China slips back into deflation

China’s deflation pressures worsened in October, as consumer prices dipped back below zero and producer cost declines deepened, adding to expectations that the economy needs more stimulus to shore up growth.

Consumer prices fell 0.2% last month after hovering near zero in the previous two months, according to data from the National Bureau of Statistics, Thursday, lower than the median forecast in a Bloomberg survey of economists. Producer prices fell for a 13th straight month, dropping 2.6%.

US 10-year yield below 4.5%

Over the past few days, the US 10-year yield tumbled by almost 11% and closed yesterday’s trading below 4.5% for the first time since September.

The time and price method suggests that the upside trend is over. However, it needs a weekly close below 4.5%. If so, this could be the first bearish signal since March.

The next solid support stands at 4.32%, while a break below that level may lead to a deeper decline possibly towards 4.08%.

Fed Fund Futures keeps fading

Two Federal Reserve officials emphasized that bringing inflation fully down to the central bank’s 2% goal is their main focus, amid signs that the economy and labor market are holding up.

Most traders believe that the Fed’s tightening cycle is over. The Fed Fund Futures continued to decline further.

December’s rate hike probability is now below 10, while January’s probability dropped to 17% down from 25% a few days ago.

DXY failed once again

For the 2^nd day in a row, the US Dollar Index failed to break above its resistance area which stands between 105.70 and 106.0. The index showed another reversal candle on the daily chart, which confirms that any upside retracement is likely to remain limited below that area.

The RSI indicator remains below the 50 key level and flat at the same time, which keeps the bearish outlook unchanged.

The next support area stands at 105.0, while a break below that support would clear the way towards our main target which stands at 104.70 followed by 104.40.

Gold reached the first target

Gold downside pressure continued during yesterday’s trading and reached $1950.

Despite the ongoing tension in the Middle East, it seems that investors are not concerned

A break below the $1950 support area would clear the way for a deeper decline towards the next support which stands at $1940 followed by $1930.

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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