Dollar Eases as GDP Come Soft

• Dollar was pressured by the downbeat GDP reading, eye on today‘s PCE reading.

• Nasdaq closed lower on poor megavaps’ earnings reports, keenly awaiting earnings reports from Apple Inc and Amazon Inc for potential market direction.

• Gold remains robust ahead of the U.S. election.

Market Summary

The dollar faced pressure from the GDP reading released yesterday, which came in lower than market expectations. However, amidst prevailing risk-off sentiment, the dollar managed to find support above the $104.00 mark. Todays highly anticipated U.S. PCE reading, the Fed's preferred inflation gauge, is expected to provide crucial insights into upcoming monetary policy decisions and their implications for the dollar's strength.

On Wall Street, the Nasdaq was negatively impacted by disappointing earnings from Meta Platforms, alongside a slower earnings forecast for Microsoft's cloud business. As the tech-heavy index hovers near recent peak levels, traders are closely watching todays earnings reports from Apple Inc. and Amazon Inc., which are likely to influence the index's price action.

In the commodity market, gold rose nearly 0.5% in the last session, marking its fifth consecutive gain. The precious metal has attracted demand ahead of the upcoming U.S. election and is expected to continue its upward trend as the election date approaches. Meanwhile, oil prices received a boost from a decrease in U.S. crude inventories reported last night. Additionally, OPEC+ is reportedly delaying its planned full restoration of oil production in December, as the demand outlook for oil remains lackluster.

Current rate hike bets on 7th November Fed interest rate decision:

Source: CME Fedwatch Tool

0 bps (4.4%) VS -25 bps (95.6%)

Market Movements

DOLLAR_INDX, H4

The Dollar Index extended its pullback in the last session but found support just above the 104.00 level, indicating it remains on an uptrend trajectory. The dollar faced pressure from a lower-than-expected GDP reading, which weighed on sentiment. Market participants are now closely watching the U.S. PCE reading due today, which is expected to have a direct impact on the indexs performance. A break below the 104.00 mark could signal a bearish shift for the index, potentially paving the way for further declines if economic data continues to disappoint.

The dollar indexs bullish momentum is easing drastically, with the RSI dropping below the 50 level while the MACD edge is lower than the zero line. A break below the 104.00 mark shall be a bearish signal for the index.

Resistance level: 104.95, 105.55

Support level: 103.95, 103.20

XAU/USD, H4

Gold prices surged to a new high, touching the $2,790 mark for the first time, reflecting a bullish bias for the precious metal. The rise was primarily fueled by a softer dollar, weighed down by recent weaker U.S. economic indicators. With the U.S. election just a week away, market participants are seeking safe-haven assets like gold to navigate potential volatility. This election-driven sentiment, alongside existing geopolitical concerns and economic uncertainties, is expected to sustain upward momentum for gold in the near term, possibly pushing prices closer to the $2,800 mark.

Gold prices gained for the 3rd session this week after the gold found support at $2720 levels, suggesting a strong bullish signal for the gold. The RSI remains close to the overbought zone, while the MACD edged higher in the last session, suggesting the bullish momentum remains intact with the gold.

Resistance level: 2795.00, 2810.00

Support level: 2775.00, 2755.00

Nasdaq, H4

The Nasdaq struggled to sustain its upward momentum in the last session, closing approximately 100 points lower. This decline was largely influenced by disappointing earnings reports from both Meta Platforms and Microsoft, which dampened investor sentiment. Looking ahead, the earnings reports from Apple and Amazon, scheduled for release today, are anticipated to significantly affect the Nasdaq's performance, with traders keenly awaiting their results to gauge market direction.

Nasdaq failed to trade higher after the index broke above the ascending triangle pattern. The RSI is hovering close to the 50 level, but the MACD is edging lower, suggesting the bullish momentum is easing. A break below from 20300 shall be a bearish signal for the index.

Resistance level: 20575.00, 21075.00

Support level: 19705.00, 19120.00