FTSE 100 range trades, GBP/USD hits six-week high as gold hovers above 2-year low

Macro Update

Asian markets recover ahead of Apple earnings: South Korean shares climbed 2.6% after losing 16% in October, while Japan’s Nikkei added 0.3% and China’s CSI 300 rose 1.3% on reports that regulators would meet financial institutions to discuss support for capital markets. S&P 500 futures gained 0.5% and Nasdaq futures rose 0.9%, following the Nasdaq’s near 7% October decline, its worst month since April 2025. Apple is expected to report quarterly earnings per share of $2 on revenue of $113bn.

AI investment boom raises questions over future growth: Goldman Sachs expects hyperscaler capital expenditure to nearly double to $800bn this year and reach $1.2tn in 2027, while forecasting S&P 500 earnings growth to slow from almost 30% in 2026 to 18% next year. Intel’s near 29% plunge on Friday heightened pressure on other chipmakers, while Tuesday’s US midterm elections added uncertainty, with a Democratic victory in either chamber potentially creating obstacles for data centre development.

Oil prices slide on hopes of Iran peace deal: Brent crude dropped 3.3% to $109.70 a barrel, while US crude fell 3.4% to $100.58 as Iranian and Qatari officials held a third consecutive day of talks in Doha aimed at ending the US-Israeli war on Iran. The pullback followed October’s 13.6% surge, with tanker attacks in the Gulf continuing and OPEC+ leaving December production targets unchanged.

Gold rebounds after falling below $4,000: Bullion rose 0.9% to $3,911 an ounce as easing oil prices helped temper inflation concerns, recovering slightly after Friday’s 3.5% plunge took it below $4,000 for the first time since October 2025. Silver also advanced, gaining 1.8% to $49.97 an ounce.

Markets scale back expectations for Fed tightening: Futures indicated a 72% probability of a quarter-point Federal Reserve rate increase in December, although total tightening priced in had fallen to 55 basis points from more than 70 basis points a month earlier. The 10-year Treasury yield held at 4.931%, well below October’s peak of 5.3645%, while investors anticipated rate increases from the Reserve Bank of Australia, Bank of England and Riksbank this week.

Euro remains under pressure as currencies await US vote: The euro hovered near a 17-month low of $1.1182 after Fitch revised France’s outlook to negative, while the dollar index slipped 0.15% to 101.83 and the yen traded at 157.73 per dollar. Bitcoin edged 0.6% higher to $78,263 as Binance recorded $3.64bn in withdrawals after restoring services following a record $6.3bn hack attributed to North Korea.

FTSE 100 sideways trades

The FTSE 100 continues to trade around its 55-day simple moving average (SMA) at 10,715 but remains short-term bullish while it stays above its 23 October low at 10,634.

In case of a rise above the 30 October high at 10,792 being witnessed, the mid-September high at 10,837 would represent the next upside target ahead of the mid-October peak at 10,903.

In case of a fall through the 23 October low at 10,634 occurring, the 10 September low at 10,580 may be revisited. Further down meanders the 200-day simple moving average (SMA) at 10,534.

Short-term outlook: bullish while above the 23 October low at 10,634

Medium-term outlook: neutral with a bullish undertone while above the 10,113 May low but below the 10,903 mid-October high

FTSE 100 daily candlestick chart

GBP/USD hits six-week high

GBP/USD continues its advance and is for the first time in six weeks trading back above its 200-day simple moving average (SMA) at $1.3425 while heading for its early September low at $1.3475. Together with the early August high at $1.3506 and the 25 May peak at $1.3509 it may act as minor resistance. If not, the mid-July high at $1.3558 may be reached.

Minor support may be spotted around the 22 October high at $1.3419 and at the 18 September low at $1.3336.

Short-term outlook: bullish while above the late October low at $1.3273

Medium-term outlook: bullish, targeting the $1.3676 August peak while the $1.3273 late October low underpins

GBP/USD daily candlestick chart

Gold trades in two-year lows

Spot gold slid to $3,870.32 at the end of October - a level last traded in early October 2025 - and is trying to hold above this level at present. If fallen through, the technical picture would likely deteriorate further still with the $3,500 region possibly being revisited.

While last week's trough at $3,870.32 holds, a minor recovery towards the June-to-July lows at $3,942.10-to-$3,996.06 may ensue. Slightly further up the August-to-November downtrend line may be spotted at $4060.00.

Short-term outlook: bearish while below the 28 October high at $4,082.82

Medium-term outlook: bearish while below the 28 October high at $4,082.82

Gold daily candlestick chart