Market Sector Scanner: USD/JPY and Nikkei Surge as Bank of Japan Holds Rates Unchanged
The Bank of Japan’s decision to keep rates unchanged lifted USD/JPY above 153 and pushed the Nikkei 225 past 50,000. Global stocks hit record highs, gold slipped below $4,000 on profit-taking and a stronger U.S. dollar.
Risk-on sentiment strengthened last week, with global stocks hitting new record highs. The Nikkei 225 surged past 50,000 on hopes that new Prime Minister Sanae Takaichi will launch major stimulus measures and the Bank of Japan will keep rates unchanged. The U.S. Federal Reserve cut its key rate by 0.25%, but Chair Jerome Powell’s comment that more cuts aren’t guaranteed lifted the U.S. dollar. Meanwhile, U.S. – China trade talks reached a draft deal to pause new tariffs, and the European Central Bank held rates steady while noting signs of recovery in Germany’s economy.
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Key Events Calendar for November 3 – 7
Market Sector Scanner
Forex Market
USD/JPY
Last Week Recap
Another strong week for USD/JPY, as the Bank of Japan resisted calls for an interest rate hike while the U.S. Federal Reserve signaled that a December rate cut is not certain. This combination pushed the pair above key resistance at 153, reinforcing bullish momentum.
Technical Picture
The uptrend remains solid, with the 10-day moving average continuing to point higher. However, the upper Bollinger Band is acting as short-term resistance, limiting further gains for now.
Outlook This Week
With few major news events on the calendar, the bullish sentiment is unlikely to change. Traders may look to buy on dips near the 10-day moving average and above the 153 level, anticipating continued upward movement.
GBP/JPY
Last Week Recap
GBP/JPY came under pressure last week as concerns grew about the state of the U.K. economy and potential tax increases, which could weigh on growth.
Technical Picture
Support at 200 held firmly, and with the lower Bollinger Band now rising, the support area looks solid. The 10-day moving average remains flat, suggesting that range trading conditions are likely to continue.
Outlook This Week
While yen weakness remains supportive, worries about the U.K. economy persist. The best strategy this week appears to be range trading between 200 and 205, taking advantage of both sides of the market within that range.
EUR/USD
Last Week Recap
The U.S. Federal Reserve’s signal that it may not cut interest rates in December kept EUR/USD under pressure last week, pushing the pair to its lowest level since August.
Technical Picture
EUR/USD broke below key support at 1.1550, and although the lower Bollinger Band is offering some temporary support, the downward-sloping 10-day moving average suggests continued bearish momentum.
Outlook This Week
Selling near resistance at the 10-day moving average remains the preferred strategy, as the market appears poised for a quick move lower to test the next major support level at 1.1400.
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Equities
U.S. Stock
Last Week Recap
The Nasdaq started the week strongly, testing higher on upbeat earnings from major U.S. technology companies. However, comments from the U.S. Federal Reserve suggesting a possible delay in future rate cuts caused the market to turn lower toward the end of the week.
Technical Picture
A sell signal was triggered near the upper Bollinger Band at the end of the week, though the 10-day moving average still points higher, indicating that the broader uptrend remains intact. The market may attempt to resume its upward move later this week.
Outlook
The loss of upward momentum at the end of last week is slightly concerning. In the short term, some weakness and a pullback toward the 10-day moving average can be expected. While a break below this level seems unlikely, it could trigger quick profit-taking and a sharper short-term decline if it occurs.
Commodities
Gold
Last Week Recap
Gold extended its decline last week as further profit-taking continued, with U.S. stock markets reaching record highs and a stronger U.S. dollar weighing on sentiment. Prices fell below the key $4,000 level as investors shifted toward equities.
Technical Picture
The short-term trend has turned bearish, with the 10-day moving average now pointing lower. However, the upward-sloping lower Bollinger Band is expected to provide support and limit further downside losses this week.
Outlook This Week
With the market returning to the important $4,000 level, sideways movement is likely in the near term. Range trading opportunities should be plentiful this week as gold consolidates after recent volatility.
