Week ahead forecast Nov 6th-12th : Hang Seng, AUD/USD and Gold

Last week, the global stocks market recorded one of their best weeks of the year, thanks to the Federal Reserve's dovish stance combined with weaker-than-expected US job data, fueling a strong rally across the board. During the week, the S&P 500 surged by 5.9%, the Nasdaq Composite jumped 6.6%, and the Dow Jones index rallied by 5%. In the APAC region, the ASX gained 1.4%, the Hang Seng Index was up by 3.61%, and the Nikkei 225 index increased by 1.1%.

The week ahead is poised to bring a reality check to the financial world as US Central bank officers, including Chair Jeremy Powell and the ECB President, will deliver their first speeches following recent central meetings. Very likely, there’s will be some testing moments to assess whether the market had been overly optimistic about the central bank's path ahead.

Furthermore, the Reserve Bank of Australia is expected to increase its interest rate by another 25 basis points, to 4.35%, marking the first interest rate hike since May and the first significant move under the recently appointed Governor, Ms. Bullock's leadership.

Beyond the central bank focus, the primary focus will shift to China's inflation gauge. China's Consumer Price Index (CPI) data, scheduled for release on Thursday, is expected to reveal that Chinese consumer prices have not changed from the same period last year, a concerning sign to suggests China's deflationary pressures are persisting. Concurrently, China's Producer Price Index (PPI) is anticipated to decline for the 13th consecutive month. These closely-watched indicators are likely to reinforce the notion that "insufficient domestic demand" remains a significant challenge for China's lackluster economy.
Considering all of the above, the following markets are set to be closely watched in the days ahead.

AUD/USD

Signs of upward momentum for AUD/USD have emerged since the end of October, following Australia’s hotter-than-expected inflation data, which has feed into spiking expectations of a rate hike by the RBA in its November meeting.

After two weeks of strong gains, the AUD/USD is now trading at its highest level since September, with its next target set on the 0.6570/0.6580 range, where the 200-day moving average (MA) is currently situated. A breakout above this crucial line will reinforce the view of a bullish reversal for the Aussie currency. In case of a near-term pullback, support can be sought from the September peak at 0.6497 and the 50-day MA at 0.6478, providing a secondary layer of support.

Hang Seng

While the Hang Seng Index has managed to make the biggest improvement since July in the past week, it has not yet been able to close above the October highs. Therefore, at this moment, it is still premature to claim a bullish reversal for Hong Kong stocks.

In the days ahead, a strong CPI print from China could further support Hong Kong stocks, potentially allowing them to challenge the 50-day moving average around 18,200. On the flip side, if concerns in China's economy arise due to the new releases, momentum may shift to the downside, pushing prices below the August lows at 17,600/17,700.

Gold

The price of gold rose on Thursday and Friday, driven by a weaker US dollar, but once again, it stalled at the doorstep of $2,000 mark. As the new week begins, the price of the precious metal is hovering around the $1,990 level.

In the meantime, the 20-day simple moving average (SMA) is expected to serve as a crucial support in the days ahead, situated in the range of $1,975 to $1,985. A breach below this level could be viewed as a catalyst for renewed downside momentum, with a potential test of the August peak at $1,970.