Sample Category Title

Daily Pivots: (S1) 1.2600; (P) 1.2647; (R1) 1.2728; More...

GBP/USD is staying in range of 1.2486/2713. Intraday bias remains neutral and further decline is in favor. On the downside, break of 1.2486 will resume the fall from 1.3433 to 1.2298 cluster support zone. However, firm break of 1.2713 will indicate short term bottoming, and turn bias back to the upside for 55 D EMA (now at 1.2882).

In the bigger picture, a medium term top should be in place at 1.3433, and price actions from there are correcting whole up trend from 1.0351 (2022 low). Deeper decline is now expected as long as 55 D EMA (now at 1.2893) holds, to 38.2% retracement of 1.0351 to 1.3433 at 1.2256, which is close to 1.2298 structural support. Strong support should be seen there to bring rebound.

Daily Pivots: (S1) 0.8787; (P) 0.8831; (R1) 0.8863; More…

USD/CHF is staying in range of 0.8800/8956. Intraday bias remains neutral and further rally is still in favor. On the upside, break of 0.8956 will resume the rally from 0.8374, and target 0.9223 key resistance next. However, firm break of 0.8800 will confirm short term topping and turn bias back to the downside for 55 D EMA (now at 0.8718).

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern. Rise from 0.8374 is seen 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.

Daily Pivots: (S1) 149.97; (P) 151.60; (R1) 152.75; More...

Intraday bias in USD/JPY is turned neutral with loss of momentum as seen in 4H MACD. Strong support could be seen from 38.2% retracement of 139.57 to 156.74 at 150.18 to complete the corrective fall from 156.74. On the upside, break of 153.23 support turned resistance will turn intraday bias to the upside for retesting 156.74 high. However, decisive break of 150.18 will argue that whole rise from 139.57 could have completed, and bring deeper fall to 61.8% retracement at 146.12 next.

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.

The forex markets are generally staying in consolidation mode today with US on thanksgiving holiday. , and even Yen's rally is losing some momentum. Nevertheless, the Japanese currency might find some renewed life with the Tokyo CPI data in the upcoming Asian session. BoJ Governing Kazuo Ueda has recently kept the option for a rate hike in December open his comments. But all would depend on incoming data. Any stronger than expected acceleration in Tokyo CPI core would, at least, revive the speculations on BoJ.

At this point, Yen remains the strongest one for the week, followed by Swiss Franc and then Euro. The latter two will look into tomorrow's Swiss Franc and Eurozone CPI flash to decide their final positions at the end of the week. Canadian Dollar and Australian Dollar are staying as the bottom two, followed by Dollar. Meanwhile, Kiwi and Sterling are positioning in the middle.

Technically, Ethereum's near term rally resumed today and it's now eyeing 61.8% projection of 2354.65 to 3444.75 from 3030.65 at 3704.33. Decisive break there could bring upside re-acceleration to 100% projection at 4120.785, which is slightly above 4092.55 record high. However, break of 3444.75 resistance turned support will indicate first rejection by 3700 mark, and bring pullback. Ethereum’s performance could offer clues about Bitcoin’s ability to sustain its rally and power through the key psychological 100k mark.

In Europe, at the time of writing, FTSE is up 0.11%. DAX is up 0.71%. CAC is up 0.60%. UK 10-year yield is up 0.0008 at 4.298. Germany 10-year yield is down -0.0028 at 2.137. Earlier in Asia, Nikkei rose 0.56%. Hong Kong HSI fell -1.20%. China Shanghai SSE fell -0.43%. Singapore Strait Times rose 0.79%. Japan 10-year JGB yield fell -0.0178 to 1.057.

ECB’s Lagarde advocates cheque book strategy to handle Trump's tariff threats

In an interview with the Financial Times, ECB President Christine Lagarde proposed a measured approach to handling U.S. President-elect Donald Trump’s tariff threats, favoring a "cheque book strategy" over outright retaliation.

Trump has outlined plans for sweeping tariffs, including a 60% levy on Chinese goods and a 10-20% range on imports from other countries, including Europe. Lagarde interpreted the range as a negotiating tactic, suggesting Trump is “open to discussion.”

Lagarde expressed preference for a "cheque book strategy" over a "pure retaliation strategy." She explained that Europe could offer to purchase certain US goods and signal readiness for constructive dialogue.

“This is a better scenario than a pure retaliation strategy, which can lead to a tit-for-tat process where no one is really a winner,” she stated.

On the inflationary effects of tariffs, Lagarde admitted the outcome remains uncertain. She explained that the net impact on inflation would depend on various factors, including GDP shifts, currency movements, the specific goods targeted, and the duration of the tariffs.

“If anything, maybe it’s a little net inflationary in the short term,” she remarked, but emphasized the difficulty of forming a conclusive view without further details.

Eurozone economic sentiment tick up to 95.8 in Nov, EU rises to 96.5

Eurozone Economic Sentiment Indicator (ESI) edged higher in November, ticking up from 95.7 to 95.8, reflecting a marginal improvement in overall sentiment. However, underlying components presented a mixed picture. Employment Expectations Indicator (EEI) declined from 99.2 to 98.9, and Economic Uncertainty Indicator (EUI) dropped from 19.0 to 18.5.

Eurozone Industrial confidence improved, rising from -12.6 to -11.1, while services confidence weakened, falling from 6.8 to 5.3. Consumer confidence also slipped, dropping from -12.5 to -13.7, while retail trade confidence improved significantly from -7.2 to -4.4. Construction confidence remained unchanged at -4.8.

Across the broader European Union, ESI rose slightly from 96.3 to 96.5, though declines were seen in key metrics like EEI, which fell from 100.1 to 99.6, and EUI, which dipped from 18.2 to 17.9. Among major EU economies, sentiment improved in France (+3.0), Spain (+2.1), the Netherlands (+1.5), and Poland (+0.7). However, Germany experienced a decline (-1.3), and Italy saw a marginal dip (-0.3).

RBA's Bullock: Inflation to take longer to settle due to unusually tight labor market

In a speech today, RBA Governor Michele Bullock highlighted Australia’s "unusually tight" labor market. She noted that the combination of labor market pressures and demand exceeding supply across the economy would likely mean it will "take a little longer for inflation to settle at target" in Australia.

RBA staff projections anticipate inflation returning sustainably to the midpoint of the 2-3% target range, at 2.5%, by late 2026. This outlook assumes that restrictive financial conditions will gradually balance the economy and the labor market. Governor Bullock remarked, "We still think we are on the narrow path," referencing the delicate balance required to manage inflation without derailing economic growth.

The forecast is based on market-implied cash rate expectations from the November Statement on Monetary Policy, which suggested the rate would remain steady over the near term. However, Bullock clarified, "This is not the Board’s forecast for interest rates," but rather a "conditioning assumption" consistent with RBA’s inflation timeline.

Bullock also acknowledged uncertainties, emphasizing that the inflation forecast includes "substantial bands of error" and is subject to change as new data emerges.

RBNZ’s Silk signals slower easing path with potential pauses ahead

Assistant Governor Karen Silk indicated that RBNZ is likely to slow the pace of monetary easing and incorporate pauses into its rate cycle after February.

“There could be pauses built in, but it is definitely a slower track after February,” she noted in an interview with Bloomberg. This aligns with the bank’s updated projections released yesteday.

Silk highlighted the importance of maintaining "mildly restrictive" monetary policy to manage inflationary pressures, particularly as inflation is projected to rise to 2.5% next year.

Looking further ahead, Silk noted that RBNZ expects to be "a little closer" to the long-term neutral rate by the end of 2025. However, she emphasized that current projections do not indicate rates falling "below neutral" at any point during the forecast period.

NZ ANZ business confidence eases to 64.9, outlook continues to brighten

New Zealand's ANZ Business Confidence dipped marginally in November, falling from 65.7 to 64.9, but it remains at what ANZ describes as an "impressive high" level. Own Activity Outlook, a key forward indicator, rose to a decade high of 48.0 from 45.9, reinforcing optimism about future economic conditions

Inflation related metrics also showed broad improvement, with cost expectations down from 64.2 to 62.9, wage expectations easing from 77.0 to 75.5, and pricing intentions falling from 44.2 to 42.2, marking the first decline in four months. Notably, inflation expectations dropped significantly from 2.83% to 2.53%.

ANZ attributed the robust activity outlook to the impact of interest rate cuts, which are "changing actual behavior, not just expectations." While the economy remains fragile, ANZ highlighted that "things are starting to turn higher," with improving activity suggesting early signs of recovery.

RBNZ is likely to take comfort in these trends, as "sufficient domestic disinflation pressure" appears to be in the pipeline, even if growth rebounds faster than expected. However, the survey tempered expectations for aggressive rate cuts, indicating that "large emergency cuts" may not be necessary.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 149.97; (P) 151.60; (R1) 152.75; More...

Intraday bias in USD/JPY is turned neutral with loss of momentum as seen in 4H MACD. Strong support could be seen from 38.2% retracement of 139.57 to 156.74 at 150.18 to complete the corrective fall from 156.74. On the upside, break of 153.23 support turned resistance will turn intraday bias to the upside for retesting 156.74 high. However, decisive break of 150.18 will argue that whole rise from 139.57 could have completed, and bring deeper fall to 61.8% retracement at 146.12 next.

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.

In a speech today, RBA Governor Michele Bullock highlighted Australia’s "unusually tight" labor market. She noted that the combination of labor market pressures and demand exceeding supply across the economy would likely mean it will "take a little longer for inflation to settle at target" in Australia.

RBA staff projections anticipate inflation returning sustainably to the midpoint of the 2-3% target range, at 2.5%, by late 2026. This outlook assumes that restrictive financial conditions will gradually balance the economy and the labor market. Governor Bullock remarked, "We still think we are on the narrow path," referencing the delicate balance required to manage inflation without derailing economic growth.

The forecast is based on market-implied cash rate expectations from the November Statement on Monetary Policy, which suggested the rate would remain steady over the near term. However, Bullock clarified, "This is not the Board’s forecast for interest rates," but rather a "conditioning assumption" consistent with RBA’s inflation timeline.

Bullock also acknowledged uncertainties, emphasizing that the inflation forecast includes "substantial bands of error" and is subject to change as new data emerges.

Full speech of RBA's Bullock here.

• Gold stages a rebound in short-term timeframe
• Upturn is not convincing; bulls need to overcome $2,650

Gold has been showing some signs of life over the past couple of hours but don’t get too excited just yet. Despite the upturn in the price, this is not convincing enough to say the bulls are back in charge.

The precious metal dipped below an upward-sloping channel on the four-hour chart, and while it’s trying to recover, there's a chance this is just part of a bearish flag pattern—meaning a continuation lower is still a real possibility.

The 20- and 50-period simple moving average (SMA), which have been somewhat restrictive lately, are again under examination, with the 38.2% Fibonacci retracement of the previous upleg being in sight as well at $2,650. If the price fails to jump above this border, it could flip back to the 50% Fibonacci of $2,630 and then toward the 61.8% Fibonacci of $2,607. Additional declines from there could cause a sharper decline to the 78.6% Fibonacci of $2,575.

On the flip side, the RSI is trying to climb back above the neutral 50 mark, and the stochastic oscillator is showing signs of a potential positive shift. These could point to some bullish momentum lingering in the market. If gold can break above the $2,650 threshold, it could make its way to the 200-period SMA and the 23.6% Fibonacci of $2,677. From there, it could even target the $2,710-$2,720 resistance zone.

In brief, while gold has made a bit of a recovery, it’s not out of the woods yet. Buyers will need to see a clear and sustained move above $2,650 before getting fully convinced that the upside is back on track. Until then, the downside risks are still very much in play.

The USD/JPY pair has dropped to 151.56, marking a five-week high for the yen. Market speculations fuel the currency's strength that the Bank of Japan (BoJ) might consider an interest rate hike as soon as December. This speculation was further supported by comments from BoJ Governor Kazuo Ueda, who acknowledged the need for potential rate adjustments due to the yen's weakening.

Currently, the market assigns a 60% probability to a 25-basis-point rate hike in December, an increase from last week's 50%. The shift in expectations is highly influenced by the upcoming release of Tokyo inflation data on Friday. This data will serve as a crucial indicator of Japan's overall consumer price trends and potentially shape future BoJ monetary policies.

Additionally, the yen's recent gains are bolstered by a general weakening of the US dollar, which has seen reduced positions ahead of the Thanksgiving holiday and subsequent limited trading on Friday. The demand for the yen as a safe-haven asset has also diminished as tensions in the Middle East show signs of normalisation, reducing the allure of safe-haven investments.

Technical analysis of USD/JPY

On the H4 chart, USD/JPY has broken down past the 153.00 level and is progressing downward, targeting 149.90. If this level is reached, a rebound to 152.70 is anticipated before another potential decline to 149.12. This bearish trend is supported by the MACD indicator, with its signal line below zero and trending sharply downwards.

The H1 chart shows that after forming a consolidation range around 152.70, the pair has moved downward, reaching 150.50. A corrective move to 152.70 may occur today, followed by a further descent to 149.50, ultimately aiming for a continuation to 149.12. The Stochastic oscillator, positioned below 80 and pointing downward, corroborates this expected downward movement, indicating continued bearish momentum for the USD/JPY pair.

The Japanese yen is lower on Thursday, after climbing 2.4% over the past two trading sessions. In the European session, USD/JPY is trading at 151.83, up 0.57% on the day. On the data calendar, Japan releases Tokyo Core CPI. In the US, the financial markets are closed for the Thanksgiving holiday and there are no US events.

Tokyo Core CPI expected to rise to 2.1%

Tokyo Core CPI, a leading indicator of nationwide inflation trends, will be released on Friday. The market estimate for November stands at 2.1% y/y, following a 1.8% gain in October, which was the lowest level since April. The headline rate is expected to rise from 1.8% to 1.9%.

October inflation numbers have been mixed. The Bank of Japan Core CPI index surprised on the downside with a 1.5% gain, down from 1.7% in September. However, services inflation inched up to 2.9%, up from 2.8% in September and above the forecast of 2.5%. If the Tokyo inflation release accelerates as expected, it will likely raise expectations of a rate hike from the Bank of Japan at the Dec. 19 meeting.

Inflation isn’t the only item on the minds of BoJ policymakers. There is significant political uncertainty both at home and abroad. Prime Minister Ishiba lost his majority in parliament in the October election and needs opposition support to pass a supplementary budget. In the US, President-elect Trump is threatening to slap tariffs on its trading partners, which could have massive negative implications for Japan’s auto industry, a key sector of the economy.

On Wednesday, US GDP (second estimate) confirmed the initial estimate gain of 2.8% for the third quarter. This indicates solid economic growth, which has been helped by strong consumer spending. The worries about a recession have subsided and the Fed has signaled that it plans to gradually continue trimming interest rates.

USD/JPY Technical

• USD/JPY is testing resistance at 151.60. Above, there is resistance at 152.75
• 149.97 and 148.82 are the next support levels

While traditional financial markets experience a lull due to Thanksgiving in the U.S., the bullish momentum in the cryptocurrency market continues to keep traders engaged.

As seen on the ETH/USD chart:

→ Ethereum's price has broken through the critical $3500 level, which acted as resistance during the summer (indicated by an arrow).

→ Additionally, the strength of demand is underscored by the fact that the price has surpassed the upper boundary of an ascending channel (marked in blue) that began in August.

Interestingly:

→ On October 25, we reported that the ETH/USD rate had fallen to a 44-month low.

→ Today, Bitcoin's performance appears weaker relative to Ethereum.

What does this indicate?

On one hand, investors might be shifting their focus from Bitcoin, which has stalled near the psychological $100,000 mark, to Ethereum, which may appear undervalued compared to the leading cryptocurrency.

On the other hand, the current upward momentum breaking above $3600 could turn into a bull trap.

Failure of the ETH/USD rate to consolidate at its recent highs could make the second scenario more likely.

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Eurozone Economic Sentiment Indicator (ESI) edged higher in November, ticking up from 95.7 to 95.8, reflecting a marginal improvement in overall sentiment. However, underlying components presented a mixed picture. Employment Expectations Indicator (EEI) declined from 99.2 to 98.9, and Economic Uncertainty Indicator (EUI) dropped from 19.0 to 18.5.

Eurozone Industrial confidence improved, rising from -12.6 to -11.1, while services confidence weakened, falling from 6.8 to 5.3. Consumer confidence also slipped, dropping from -12.5 to -13.7, while retail trade confidence improved significantly from -7.2 to -4.4. Construction confidence remained unchanged at -4.8.

Across the broader European Union, ESI rose slightly from 96.3 to 96.5, though declines were seen in key metrics like EEI, which fell from 100.1 to 99.6, and EUI, which dipped from 18.2 to 17.9. Among major EU economies, sentiment improved in France (+3.0), Spain (+2.1), the Netherlands (+1.5), and Poland (+0.7). However, Germany experienced a decline (-1.3), and Italy saw a marginal dip (-0.3).

Full Eurozone ESI release here.