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Treasury Yields Move Higher, Dollar Rally Weighs On Gold Prices

1. Forex Market Insight  


The dollar index rose by 0.18% to 93.97 yesterday, with the 10-year U.S. Treasury yield rising up by 5 basis points to 1.53%.

Traders remained cautious ahead of a key jobs report scheduled this weekend. Additionally, the rising energy prices are also contributing to inflation worries. Together with this, the report could provide clues to the Fed’s next move.

Similarly, Euro’s trend is likely to remain largely moderate for the rest of the week as the markets await the latest data from the U.S. job market, which could help provide clues as to whether the Fed will begin tapering its asset purchases before the end of the year.

Technical Analysis: 

(EUR/USD 1-hour chart) 

Execution Insight: 

Today’s attention is paid to the 1.1554-line of support. If the euro breaks below the 1.1554-line, it will open up a further downside potential. At that time, pay attention to the 1.1501-line of support. Meanwhile, the top pays attention to the suppression of the 1.1622 and 1.1663 positions. Once it breaks through the 1.1663-line, it will open up a further upside potential.

GBP Intraday Trend Analysis 

Fundamental Analysis: 

Similar to other countries, with the end of the Covid-19 crisis, the UK has been affected by the rise in commodity prices, especially energy prices. Not only that, the Brexit has also caused supply problems, which has put pressure on the labor market.

During this interval, companies continue to face serious hiring difficulties and employment rates are declining. When calculating the annual change, it is difficult to interpret the data on wages, productivity and unit labor costs, taking into account the shock in the second quarter of 2020 and the impact of this shock on the second quarter of 2021.

Technical Analysis: 

(GBP/USD 1-hour chart) 

Execution Insight: 

The pound pays attention to the middle Bollinger Band track today. Once the strength falls below the middle Bollinger Band track, it will open up a further downside potential. At that time, pay attention to the support at 1.3574 and 1.3522 in turn.

2. Precious Metals Market Insight



Fundamental Analysis: 

Gold prices fell slightly yesterday as U.S. data boosted optimistic expectations for an economic recovery, leading to a higher U.S. Treasury yield. The U.S. service sector expanded faster than expected in September, which may prompt the Federal Reserve to announce a reduction in bond purchases as planned.

The 10-year U.S. treasury yield rose to 1.53% above, while the dollar rallied. Thus, depressing the gold’s trend. During the day, focus on the U.S. September ADP employment figures. The data is expected to be better than the previous value, which will be a bad sign for gold prices.

Technical Analysis: 

(Gold 1-hour chart) 

Trading Strategies: 

Today, the gold pays attention to the direction of the breakthrough in the 1751 to 1768 range. If it breaks through 1768 upwards, it will open up a further upside space. At that time, pay attention to the suppression of 1782 and 1801. If it falls below the 1751-line, it will open up further downside space. At that time, pay attention to the strength of support at 1740 and 1724.

3. Commodities Market Insight 

WTI Crude Oil 

Fundamental Analysis: 

Oil prices hovered at $79.08 per barrel yesterday. The API data release in the morning showed a 951,000-barrel increase in crude oil inventories; oil prices climbed, with U.S. oil continuing to rise from a seven-year high approaching the 80-mark after major global oil producers announced their decision to keep a cap on crude oil supplies. Meanwhile, the soaring U.S. natural gas prices provided the impetus for higher oil prices.

Technical Analysis: 

(Crude oil 1-hour chart) 

Trading Strategies: 

Today, oil prices continue to follow the bullish trend. The bottom line focuses on the support of the 75.69 and 76.89 positions, while the top focuses on the suppression of the 80-round mark.

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