Action Insight Daily Report 10-15-24

Dollar Gains Amid Mixed Sentiment, Nikkei Soars Follow US, While China Struggles

Risk sentiment in Asia was mixed today. Japan's Nikkei 225 index extended its rally and broke above the 40k mark for the first time in three months. This momentum firstly follows another record close on Wall Street overnight. Secondly, contributing to the optimism are growing expectations that BoJ may hold off on implementing another rate hike by the end of the year. The latest Reuters poll indicates that a slim majority—25 out of 49 economists surveyed—expect BoJ to maintain its current policy rate at 0.25% through December. Nevertheless, tightening is going to continue, with 87% of respondents, or 39 out of 45, anticipate a rate increase to 0.50% by the end of Q1 next year.

In contrast, equities in Hong Kong and mainland China are struggling. Unconfirmed media reports suggest that China might raise an additional CNY 6 trillion (approximately USD 820 billion) through treasury bonds over the next three years to bolster its slowing economy with fiscal stimulus. The proposed funds are intended to assist local governments in resolving off-the-books debts. However, the absence of official confirmation has left investors uneasy. Investors are clearly dissatisfied with the lack of concrete information, causing hesitation in committing to positions in Chinese assets....

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GBP/USD Daily Outlook

Daily Pivots: (S1) 1.3035; (P) 1.3054; (R1) 1.3077; More...

Outlook in GBP/USD remains unchanged and intraday bias stays neutral first. Strong support should be seen from 1.3000 cluster support (38.2% retracement of 1.2298 to 1.3433 at 1.2999) to complete the correction from 1.3433. On the upside, break of 1.3174 minor resistance will turn bias back to the upside for retesting 1.3433. However, sustained break of 1.3000 will carry larger bearish implications and target 61.8% retracement at 1.2732.

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EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY

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