In This Issue

• FX Recap: Dollar rises on strong payrolls, RBA and BoE hike, AUD weakest, oil falls on Iran hopes

• EUR/USD: Volatility at multi-month lows, momentum lower, moving averages stacked

• USD/JPY: Unchanged on the week, volatility compressed, moving averages flat

• Gold: Bullish reversal, momentum out of oversold, resistance ahead

• Crude: Down 19% from the October 30 high, first close below the 50-day

• BTC: Below the 100-day, 200-day in focus

• Week Ahead: US CPI Tuesday, UK GDP Thursday, US PPI Friday

FX Recap

The dollar rose on the week, with the DXY gaining 0.41% to 102.30. October payrolls rose 165,000 against about 65,000 expected, and unemployment fell to 4.1%. Markets now price about an 80% chance of a Fed hike in December.

Democrats are projected to control both chambers of Congress, and the dollar dipped on Wednesday, with the DXY hitting a weekly low of 101.10. The jobs report erased the move.

The RBA raised rates 25bp to 4.85% on a 6–3 vote, and Bullock said it’s probably good to wait and assess the data. AUD fell below 0.70 and ended the week down about 2.4% near 0.6866, the weakest of the majors.

The BoE raised Bank Rate to 4.00% on an 8–1 vote, its first hike since 2023. Sterling was little changed on the decision. GBP/USD touched about 1.35 and ended the week at 1.3350. EUR/USD ended near 1.114, and USD/JPY rose about 0.6% to 158.5.

Oil fell sharply on hopes of de-escalation with Iran. Tech stocks sold off on Thursday, and the S&P 500 fell about 2.7% on the week.

The dollar eased on Monday as Iran fears cooled, with US CPI due Tuesday.

EUR/USD

EUR/USD is mostly unchanged from a week ago. The high to low range was about 1.2% on the week. Volatility is holding at multi-month lows, as measured by Bollinger Bandwidth. Momentum crossed lower on Friday’s move. The key moving averages are trending lower and stacked (50-day under the 100-day and 100-day under the 200-day), so rallies may be limited.

Key Levels

Resistance

• 1.1259 upper Bollinger Band

• 1.1335 50-day moving average and 38.2% Fibonacci

• 1.1412 50% Fibonacci and 100-day moving average

Support

• 1.1128 lower Bollinger Band

• 1.1104 October 29 low

USD/JPY

USD/JPY is unchanged from a week ago, at 157.96. The total high to low move was 1.1%. Volatility is also sitting at multi-month lows. Momentum crossed down from overbought, but with ranges this small it doesn’t give much bias. The moving averages are all near each other and flat: directionless, stuck.

Key Levels

Resistance

• 158.68 200-day moving average

• 158.93 upper Bollinger Band

• 159.06 100-day moving average

Support

• 157.29 50-day moving average

• 156.94 lower Bollinger Band

Gold (GCZ26)

Gold had a bullish reversal on November 2, closing back above the lower Bollinger Band after making a new low in the prior session. The rally continued through Monday. Momentum crossed higher and moved out of oversold after the bullish reversal, and it is now approaching overbought but still pointing higher. Rallies may struggle as we move into overbought and approach the confluence of resistance marked by the 50-day and 100-day moving averages and the upper Bollinger Band.

Key Levels

Resistance

• 4,220.1 50-day moving average

• 4,245.3 100-day moving average

• 4,248.9 upper Bollinger Band

Support

• 4,080.0 20-day moving average

• 4,035.1 Friday’s low

• 3,908.4 lower Bollinger Band

Crude (CLZ26)

The crude selloff that started last Monday continued on Monday, with crude down approximately 19% from the October 30 high to Monday’s low. Last Wednesday was the first close below the 50-day moving average in several weeks. It bounced to retest the 50-day on Friday before getting sold off again to a new low for the move on Monday at 85.02.

Momentum is starting to turn, but the cooling geopolitical environment with Iran can keep pressure on crude.

Key Levels

Resistance

• 87.16 lower Bollinger Band

• 92.36 50-day moving average

• 96.88 20-day moving average

Support

• 85.02 Monday’s low

• 83.84 100-day moving average

• 78.58 200-day moving average

BTC

BTC broke and closed below the 100-day moving average last week for the first time since mid-August. The average comes in at 77,413 as of Monday. Momentum briefly moved out of oversold last week but is back in oversold territory on the break of the 100-day. It will be key to watch what happens at the 200-day moving average at 73,153, which we also haven’t seen a close below since it broke above on August 19.

Key Levels

Resistance

• 77,413 100-day moving average

• 78,578 20-day moving average

• 81,058 last week’s high

Support

• 73,514 lower Bollinger Band

• 73,153 200-day moving average

Week Ahead

US October CPI on Tuesday is the main event, with a December Fed hike priced at about 80%. UK Q3 GDP is Thursday, following the BoE hike, and US PPI is Friday. The US Treasury market is closed Wednesday for Veterans Day.

Meridian Compass is brought to you by Mark Schaefer, a portfolio manager specializing in systematic global macro and FX strategies, with experience across institutional trading platforms, major banks, and hedge funds.

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This newsletter is for educational purposes only and does not constitute investment advice, trading recommendations, or solicitation to buy or sell any financial instruments. All content represents the author's personal opinions and experiences and should not be construed as professional financial advice.

Trading involves substantial risk of loss and is not suitable for all investors. Past performance does not guarantee future results. All trading examples and performance figures are for illustrative purposes only and may not reflect typical results.

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