Market Sector Scanner: Markets Stay Cautious After U.S. Shutdown Ends as Rate Cut Expectations Shift
The record U.S. government shutdown weighed on sentiment and delayed key data, driving stocks lower. The yen faced growing intervention risk, while gold rebounded above $4,000 as traders shifted to a cautious, range-trading approach ahead of key global events.
The end of the U.S. government shutdown pushed U.S. stocks to new highs and USD/JPY above 155. Concerns about high AI stock valuations and Fed comments suggesting slower rate cuts led to selling later in the week. Expectations for a December rate cut have fallen to about 50%, down from nearly 95% a month ago. With few key economic releases due to the shutdown, markets are still waiting for data to determine the next major move. Gold attracted strong buying interest and Bitcoin dropped below $100,000 as risk appetite weakened.
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Key Events Calendar for November 17 – 21
Market Sector Scanner
Forex Market
USD/JPY
Last Week Recap
USD/JPY continued to test higher last week, briefly touching 155 as comments from U.S. Federal Reserve officials reduced the probability of a December rate cut to around 50%. Despite growing concerns from the Japanese government about yen weakness, there are still no signs of intervention.
Technical Picture
Although the market failed to hold above the 155 resistance level, the 10-day moving average is still trending slightly higher. USD/JPY remains in the upper half of the Bollinger Bands, suggesting ongoing upside bias, but momentum has slowed.
Outlook This Week
The uptrend is still strong, and a Bank of Japan rate hike now looks delayed until January. However, further large gains may be difficult in the near term. A range-trading approach is recommended this week, with traders looking to buy near support levels and sell near resistance.
GBP/JPY
Last Week Recap
GBP/JPY had a positive week despite weaker-than-expected U.K. GDP, as GBP/USD managed to recover some recent losses. A potentially delayed Japanese interest rate hike also supported GBP/JPY.
Technical Picture
The market is now near the upper Bollinger Band, which could act as resistance in the coming week. The 10-day moving average has turned slightly higher, showing an upward bias.
Outlook This Week
GBP/JPY is still trading in the 200–205 range, and this is likely to continue. With resistance nearby, selling opportunities may appear within this range during the week.
EUR/USD
Last Week Recap
EUR/USD found support last week as the end of the U.S. government shutdown boosted risk sentiment, while stronger-than-expected EU GDP data encouraged buyers.
Technical Picture
Last week’s rise turned the 10-day moving average higher. However, gains were capped by the late October highs, and the upper Bollinger Band is now approaching, which could act as resistance in the coming days.
Outlook This Week
The market may pull back toward the 10-day moving average if risk sentiment weakens again. A sustained move above 1.1650 would signal the potential for further upside.
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Equities
U.S. Stock
Last Week Recap
Concerns over high valuations in AI-related stocks led to selling in the Nasdaq last week. Although the end of the U.S. government shutdown provided some early relief, it was short-lived as bearish sentiment quickly returned.
Technical Picture
The 10-day moving average is now trending lower and acted as resistance several times last week. On the downside, the lower Bollinger Band and early November lows offered support, helping to limit further losses.
Outlook
Valuation worries are likely to continue this week, so selling remains the preferred strategy as long as the market stays below the 10-day moving average. A break above this level would be needed to shift sentiment back to bullish.
Commodities
Last Week Recap
Gold’s uptrend resumed last week as safe haven buyers returned, pushing prices higher early in the week amid concerns over stock market risks. However, expectations of a delayed U.S. rate cut later weakened sentiment, trimming some of those gains toward the end of the week.
Technical Picture
The 10-day moving average is now pointing higher and acting as support. The Bollinger Bands are narrowing, with the upper band near last week’s highs potentially acting as resistance.
Outlook This Week
Gold looks positive again, with safe haven demand likely to continue. Buying is preferred as long as the market stays above the key $4,000 level.
With the U.S. shutdown over, nervous markets are hoping for positive news to avoid more selling. Volatility may rise this week as traders watch Fed speeches and FOMC minutes for clues on possible rate cuts. In Japan, GDP and CPI data could affect the BoJ’s next move, while the weak yen keeps intervention risks in focus.
