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GBPUSD Bounces off local Support

In recent days GBPUSD moved further away from six-month high of $1.2355 reached earlier this month as recession fears sparked demand for safe haven assets including US dollar. Also the outlook for the sterling remains clouded by fears of a domestic recession. BOE Governor Andrew Bailey has been warning markets that tightening expectations is overdone with the UK toppling into a two-year recession. Nevertheless today we can observe some dollar weakness which enables the GBPUSD pair to bounce off the local support at 1.2150. Nevertheless, the main sentiment remains bearish, therefore a move towards 1.20 level or even key support 1.1865 cannot be ruled out.

USDIDX struggles to break above key resistance at 105.30 which is marked with previous price reactions, 200 SMA (red line) and 23.6% Fibonacci retracement of the upward wave launched in May 2021.

 

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EURUSD - The EU economy shows slight growth

Thus, according to November data, the growth of Q3 gross domestic product (GDP) amounted to 0.3%, which exceeded analysts' expectations of 0.2%, and the annual rate slowed to 2.3% from 4.2% earlier, according to preliminary estimates at 2.1%, helped by an increase in employment by 0.3% from an estimated 0.2%. Thus, employment in the region increases by 1.8% YoY and leads to an increase in the overall level of the indicator to 164.499K from 164.475K a quarter earlier.

On the daily chart, the trading instrument continues its corrective growth and is confidently holding above the resistance line of the local ascending corridor, and the technical indicators maintain a stable upward signal.

Resistance levels: 1.0590, 1.0780 | Support levels: 1.0440, 1.0240​

 

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GBPUSD needs positive momentum

The GBPUSD pair shows some slight bearish bias now to move around 1.2200 level, affected by stochastic negativity, while the EMA50 continues to support the price from below, to keep the chances valid to continue the expected bullish trend on the intraday and short term basis, which its next target located at 1.2345. Note that breaking 1.2130 will stop the expected rise and press on the price to start bearish correction that its targets begin by visiting 1.1925 areas.

The expected trading range for today is between 1.2120 support and 1.2290 resistance, and the expected trend for today is Bullish.​

 

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Chart of the day - US100

US indices had another downbeat session in a row yesterday but the scale of declines was smaller than in previous two days when all major Wall Street benchmarks dropped more than 1%. Tech shares have once again lagged the most with Nasdaq index dropping 0.51% and Nasdaq-100 (US100) moving 0.45% lower.

Taking a look at the US100 chart at D1 interval, we can see that while the index saw some weakness in recent days and dropped 5% off December 1st peak, bearish momentum eased after prier reached support zone ranging above 11,500 pts handle. Downward move was halted at the 50-session moving average (green line) yesterday and today's retest of the aforementioned moving average also turned out to be a failure. Lower wicks of today's and yesterday's daily candlestick suggest that there is a strong bull camp in the 11,500 pts area and it is also a good place for a rebound from a technical point of few. However, one cannot rule out that we will have to wait until next week's Fed decision for the index to see a bigger move in either direction. In case bears regain control and push the index below the 11,500 pts price zone, the next support to watch can be found at the lower limit of the Overbalance structure (11,075 pts). On the other hand, should the index rebound from current levels, the 12,100 pts resistance zone, marked with recent local highs, will be a level to watch.​

 

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BTCUSD - the decision of the US Federal Reserve will determine the dynamics of "digital gold"

Last week, the BTCUSD pair fell to the 16700 area but then won back the losses and rose to 17200, where it has been trading over the past few sessions.

The cryptocurrency market remains uncertain: the bankruptcy of the FTX exchange is putting pressure on it, but monetary factors prevent a significant decrease in quotes. The liquidation of several large digital projects at once in six months caused serious damage to the sector, expressed in the loss of confidence in it and a decrease in investment. Thus, according to a survey of American citizens conducted by the CNBC channel, by the end of the year, the number of respondents who had a positive attitude towards digital assets adjusted to 8.0% from 19.0%, and after the Terraform and FTX bankruptcies, the number of respondents who were strongly negative about cryptocurrencies, rose from 25.0% to 43.0%. The situation with FTX did not go unnoticed by the authorities, which creates the possibility of tightening control over the activities of such sites, restraining the activity of its participants. State regulators are already checking messages for unfair advertising, and the US Securities and Exchange Commission (SEC) has required national businesses to publicly disclose the ownership of digital assets and report transactions with cryptocurrency market participants.

However, the negative fundamentals did not contribute to a sharp downward correction, as investors hope that the "hawkish" rhetoric of the US Fed will soften in the face of an emerging slowdown in price growth, which may cause the dollar to weaken against its main competitors. This week, analysts expect two major events – the publication of November inflation data and a meeting of the US regulator: if the consumer price index declines again, a decrease in interest rate growth to 50 basis points will become inevitable, and in the future, a short-term break in tightening of the monetary policy will become possible.

The trading instrument is near the resistance zone 17500 – 17830 (Murrey [6/8], Fibonacci correction 23.6%), the breakout of which will give the prospect of further growth to 19100 (Fibonacci correction 38.2%), 20000 (Murrey [8/8], Fibonacci retracement 50.0%). After the breakdown of the middle line of Bollinger bands around 16800, the decline may resume to 15700 (the area of November lows), 15000 (Murrey [4/8]), and 13750 (Murrey [3/8]).

Technical indicators signal a high probability of correction: Bollinger Bands and Stochastic are reversing upwards, and MACD is decreasing in the negative zone.

Resistance levels: 17830, 19100, 20000 | Support levels: 16800, 15700, 15000, 13750​

 

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NZDUSD leans on the channel’s support

The NZDUSD pair faced temporary negative pressure to test the bullish channel’s support line, starting to rise now, to keep the main bullish trend valid, waiting to test 0.6467 as a first station, noting that breaching this level will extend the bullish wave to reach 0.6530. Therefore, we will continue to suggest the bullish trend for the upcoming period conditioned by the price stability above 0.6375 and 0.6345 levels.

The expected trading range for today is between 0.6345 support and 0.6480 resistance, and the expected trend for today is Bullish.​

 

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USDJPY attempts to recover

The USDJPY pair shows positive trades by today’s open to attempt to breach 136.50 level, to hint the attempt to recover in the upcoming sessions, but we notice that the technical indicators provide negative signals that hinder the positive attempts, to face contradiction between the technical factors that makes us prefer to stay aside until the price confirms its situation according to the mentioned level.

Note that holding above 136.50 will lead the price to achieve intraday gains that target testing 138.25 areas mainly, while trading below it again will reactivate the negative scenario that its targets begin at 135.25 and extend to 134.25.

The expected trading range for today is between 136.00 support and 137.80 resistance, and the expected trend for today is Neutral.​

 

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USDCAD tests the resistance

The USDCAD pair traded positively on last Friday to test the key resistance 1.3680, keeping its stability below it until now, to keep the bearish trend scenario valid for the upcoming period, supported by stochastic loss to the positive momentum, waiting to head towards 1.3500 mainly. On the other hand, we should note that breaching 1.3680 will push the price to turn to rise and achieve gains that start at 1.38.

The expected trading range for today is between 1.3580 support and 1.3720 resistance, and the expected trend for today is Bearish.​

 

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Chart of the day - NATGAS

Beginning of the week on the markets has been rather calm so far. Indices from Asia-Pacific moved lower but scale of declines was moderate. Similar picture can be seen at the beginning of the European cash session. However, there is one market that is seeing extraordinary moves and this is US natural gas (NATGAS). NATGAS launched a new week with a massive bullish price gap and is now trading almost 9%, after trimming some gains. New forecasts pointing to colder weather in the United States in the days ahead are to blame. Price tested 7 resistance zone, marked with 61.8% retracement of the recent major downward move, at the start of trading but has failed to break above. A lot will now depend on whether bulls make another attempt and whether they succeed. A break above would brighten the outlook for buyers and could herald a move towards recent highs. On the other hand, it should be noted that 7 is a good technical spot for reversal and move back towards price zone ranging between 6.30 mark and 38.2% retracement.

 

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USDCHF attempts positively

The USDCHF pair trades positively by today’s open to attempt to breach 0.9355 level, but we will depend on the last daily close below this level to keep our bearish overview, which targets 0.93 followed by 0.9240 levels as next main stations. Stochastic loses its positive momentum clearly to support the expected decline, besides the negative pressure formed by the EMA50, taking into consideration that consolidating above 0.9355 will stop the negative scenario and lead the price to start new recovery attempts.

The expected trading range for today is between 0.9280 support and 0.9420 resistance, and the expected trend for today is Bearish.​

 

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EURUSD Technical Analysis

The EURUSD pair returns to test the bullish channel’s support line, and we need to get positive motive that assists to push the price to resume the main bullish trend within the mentioned channel, which targets 1.0600 followed by 1.0745 levels as next main stations. Until now, we continue to suggest the bullish trend that gets continuous support by the EMA50 conditioned by the price stability above 1.0515, noting that breaking this level will stop the positive scenario and cause key turn to the trend to the downside.

The expected trading range for today is between 1.0460 support and 1.0630 resistance, and the expected trend for today is Bullish.​

 

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Gold price tests the moving average

Gold price provided negative trades yesterday to start testing the EMA50 that forms minor support now at 1780, and the price needs to break this level to rally towards our waited negative target at 1764.4, noting that there are potential chances to provide additional negative trades, as we witness signs of double top pattern that might push the price to surpass the targeted level and head towards 1736.15 as a next negative target.

Therefore, we will continue to suggest the bearish trend for the upcoming period unless breaching 1795 and holding above it. The expected trading range for today is between 1760 support and 1795 resistance, and the expected trend for today is Bearish.​

 

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Crude oil price begins bullish correction

Crude oil price keeps rising to breach the bearish channel’s resistance by today’s open and settles above it, to start bullish correction for the entire decline that started from 92.9 areas, on its way to test 75.63 as a first positive station.

Therefore, we expect to witness more rise in the upcoming sessions, and breaching the mentioned level will extend the bullish wave to reach 78.93 areas, while breaking 73.65 represents negative factor that will stop the correctional bullish trend and press on the price to decline again.

The expected trading range for today is between 72.50 support and 76 resistance, and the expected trend for today is Bullish.​

 

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USDCHF - Quotes are holding in a downtrend​

The Swiss State Secretariat for Economic Affairs (SECO) is to release its traditional economic forecasts today. Still, investors expect them to be neutral, with third-quarter data showing a rise of 0.2% after rising by 0.1% earlier, indicating restrained dynamics, unable to influence the national currency. First, the gross domestic product (GDP) increase is curtailed by a record drop in consumer sentiment below –47.0 points for the first time since 1972. According to the latest poll, citizens do not expect improvements anytime soon and are reluctant to make large purchases amid unprecedented inflation and an uncertain outlook.

On the daily chart of the asset, the trading instrument continues its global decline, completing the formation of the local Triangle pattern. Technical indicators maintain a stable sell signal.

Resistance levels: 0.9410, 0.9550 | Support levels: 0.9310, 0.9150​

 

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Chart of the day - GBPUSD​

GBPUSD pair pulled back slightly today as traders digested latest economic data from Great Britain. Yesterday’s UK jobs report showed the unemployment rate rose slightly to 3.7% in the August-to-October period, while average earnings rose by a stronger-than-expected 6.1%, however it also did indicate a slowdown in hiring as businesses brace for a difficult start of 2023. Monday's data had shown the UK economy grew more than anticipated in October, however UK Chancellor Hunt warned that the situation could get worse before it gets better. Today's figures showed that UK inflation fell more than expected in November, cementing expectations of a 50 bps move from BoE tomorrow. Also comments from Governor Bailey may provide more details as to the way forward and cause some market movements on Thursday.

Of course the pair may face a spike in volatility in the evening, following Fed interest rate decision. The US central bank is expected to moderate its aggressive tightening campaign but point to a higher peak for rates. Traders will be closely monitoring Fed Chair Powell’s press conference which will take place after the rates announcement for guidance on futures rate hikes.

From a technical point of view, the GBPUSD pair continues to oscillate around local support at 1.2355 waiting for a catalyst for another big move. Should break lower occur, downward move may deepen towards next support at 1.2150 which is marked with previous price reactions and 100 EMA (purple line). In case of a morendovish FED, the pair may retest recent high at 1.2450.​

 

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Gold price resumes the bullish trend

Gold price ended yesterday above 1810 level, to open the way to achieve more gains in the upcoming sessions, as it resumes the main bullish trend within the bullish channel that has positive targets that start at 1838.1 and extend to 1900. Therefore, we expect to witness more rise on the intraday and short term basis, noting that breaking 1810 will stop the positive scenario and press on the price to test the bullish channel’s support line around 1784.50 before any new attempt to rise.

The expected trading range for today is between 1795 support and 1835 resistance.​

 

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Crude oil price faces solid resistance​

Crude oil price’s rally stopped at 75.63, which formed solid resistance against the price, accompanied by witnessing overbought signals through stochastic that might press on the price to rebound bearishly, while the EMA50 supports the price positively.

Therefore, the contradiction between the technical factors makes us prefer to stay aside until we get clearer signal for the next trend, noting that breaching 75.63 will lead the price to achieve additional bullish correction that its next target reaches 78.93, while breaking 74.85 will put the price under negative pressure that its targets begin by testing 74.05 followed by 72.60 levels.

The expected trading range for today is between 73.80 support and 77.30 resistance.​

 

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S&P 500 - Index strengthens ahead of Fed meeting​

Last week, analysts at JPMorgan Chase & Co. predicted growth of quotations within 10.0% if inflation in the US is lower than the forecast, but the asset was able to strengthen only by 2.2%. However, consumer prices increased in November by 7.1%, lower than October's growth of 7.7%, virtually guaranteeing a softening of the “hawkish” rhetoric of the US Federal Reserve. The meeting will take place this evening, and analysts expect the regulator to raise interest rates by 50.0 basis points to 4.50%: this signals that the agency is interested in a sharp tightening of monetary policy, and companies that are highly dependent on the cost borrowing, learn that their debt load will not be sharply increased once again.

The trading instrument continues the local corrective trend and forms an ascending corridor on the daily chart, rising toward the resistance line, and the technical indicators keep a buy signal.

Resistance levels: 4090, 4310 | Support levels: 3990, 3830​

 

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EURUSD - EU authorities failed to agree on the limit for Russian gas price

Yesterday, the energy ministers of the EU countries could not agree on the maximum price for gas purchased from the Russian Federation, and consultations on this issue were postponed until next week. The European Commission has proposed a third, lower gas price cap of 2.360K dollars per 1.0K cubic meters for deliveries next month at the current price of 1.500K dollars. Still, according to Hungarian Foreign Minister Péter Szijjártó, after a long debate at the plenary meeting, no agreements were reached so that the discussion would continue in the framework of bilateral negotiations.

On the daily chart, the trading instrument continues corrective growth, confidently holding above the resistance line of the local ascending corridor, and the technical indicators maintain a stable buy signal.

Resistance levels: 1.067, 1.085 | Support levels: 1.053, 1.032​

 

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XRPUSD - Technical analysis​

The XRPUSD pair moves within a long-term downward channel, trading within a sideways movement for the last month and a half. This week, the quotes fell to 0.3662 (Murrey [3/8]) but then corrected against the positive November inflation data in the US.

Currently, the asset is testing 0.3906 (Murrey [4/8], the middle line of Bollinger bands), consolidation above which will allow it to leave the downwards channel and continue rising to 0.4360 (Murrey [6/8], Fibonacci correction 23.6%), 0.4639 (Murrey [7/8]), 0.4883 (Murrey [8/8]). The key "bearish" level is 0.3662 (Murrey [3/8]), which breakdown will give the prospect of a decline to 0.3418 (Murrey [2/8]), 0.3174 (Murrey [1/8]) and 0.2930 (Murrey [0 /8], the region of June lows). Uncertainty in the market associated with today's meeting of the US Federal Reserve remains, and the movement of the trading instrument will depend on the comments of US regulator officials.

Resistance levels: 0.3906, 0.436, 0.4639, 0.4883 | Support levels: 0.3662, 0.3418, 0.3174, 0.293​