendation by INFINOX or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.