FOREX: Dollar Downside Momentum Stalls, USDJPY Extends Post-NFP Bounce

The European Commission's Autumn economic projections see the inflation outlook up slightly from its earlier forecasts in the Spring. 

• Headline euro area inflation is now projected to decline from 2.1% in 2025 to 1.9% in 2026 and edge up again to 2.0% in 2027 (Spring forecast: 2.1% 2025, 1.7% 2026), although "on a quarterly basis, inflation is set to hover around the ECB’s 2% target throughout the forecast horizon," the Commission said.
• The forecasts assume that ETS2 will come into force in 2027, despite the Nov 5 decision of EU states to suspend the trading scheme for a year to 2028, a decision which the European Parliament has subsequently approved. ETS2 is estimated to lift consumer energy prices over the course of 2027 by around 3% in the euro area, with the ECB expecting it to add about 0.3pp to headline inflation in 2027 under actual current legislation.
• Driven by stronger-than-expected growth over recent quarters, the Commission also expects GDP growth of 1.3% in 2025, 1.2% in 2026, and 1.4% in 2027 (Spring forecast: 0.9% 2025, 1.4% 2026), noting that growth has proved resilient even after front-loading effects ahead of US tariffs effects have been taken into account.
• The forecasts have a cut-off date on all assumptions of October 27.
• Full forecast table below (source: EC)

A sell-off in WTI futures on Nov 12 strengthens a bearish theme. A continuation lower would pave the way for a move towards key support and the bear trigger at $55.96, the Oct 20 low. Clearance of this level would confirm a resumption of the downtrend. Note that it is still possible a bullish corrective cycle remains in play. Resistance to watch is $62.59, the Oct 24 high. Clearance of this hurdle would signal scope for a stronger correction. Gold is trading below last week’s high. The downleg between Oct 20 and 28, appears to have been a correction and has allowed an overbought condition to unwind. Recent gains suggest that correction is over. Key support lies at the 50-day EMA, at $3927.5. Clearance of this EMA would signal scope for a deeper retracement. For bulls, a resumption of gains would pave the way for a test of $4381.5, the Oct 20 high and bull trigger.

• WTI Crude down $0.43 or -0.72% at $59.67
• Natural Gas down $0.08 or -1.71% at $4.49
• Gold spot down $0.54 or -0.01% at $4083.58
• Copper down $2.05 or -0.4% at $504.1
• Silver up $0.47 or +0.93% at $51.0467
• Platinum up $5.44 or +0.35% at $1550.71

A medium-term bull trend in Eurostoxx 50 futures remains intact and last week’s gains reinforce bullish conditions. However, the latest pullback suggests the start of a corrective phase. Price has traded through the 20-day EMA. Attention is on support at the 50-day EMA, at 5604.85, and 5599.00, the base of a bull channel drawn from the Aug 1 low. These two price points represent key support. A break would highlight a stronger reversal. The trend condition in S&P E-Minis remains bullish and the latest selloff appears corrective - for now. Support at the 50-day EMA, at 6730.32, has been pierced, however, price is once again trading above the average. The  next key support to watch is 6655.50, the Nov 7 low. Friday’s price pattern is a doji candle - a reversal signal. Initial firm resistance to watch is 6900.50, the Nov 12 high. A breach of this level would be bullish.

• Japan's NIKKEI closed lower by 52.62 pts or -0.1% at 50323.91 and the TOPIX ended 12.28 pts lower or -0.37% at 3347.53.
• Elsewhere, in China the SHANGHAI closed lower by 18.457 pts or -0.46% at 3972.035 and the HANG SENG ended 188.18 pts lower or -0.71% at 26384.28.
• Across Europe, Germany's DAX trades lower by 30.1 pts or -0.13% at 23846.65, FTSE 100 lower by 8.55 pts or -0.09% at 9689.9, CAC 40 down 7.69 pts or -0.09% at 8162.4 and Euro Stoxx 50 down 16.99 pts or -0.3% at 5676.78.
• Dow Jones mini up 63 pts or +0.13% at 47289, S&P 500 mini up 33 pts or +0.49% at 6787.75, NASDAQ mini up 192.5 pts or +0.77% at 25285.5.