The Impact of FED’s Decision and ISM Manufacturing PMI in November 2023

In November 2023, the Federal Reserve (FED) once again held its rates unchanged, marking the second consecutive time for such a decision. Investors and financial experts alike anticipated and conjectured about this FED move.

In addition, the Manufacturing Purchasing Managers Index (PMI) for October was released by the Institute for Supply Management (ISM), providing insight into the status of the US manufacturing industry.

Key Takeaway: FED’s Inflation Concerns

The FED’s Response to Inflation

The foremost concern addressed by the FED was the persistence of high inflation. FED Chairman Jerome Powell emphasized that inflation had exceeded the FED’s long-term target of 2%. Specifically, the total Personal Consumption Expenditures (PCE) prices had surged by 3.4% over the 12 months ending in September.

(Federal Funds Rate, FED)

Monetary Policy Consideration

Powell’s statement shed light on the FED’s approach to managing inflation. He articulated that any future rate hikes would be executed with great caution, considering factors such as the cumulative impact of prior rate adjustments, the time lag in the transmission of monetary policy effects, and the prevailing economic and financial market conditions.

Market Impact: USD Index Decline

Following the FED’s announcement, the USD index (DXY) experienced a noticeable decline, moving from 106.66 to 106.35. This underscores the strong correlation between the FED’s monetary policy decisions and currency markets, making them of paramount importance to traders and investors.

Insights into ISM Manufacturing PMI for October 2023

The Escalating Contraction

The ISM’s Manufacturing PMI data for October 2023 unveiled a worrisome trend. The U.S. manufacturing sector continued to contract, with the pace of contraction intensifying. The PMI declined by 2.3%, reaching 46.7%, in contrast to the 49% recorded in September, emphasizing the sector’s ongoing challenges.

(Manufacturing Purchasing Managers Index PMI,ISM)

Decline in New Orders

A critical factor contributing to the sector’s struggles is the downturn in new orders. Firms are grappling with reduced demand for their products, which has a detrimental impact on production and overall growth.

Challenges in Export Orders

While there was a moderate rise in the new export orders index, it remained within contraction territory. This suggests that the international market is not providing the expected boost to U.S. manufacturers.

Backlogs of Orders: A Persistent Issue

The backlogs of orders index also saw a slight decline, maintaining its position within sharp contraction territory. This signifies that manufacturers are contending with the backlog of existing orders, which can have ripple effects on future production.

Bottom Line

In conclusion, the FED’s unwavering stance on interest rates and the ISM Manufacturing PMI for October 2023 offer essential insights into the state of the U.S. economy. Staying well-informed about these developments is vital for making sound financial decisions in a constantly evolving economic landscape.

Comprehensive USD/CAD for November 2, 2023

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USD/CAD for 2nd November 2023. 

Key Takeaways 

• Federal Reserve’s attitude: The interest rate decision of Federal Reserve did not change the policy interest rate as expected. Fed members have been working hard to balance the two risks. They do not want to raise interest rates too much and cause an unnecessary deep recession, nor do they want to accelerate inflation again or stabilize well above the 2% target. 
• The Canadian dollar may be favored: The Canadian employment survey shows that the labor market continues to be tight and wages continue to rise significantly. The unexpectedly strong data raised the possibility of further interest rate hikes from the Bank of Canada, while the prospect of higher oil prices also increased the likelihood of a higher Canadian dollar. 

USD/CAD Technical Analysis 

USD/CAD Daily Chart Insights

• Stochastic Oscillator: After the indicator formed a short signal in the overbought area, it began to turn downward yesterday, suggesting that the exchange rate may begin to decline. 
• Price Action: After the exchange rate fluctuated at a high level for four trading days, it closed as a small doji candle yesterday. If it finally closes the dark candle bar today, the market may adjust downward in the future. 
• 5-day moving average: The 5-day moving average has supported the continuous upward trend. If the market closes below the 5-day moving average, the upward trend of the exchange rate will end in the short term. 

USD/CAD 1-hour Chart Analysis

• Stochastic oscillator: The indicator is still in the oversold area, and there is no bull signal, suggesting that the current short forces have the upper hand and cannot easily choose to buy the bottom. 
• Price Action: Since October 31st, it has fluctuated at high levels to form a rectangular range. After the market fell below the range, the red 65-period moving average failed to support the decline. The next target of the market is the black support line, which may also be the 200-period moving average. 

Ultima Markets MT4 Pivot Indicator

• According to the pivot indicator in Ultima Markets MT4, the central price of the day is established at 1.38655, 
• Bullish Scenario: Bullish sentiment prevails above 1.38655, first target 1.38898, second target 1.39233; 
• Bearish Outlook: In a bearish scenario below 1.38655, first target 1.38321, second target 1.38076. 

Conclusion 

The Bitcoin ETF Hype

In October, cryptocurrency prices increased significantly, especially for bitcoin. Bitcoin had its biggest monthly hike since January.

Investors were excited about the possibility that bitcoin exchange-traded funds (ETFs) may soon be approved in the United States. ETF offers easy and affordable access for the average investor as compared to investing in cryptocurrency itself or existing products. 

The Bitcoin ETF Revolution

Simplifying Crypto Investments

Bitcoin ETFs, once approved, have the power to reshape the way individuals engage with cryptocurrencies. They present a user-friendly and cost-effective means for the average investor to participate in the digital asset realm.

Unlike the traditional method of direct cryptocurrency investment, which can be complex and intimidating, Bitcoin ETFs provide a structured and approachable entry point.

Mainstream Legitimacy

The impending approval of Bitcoin ETFs heralds a new era of legitimacy for cryptocurrencies. These ETFs bridge the gap between traditional financial markets and the crypto space, bringing credibility to the forefront. With the backing of mainstream financial institutions, Bitcoin’s status as a viable investment asset is reinforced.

The Ripple Effect

Broad Market Growth for Bitcoin

The surge in Bitcoin’s price triggered a ripple effect throughout the cryptocurrency market. The CoinDesk Market Index (CMI), tracking various tokens, recorded an impressive 22% growth during October. This upswing signifies a prevailing bullish sentiment, injecting confidence into the crypto landscape.

Bitcoin Market Capitalization Soars

TradingView data reveals that the total market capitalization of all cryptocurrencies soared by nearly 19%, reaching a substantial $1.255 trillion. This surge represents the most significant increase in crypto wealth since January, underlining the market’s resilience and growth potential.

(BTCUSD One-month Chart)

Bitcoin’s Outstanding Performance

Bitcoin’s Ascendancy

Bitcoin (BTC), the pioneer of cryptocurrencies, outperformed its peers during this remarkable rally. BTC advanced by more than 27%, achieving a 17-month high of $35,000. This surge followed a period during which it traded around $27,000 in the early weeks of October. Currently, Bitcoin maintains its position above $34,000, as investors eagerly await the Federal Reserve’s interest rate decision.

Confidence in Bitcoin

Bitcoin’s impressive performance during this surge underscores its appeal to investors worldwide. Its stability above $34,000 signals growing confidence in Bitcoin as a long-term store of value and investment asset.

Conclusion

The surge of Bitcoin in October 2023 was nothing short of phenomenal, fueled by the prospects of Bitcoin ETF approval in the United States. This surge not only transformed Bitcoin but had a cascading effect on the broader cryptocurrency market. It showcased resilience, promise, and Bitcoin’s enduring position as a prominent player in the digital asset landscape.

The cryptocurrency market is still changing as time goes on. The forthcoming introduction of Bitcoin ETFs into traditional financial markets marks a significant turning point, providing investors of all stripes with accessibility, legitimacy, and a wide range of investment options.

Comprehensive EUR/USD for November 1, 2023

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the EUR/USD for 1st November 2023. 

Key Takeaways 

• ECB monetary policy: The latest interest rate decision of the European Central Bank has chosen to suspend interest rate hikes, it is the first time since July 2022.  As expectations for the suspension of interest rate hikes have been generally reflected in the markets, short-term volatility in Europe and the United States will be modest.
• Economic outlook for the Eurozone: The manufacturing industry in the Eurozone continues to decline, the service industry is weak, demand is sluggish, and the economy may remain fragile in the coming months. 
• The US dollar may be strong: The market is betting that the interest rate decision announced by the Federal Reserve early Thursday may not raise interest rates, but may maintain hawkish rhetoric. The yield of two-year US bonds, which are more sensitive to monetary policy, rose to 5.08% 

EUR/USD Technical Analysis 

EUR/USD Daily Chart Insights

• Stochastic Oscillator: The indicator’s fast line and slow line were entangled yesterday, and the market entered a oscillating rhythm again. Wait for the indicator to show long or short signals. 
• Price Action: After the exchange rate returns to the moving average, a pin bar appears, indicating that short sellers have the upper hand, but short sellers still need to wait for the market to fall below the previous low price of 1.0520. 
• Flag-shaped consolidation structure: The exchange rate has fluctuated upward since October 4, and the overall price has shown a flag-shaped shock range. The 65 moving average successfully suppressed the further rebound of the exchange rate. Next, we will pay attention to whether today’s market can fall below the range. If the range is still effectively supported, the market will rebound and rise again. Otherwise, short opportunities will come. 

EUR/USD 1-hour Chart Analysis

• Stochastic Oscillator: The fast line is about to cross the slow line, suggesting that the exchange rate is about to fall into consolidation in the short term. 
• Moving average combination: The exchange rate fell below the 200-period moving average. Currently, the 33-period moving average and the 65-period moving average have not yet crossed the 200-period moving average. Theoretically, when the fast line crosses the slow line, the market may return to the short-term moving average group. 

Ultima Markets MT4 Pivot Indicator

• According to the pivot indicator in Ultima Markets MT4, the central price of the day is established at 1.06023, 
• Bullish Scenario: Bullish sentiment prevails above 1.06023, first target 1.06469, second target 1.07193; 
• Bearish Outlook: In a bearish scenario below 1.06023, first target 1.05299, second target 1.04851. 

Conclusion 

BOC Keeps Policy Rates Steady at 5% 

The Bank of Canada (BOC) leaves the overnight rate unchanged at 5% in its October meeting.  

The Bank continues quantitative tightening policies and expects slow growth paces to extend through 2023. However, it foresees a pickup by late 2024 and a more robust growth in 2025. In the latest projection, the BOC forecasts the Canadian economy to grow by 1.2% this year, 0.9% next year, and a more robust 2.5% in 2025. 

(Policy interest rate，BOC) 

Canada Inflation Levels Getting Under Control 

Canada’s CPI readings have been volatile in recent months: 2.8% in June, 4.0% in August, and 3.8% in September. In BOC’s latest projection, CPI is projected to average around 3.5% until the middle of next year. After that, it is expected to gradually decrease and reach 2% by 2025. However, in the near term, inflation is expected to be higher due to the impact of energy prices and the ongoing persistence of core inflation. 

Disclaimer  

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided. 

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the EURUSD for 26th October 2023. 

Key Takeaways 

• ECB will not raise interest rates: Today the European Central Bank announced its latest interest rate decision. In September, the ECB unexpectedly raised interest rates for the tenth consecutive time. But then it was hinted that this round of interest rate hikes is coming to an end and the ECB may not raise interest rates for the rest of this year. The market will focus on whether the ECB has additional forward guidance. 
• Euro depends on USD: Since the European Central Bank will “almost certainly” keep interest rates unchanged, the euro is more likely to be driven by the economy of the US. Tonight, the United States will announce the number of initial jobless claims last week and PCE data for the third quarter. 

Technical Analysis 

Daily Chart Insights 

• Stochastic Oscillator: The fast line of the indicator crossed below the slow line yesterday, suggesting that a bearish trend in the market is coming. 
• Price action: The exchange rate showed a bearish price action on Tuesday, and then the candle bar pulled back to the 5-day moving average and fell below Tuesday’s low, suggesting that bears have the upper hand. 
• Flag-shaped consolidation structure: The exchange rate has fluctuated upward since October 4, and the overall price has shown a flag-shaped range. Next, we will pay attention to whether price can fall below the range today. If the range is still effectively supported, the market will rebound and rise again. Otherwise, short opportunities will come. 

1-hour Chart Analysis 

• Stochastic Oscillator: The fast line is about to cross the slow line, suggesting that the exchange rate is about to fall into consolidation in the short term. 
• Moving average group: The exchange rate fell below the 200-period moving average. Currently, the 33-period moving average and the 65-period moving average have not yet crossed the 200-period moving average. Theoretically, when the fast line crosses the slow line, the market price may pull back to the short-term moving average group. 

Pivot Indicator 

• According to the pivot indicator in Ultima Markets MT4, the central price of the day is established at 1.05797, 
• Bullish Scenario: Bullish sentiment prevails above 1.05797, first target 1.05933, second target 1.06205; 
• Bearish Outlook: In a bearish scenario below  1.05797, first target 1.05526, second target 1.05383. 

Conclusion 

To navigate the complex world of trading successfully, it’s imperative to stay informed and make data-driven decisions. Ultima Markets remains dedicated to providing you with valuable insights to empower your financial journey. 

For personalized guidance tailored to your specific financial situation, please do not hesitate to contact Ultima Markets. 

Join Ultima Markets today and access a comprehensive trading ecosystem equipped with the tools and knowledge needed to thrive in the financial markets. 

Stay tuned for more updates and analyses from our team of experts at Ultima Markets. 

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Disclaimer   

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.