The 2-hour chart for Brent crude shows a price of around $105.50. Price has maintained its more recent higher lows sequence.
Also notable is the fact that price is comfortably above both moving averages as well as the rising support trendline. The recent dip from the $107 area has not altered the bigger bullish scenario.
The first target I am watching is $107.22. A break above that level would expose $109.90 and then $112.68. Support is situated at $102.30, $99.62 and $96.87.
RSI is above the 50 line. I am bullish while $102.30 and the rising trendline are holding. A close above $107.22 would be more bullish for the $109.90 area, and a close below $102.30 would be more bearish.
The Pound US Dollar (GBP/USD) exchange rate fluctuated on Monday, as expectations of a Bank of England (BoE) interest rate hike next month offered some support to Sterling, while concerns surrounding the UK’s upcoming Autumn Budget kept the pairing unsettled.
At the time of writing, GBP/USD was trading at $1.3230, having wavered throughout the session.
The Pound (GBP) drew some support on Monday as rising inflationary pressures strengthened expectations that the Bank of England could raise interest rates next month.
According to accountancy and advisory firm BDO, businesses are facing their most acute inflationary pressures since June 2023, with higher energy and raw material costs driving the increase.
However, concerns over the UK’s public finances capped Sterling’s support, after the Institute for Fiscal Studies (IFS) warned that rising inflation had helped create a £35bn funding shortfall ahead of the Autumn Budget.
The US Dollar (USD) initially came under pressure on Monday as investors showed a greater appetite for risk, but the ‘Greenback’ later regained some support.
Sentiment deteriorated following reports that Russia had attacked Ukrainian energy infrastructure on Sunday evening, despite US President Donald Trump claiming earlier that morning that both sides had agreed to an ‘energy ceasefire’.
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Near-Term GBP/USD Forecast: BoE and Fed Speakers in Focus
Looking ahead, Tuesday’s speeches from Bank of England policymakers Megan Greene and Swati Dhingra could offer fresh clues about the outlook for UK interest rates.
With Greene generally taking a hawkish stance and Dhingra leaning dovish, any conflicting messages could leave the Pound without a clear direction.
Federal Reserve officials are also scheduled to speak.
If their comments strengthen expectations of a December rate hike, the US Dollar could find further support.
Meanwhile, changing risk appetite is likely to remain a key driver for the safe-haven ‘Greenback’.
Shifts in sentiment could therefore keep the Pound US Dollar exchange rate volatile.
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The weekly chart also supports the potential for an eventual resolution to the upside above $3.298. Last week, a bullish continuation signal was confirmed by a weekly close above the prior week’s high of $3.18. This resulted in a higher weekly low and higher high, suggesting that the weekly bullish trend was continuing after a higher swing low formed at $2.817 (A) last month.
If the bullish advance resumes after the current short-term consolidation, the September high of $3.317 and June high of $3.396 define a range of potential resistance. In addition, a measured move points to $3.41 as a potential upside target. Because this target is relatively close to the July high of $3.396, the two levels form a potential resistance zone between $3.396 and $3.41. A test of that zone could therefore mark the next significant challenge for buyers if natural gas breaks above the nearer resistance levels. For now, the ability to hold support near $3.10 and break above $3.204 remains important to the bullish outlook.
WTI oil rallied as traders focused on the situation in Saudi Arabia. Iran-backed Houthis attacked Saudi airports over the weekend. Saudi Arabia said that the “cowardly terrorist attack”, which led to civilian deaths, was a war crime by the Houthis.
Oil traders bet that Saudi Arabia would be forced to respond, engaging in a full war against the Houthis. In turn, the Houthis could attack oil facilities in Saudi Arabia. The U.S. may choose to help Saudi Arabia in the war against the Houthis. Put simply, the risks of additional escalation in the region are rising on a daily basis.
U.S. Dollar Index gains ground as traders focus on rising oil prices. Oil markets gained 2% amid escalation in the Middle East. Iran-backed Houthis attacked Saudi airports, killing civilians. Traders bet that U.S. may intervene to provide additional support to Saudi Arabia. Such a scenario would be bullish for oil prices and will raise inflation risks, providing additional support to the U.S. dollar.
Currently, U.S. Dollar Index is trying to settle above the resistance level at 102.35 – 102.50. This resistance level has been tested many times and proved its strength. In case U.S. Dollar Index manages to settle above 102.50, it will head towards the next resistance at 103.15 – 103.30.
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Daily chart of the U.S. 2-Year Yield (US02Y) on TradingView consolidating around 4.791% above EMAs at 4.560% and 4.143%.
The first market I’m watching, of course, will be the two-year yield. That’s been the game for a while. It is rising slightly during the day. Although let’s keep in mind, today is Columbus Day, so certain bank traders won’t be at work. In Canada, we have Thanksgiving, so North America is going to be pretty thin at this juncture.
Daily chart of Natural Gas Futures (NG1!) on TradingView with price pulling back to 3.125 near the 200-day EMA amid holiday trading.
Natural gas gapped lower to kick off the trading session and then continued to fall toward the 200-day EMA. That being said, keep in mind that Monday is a bank holiday in the United States and Canada, so we’ll have to wait and see whether or not that makes a difference with liquidity. A huge portion of natural gas trading is done out of North America. It is a North American contract, and therefore this is important.
Ultimately, not a lot has changed. We are still stuck between the $3 and $3.30 levels. This is a market that is starting to roll over into colder temperatures, and that should help demand, therefore increasing price. But we are at that time of year in the United States where it might get a little cold at night, but it is warm enough during the day that you are not really heating your home.
GBPJPY maintained its bullish corrective trajectory through this morning’s trading session, posting several positive closes above the 208.10 level. The pair responded to stochastic’s positive signals and is currently fluctuating near 209.60.
The price is now expected to resume its corrective bullish attempts, potentially advancing toward the resistance barrier near 210.40 in the near term. If positive factors persist, the pair may successfully test the resistance level near 211.25, which in turn represents a key threshold for confirming the broader trend in upcoming trading sessions.
The expected trading range for today is between 208.90 and 210.40
Platinum completed its latest bullish corrective rebound after touching the $1705.00 level, before moving into sideways trading in an attempt to confirm the continuation of its current bearish trend, with $1740.00 now acting as an additional resistance barrier.
The conflicting signals from the main technical indicators may push the price into further sideways trading. We will therefore continue to wait for the price to gather the necessary negative momentum to renew its bearish attempts, gradually moving toward $1650.00 and $1605.00.
The expected trading range for today is between $1740.00 and $1740.00
