Silver XAGUSD traded sideways for 6 days and then broke above the upper end of the range late Friday giving a buy signal for 2465/70, 2480/85, 2500 & my next target of 2520/25 (hit yesterday as predicted). A high for the day right at this target, but further gains look like towards 2550/60 before the end of the week.
We should have support again at 2490/80 after we saw a low for the day exactly here. Longs need stops below 2470. A break lower risks a slide to a buying opportunity at 2420/10 & longs need stops below 2390.
We also saw a low for the day in EURUSD, but selling USDJPY was more difficult.
The first sell order was stopped at 147.20/30 (and we are now trading below that level) & then we held 10 pips from 148.00 – you know my outlook on the pair is negative & has been for 2 weeks so I hope you are still somehow holding a short position.
I am sure you remember that I have downside targets as far as 146.00 & even 140.00 is not out of the question.
GBPUSD buying opportunity unfortunately missed by 12 pips yesterday, but I am sticking with this level today.
AUDUSD should have very strong support at 6590/80 in the short term bullish trend.
NZDUSD made a low for the day right on the buying opportunity at 6140/30.
Unfortunately, I made a mess of the GBPJPY trade & got in too early…the pair has dropped back below the sell level. I will leave it and watch.
Treasury Yields and Dollar Movement
Treasury yields fell on Wednesday.
The dollar rose to a 3-1/2 month low and the MSCI world equity index was barely higher.
US Equity Performance
The S&P 500 edged lower, the Nasdaq dipped, while the Dow edged higher.
Investors were awaiting a key inflation report due out early Thursday.
Commerce Department GDP Data
U.S. GDP rose at a 5.2% annualized rate in Q3, up from a revised 4.9%.
This is the fastest expansion since Q4 2021, which is an encouraging sign for the economy.
The GDP report confirmed that inflation is trending lower, suggesting a potential Goldilocks scenario.
Mixed Messages from Federal Reserve Officials
Fed officials delivered mixed messages on monetary policy on Wednesday.
Fed Governor Christopher Waller suggested that rate cuts could begin in a few months if inflation eases.
Fed Bank of Atlanta President Raphael Bostic said he expects U.S. growth to slow and inflation to ease.
Richmond Federal Reserve Bank President Thomas Barkin is “skeptical” of easing inflation and is considering another rate hike.
Dollar Performance
The dollar climbed from its lowest level in more than three months after four days of losses.
The greenback rose against most currencies except the Swiss franc and New Zealand dollar.
On track for its biggest monthly decline in a year on expectations of Fed rate cuts by H1 2024.
US Gross Domestic Product (GDP) Data
U.S. GDP rose at a 5.2% annualized rate in Q3, faster than the previously reported 4.9%.
The dollar extended gains, supported by robust economic data.
Financial Conditions and Rate Cut Expectations
U.S. financial conditions are the loosest since early September, easing 100 basis points in one month.
U.S. interest rate futures markets are pricing in more than 100 basis points of rate cuts in 2024, starting in May.
The two-year Treasury yield is at its lowest since July, down nearly 40 basis points in a week.
Currency Movements
The dollar index was up 0.205%, while the euro was down 0.16% at $1.0972.
Japanese yen strengthened 0.15% against the greenback, British pound last traded at $1.2696, up 0.02%.
Oil Prices
Oil prices rose more than $1 on the possibility that OPEC+ will extend or deepen supply cuts.
Brent crude rose $1.42 to settle at $83.10, while WTI crude gained $1.45 to settle at $77.86.
Gold Prices
Spot gold hit a seven-month high of $2,051 an ounce.
Gold futures were up 0.28% at $2,045.70 an ounce.
Upcoming Events
Euro-zone inflation figures and the Fed’s preferred measure of U.S. inflation (PCE) will be released on Thursday.
