On October 26, ATFX commentary: Gold broke below the $4,000 mark, opening up further downside room. Although the latest quote has climbed back above the $4,000 level, the downtrend remains intact, and the $3,975 support level is likely to be breached. The main bearish factor for gold is the global central bank rate hike cycle, as gold's comparative advantage is being eroded. US crude oil rose above the $100 mark, surging to $103.24 before pulling back significantly, with heavy selling pressure limiting further gains, and $103.24 could become a near-term peak. Since the outbreak of the US-Iran conflict, US crude oil has almost always experienced sharp pullbacks after breaking above the $100 mark, so investors are advised not to blindly take a bullish view on future developments. Throughout October, EURUSD has been oscillating continuously without choosing a breakout direction. This Thursday will bring the Federal Reserve and European Central Bank interest rate decisions. Although the market expects benchmark rates to remain unchanged, market nervousness could push EURUSD to break in one direction, warranting close attention.
ATFX commentary: Gold's bearish trend on the four-hour chart is clearer than on the H1 timeframe, with no nearby resistance levels above and the $3,975 support below actually representing last week's low. This week is a super central bank week. Gold, as a physical safe-haven asset that generates no interest, sees its holding value compressed against the backdrop of central banks raising rates across the board. The trend-following decline in gold (not excluding short-to-medium-term rebounds) is expected to persist for an extended period, until the global rate hike cycle ends and shifts into a rate cut cycle. Crude oil's pullback on the H1 timeframe is a relatively minor decline at the H4 level, almost certainly not disrupting the established bullish trend. The uptrend since October 6 has followed a pattern of "rise $5, fall $3," which is known as an extended wave in Elliott Wave Theory. There is no clear resistance level at the H4 level, and $103.24 is merely a near-term peak with a high probability of being breached. EURUSD maintains an oscillating pattern at the H4 level without choosing a breakout direction. Given the relatively clear prior downtrend, from a purely technical perspective, the probability of a downward breakout in the future is higher.
ATFX commentary: Gold's daily chart shows a smooth downtrend, with no clear support or resistance levels visible in the short term. However, looking at a longer cycle, this year's June low of $3,943 can be viewed as a psychological threshold, and choppy price action may occur when the market price falls to that level. US crude oil shares the same issue as gold: no clear resistance or support visible in the short-to-medium term, but over a longer cycle, previous important levels (close to the current market price) can be identified. On September 15, WTI touched a near-term high of $102.08. Although that was some time ago, it is close to the latest market price of $100.76 and can be regarded as a psychological threshold. EURUSD's hourly-level oscillation cycle has been significantly compressed, making the bearish trend on the daily chart more pronounced. This week, the Federal Reserve and European Central Bank are expected to hold steady, but both have already cut rates by 25 basis points in recent months, and this pause appears more like observing how the economy responds after rate changes. The probability of a Federal Reserve rate hike in December remains high, and the US dollar index's strong cycle is still continuing. The US dollar index's latest reading is 101.76, still leaving considerable room from its all-time high of 114.79, and EURUSD is expected to continue its decline after a rebound (or consolidation).
ATFX Risk Disclosure, Disclaimer, and Special Statement: Markets carry risks, and investing requires caution. The above content represents only the analyst's personal views and does not constitute any trading recommendation. Please do not treat this report as your sole reference. The analyst's views may change at different times, and updated content will not be notified separately.
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