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Daily Pivots: (S1) 0.9296; (P) 0.9325; (R1) 0.9344; More....

Intraday bias in EUR/CHF remains on the downside for the moment. Corrective rebound from 0.9204 could have completed with three waves up to 0.9417. Deeper fall would be seen to 0.9254 support first. Firm break there will bring deeper fall to 0.9209 key support again. On the upside, above 0.9353 minor resistance will turn intraday bias neutral first.

In the bigger picture, a medium term bottom is probably in place at 0.9204. More consolidations would be seen above there with risk of stronger rebound to 38.2% retracement of 0.9928 to 0.9204 at 0.9481. But outlook will remain bearish as long as 0.9481 holds and another fall through 0.9204 to resume larger down trend is in favor.

Daily Pivots: (S1) 1.4341; (P) 1.4404; (R1) 1.4463; More...

Intraday bias in USD/CAD stays on the upside at this point. Current rally is part of the larger up trend. Sustained trading above 1.4391 projection level will pave the way to 1.4667 long term resistance. On the downside, below 1.4304 minor support will turn intraday bias neutral and bring consolidations first.

In the bigger picture, up trend from 1.2005 (2021) is in progress and met 61.8% projection of 1.2401 to 1.3976 from 1.3418 at 1.4391 already. Sustained trading above there will pave the way to 1.4667/89 key resistance zone (2020/2015 highs). Medium term outlook will remain bullish as long as 55 W EMA (now at 1.3706) holds, even in case of deep pullback.

Daily Pivots: (S1) 0.6203; (P) 0.6234; (R1) 0.6269; More...

Intraday bias in AUD/USD remains on the downside for the moment as fall from 0.6941 is still in progress. Firm break of 0.6169 key support will confirm larger down trend resumption. Next near term target is 138.2% projection of 0.6941 to 0.6511 from 0.6687 at 0.6074. On the upside, above 0.6298 minor resistance will turn intraday bias neutral first.

In the bigger picture, price actions from 0.6169 (2022 low) are seen as a medium term consolidation to the down trend from 0.8006. More sideway trading could be seen above 0.6169, but overall outlook will stay bearish as long as 0.6941 resistance holds. Firm break of 0.6169 will resume the down trend to 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806 next.

Daily Pivots: (S1) 1.0333; (P) 1.0378; (R1) 1.0407; More....

Outlook in EUR/USD is unchanged and intraday bias stays on the downside. Firm break of 1.0330 support will resume the fall from 1.1213 and target 61.8% projection of 1.0936 to 10330 from 1.0629 at 1.0254, and then 100% projection at 1.0023. On the upside, above 1.0452 will turn intraday bias neutral again first.

In the bigger picture, focus stays on 50% retracement of 0.9534 (2022 low) to 1.1274 at 1.0404. Strong rebound from this level will keep price actions from 1.1273 (2023 high) as a medium term consolidation pattern only. However, sustained break of 1.0404 will raise the chance that whole up trend from 0.9534 has reversed. That would pave the way to 61.8% retracement at 1.0199 first. Firm break there will target 0.9534 low again.

Daily Pivots: (S1) 1.2442; (P) 1.2554; (R1) 1.2614; More...

GBP/USD's breach of 1.2486 support suggests that fall from 1.3433 is resuming. Intraday bias stays on the downside, and deeper fall would be seen to 1.2298 and possibly further to 61.8% projection of 1.3433 to 1.2486 from 1.2810 at 1.2225. On the upside, above 1.2607 minor resistance will turn intraday bias neutral first. But outlook will stay bearish as long as 1.2810 resistance holds, in case of recovery.

In the bigger picture, price actions from 1.3433 medium term are seen as correcting whole up trend from 1.0351 (2022 low). Deeper decline could be seen to 38.2% retracement of 1.0351 to 1.3433 at 1.2256, which is close to 1.2298 structural support. But strong support is expected there to bring rebound to extend the corrective pattern.

Daily Pivots: (S1) 0.8951; (P) 0.8990; (R1) 0.9027; More…

Intraday bias in USD/CHF is turned neutral first with current retreat and some consolidations would be seen below 0.9020 temporary top. But further rally is expected as long as 0.8735 support holds. On the upside, break of 0.9020 will resume the rally from 0.8374. Next target will be 61.8% projection of 0.8374 to 0.8956 from 0.8735 at 0.9095.

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern, with rise from 0.8374 as the third leg. Overall outlook will continue to stay bearish as long as 0.9223 resistance holds. Break of 0.8332 low is in favor at a later stage when the consolidation completes.

• USDCHF remains in bullish bias
• RSI suggest overstretched market

USDCHF has added more than 7% since the end of September, sending the price to a new five-month high of 0.9020. However, the pair is currently losing some ground but remains above the 0.8955 key level.

From a technical standpoint, the MACD oscillator is still extending its positive momentum, but the RSI is flattening above the neutral threshold of 50, indicating a potential downside correction.

If the bulls remain under control, then the price may test the next resistance line of 0.9050, taken from the peak in July. Even higher, the 0.9160 barrier could endorse the bullish bias in the short-term view.

On the other hand, a dive below 0.8955 could send traders toward the 20-day simple moving average (SMA) at 0.8865, but more importantly, the flat 200-day SMA at 0.8820 may act as a turning point.

Summarizing, USDCHF is in a strong upside tendency, and only a tumble below the 0.8710-0.8735 support region may change this view.

Brent crude oil prices fell below 73 USD per barrel on Friday, reflecting ongoing downward pressure. The market is poised to close the week with losses as a robust US dollar weighs heavily on commodity prices.

This week, the US Federal Reserve signalled a measured approach to reducing borrowing costs in 2025, sending the US dollar to a two-year high. The dollar’s strength has raised concerns about a dampened outlook for global fuel demand, particularly in emerging markets where dollar-denominated commodities become more expensive.

Concerns from China add to market anxiety

The ongoing unease about China’s economic recovery adds to the bearish sentiment. Sinopec, the country’s largest refiner, announced that domestic petrol demand likely peaked last year. This revelation has significantly clouded the outlook for 2025 as China’s role as a key driver of global energy consumption diminishes. China’s reduced demand has cast a long shadow over global crude markets, leading to further downward price pressures.

Mixed signals from supply dynamics

Despite the weak demand signals, the supply side has provided mixed indicators. Earlier in the week, data from the US Department of Energy showed reduced oil reserves, temporarily bolstering prices. However, this bullish factor was short-lived. Kazakhstan’s decision to support the extended production cuts under OPEC+ was another potentially supportive signal, but it has failed to provide sustained relief to oil prices amid broader concerns.

The structural expansion of production outside OPEC, particularly in the US and other non-OPEC nations, further complicates the outlook. Combined with China’s declining appetite for energy, these factors suggest that oil prices may end 2024 on a subdued note, with limited prospects for a significant recovery.

Technical analysis of Brent oil

H4 chart analysis: on the H4 timeframe, Brent continues to trade within a broad consolidation range around the 73.13 USD level. The market recently extended this range upwards to 73.40 USD. However, a downward move to 71.93 USD appears imminent. If the market manages to break out of this range to the upside, the next target lies at 75.05 USD, with the potential for further gains towards the 80.00 USD level.

From a technical standpoint, the MACD indicator supports this scenario, with the signal line positioned below the zero level near recent lows. This indicates that the market could soon attempt a reversal towards higher levels, potentially marking the beginning of a new growth wave.

H1 chart analysis: on the H1 chart, Brent is also consolidating around 73.13 USD. The current wave structure suggests a decline towards 71.93 USD, followed by an expected corrective wave to return to 73.13 USD. If this resistance is breached, the market may gain momentum, with an upward trajectory targeting 75.05 USD and potentially higher levels.

Markets

Front end US yields returned a few bps of the sharp Fed-induced gains yesterday but the long end extended its march higher. The 10-30-yr bucket added between 4.8 and 5.9 bps. Economic data, while second tier, again in most cases underscored the country’s economic resilience. European swap rates gapped higher in a first response to the Fed. They ended up with net daily changes between 3 (2-yr) and 7 (10-yr) bps. The dollar pulled back but the euro did not seize the opportunity. EUR/USD closed stable around 1.035. JPY underperformed after the Bank of Japan kept rates steady. USD/JPY shot up from 154.8 to 157.44. The pound dropped from EUR/GBP 0.822 to 0.829. The Bank of England’s 6-3 vote for a hold yesterday was a tighter call than it appeared. Conservative market pricing - only two cuts next year - made both sterling and short-term UK yields vulnerable for a kneejerk move lower. The Norwegian krone finishes the top three losers following the central bank readying to ease monetary policy in Q1 of next year.

The economic calendar features some interesting data for key areas though we doubt they’ll leave a significant mark on trading. Japan kicked off with inflation figures this morning (see News & Views). UK retail sales released just now were weaker than expected across all gauges, triggering some further GBP weakness. The EC’s consumer confidence is due later today and after the US release of PCE inflation figures. The latter are expected to rise by 0.2% m/m, lifting the yearly measures for headline and core to 2.5% and 2.9% respectively. After Wednesday’s Fed meeting, markets have drawn some hawkish conclusions that are unlikely to change with (outdated) PCE numbers though. If anything, the front end of the curve could be most vulnerable in case of a downside surprise given there’s nothing more than one cut and a half priced in for all of 2025. We expect the dollar to hold near the recent strong levels. We keep a closer eye at the developments in US Congress. A government shutdown suddenly and unexpectedly became a real possibility this weekend after president-elect Trump and key advisor Musk helped torpedo a bipartisan stopgap bill to fund spending through March 14. A GOP plan backed by Trump, which included a suspension of the debt ceiling through 2027, later also stranded in the Republican-led House.

News & Views

Price pressure keeps building in Japan. National inflation accelerated to 0.6% M/M in November with the annual headline figure rising from 2.3% to 2.9%, the second fastest pace since October 2023. The Bank of Japan’s preferred core measure (ex. fresh food), increased by 0.5% M/M to 2.7% Y/Y from 2.3%. Goods prices gained 0.9% M/M on a strong rise in utility prices (+3% M/M) after the government rolled back energy subsidies. Services costs were up 0.2% M/M. Today’s inflation numbers should give the BoJ more confidence that inflation will settle around its 2% inflation target. Yesterday, the central bank kept its policy rate unchanged with BoJ governor Ueda remaining cautious on the timing of the next rate hike. That added JPY weakness to post-FOMC USD-strength, propelling USD/JPY to its highest level since mid-July (USD/JPY 158 from 155). It immediately prompted comments from Minister of Finance Kato: “The government is deeply concerned about recent currency moves, including those driven by speculators. We will take appropriate action if there are excessive moves in the currency market.”

US president-elect Trump gave another sneak preview on how he will use tariffs as leverage during his tenure. His first hit was at Mexico and Canada where tariffs could be installed if borders aren’t strengthened to stop migration flows into the US. Now he took aim at the EU: “I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!” Last year, the EU already bought more than half of US LNG deliveries. Up next: China? A stronger CNY or else TARIFFS all the way?!

Daily Pivots: (S1) 155.31; (P) 156.56; (R1) 158.68; More...

Intraday bias in USD/JPY remains on the upside for now despite current mild retreat. Current rally is part of the whole rise from 139.57, and should target 61.8% projection of 139.57 to 156.74 from 148.64 at 159.25 next. On the downside, below 156.39 minor support will turn intraday bias neutral again first. But outlook will stay bullish as long as 153.15 support holds, in case of retreat.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low). The range of medium term consolidation should be set between 38.2% retracement of 102.58 to 161.94 at 139.26 and 161.94. Nevertheless, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.