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Daily Pivots: (S1) 0.8877; (P) 0.8918; (R1) 0.8983; More…

Intraday bias in USD/CHF remains neutral as consolidations continue below 0.8956. Outlook will stay bullish as long as 0.8800 support holds, in case of retreat. Break of 0.8956 will resume the rally from 0.8374, and target 0.9223 key resistance next.

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) 1.2480; (P) 1.2539; (R1) 1.2590; More...

Intraday bias in GBP/USD remains neutral and more consolidations would be seen above 1.2486. But outlook will stay bearish as long as 1.2713 resistance holds. Break of 12487 will resume the fall from 1.3433 to 1.2298 cluster support zone.

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 1.2918) 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) 1.0335; (P) 1.0416; (R1) 1.0500; More...

EUR/USD's recovery from 1.0330 extends higher today but stays below 1.0609 resistance. Intraday bias remains neutral and further decline is still in favor. On the downside, sustained trading below 1.0404 key fibonacci level will carry larger bearish implication and target next level at 161.8% projection of 1.1213 to 1.0760 from 1.0936 at 1.0203. However, firm break of 1.0609 will confirm short term bottoming, and turn bias back to the upside for 1.0760 support turned resistance first.

In the bigger picture, immediate focus is now 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.

Dollar remains under pressure as the market heads into the US session, with selling momentum picks up slightly alongside a continued decline in Treasury yields. US stock futures are staging a robust rally, reflecting optimism over President-elect Donald Trump's selection of Scott Bessent as Treasury Secretary. Bessent is viewed as a safe choice for implementing key policies, including tariffs, with a measured approach.

On the other hand, Euro stands out as the strongest performer so far, shrugging off disappointing German Ifo Business Climate data. Swiss Franc follows as the second strongest, while Yen rounds out the top three. In contrast, Canadian Dollar is among the weakest, followed by Australian Dollar, with Kiwi and Sterling occupying middle-ground positions.

Technically, Gold is also weakening slightly in spite of the pullback in Dollar. Rebound from 2536.67 stalled after reaching 2721.20. While another rise cannot be ruled out, upside should be limited by 2789.92 resistance. Break of 2618.74 support would argue that the corrective pattern from 2789.92 has started the third leg for 2536.67 again, and possibly below.

In Europe, at the time of FTSE is up 0.33%. DAX is up 0.43%. CAC is up 0.14%. UK 10-year yield is down -0.048 at 4.344. Germany 10-year yield is down -0.0203 at 2.227. Earlier in Asia,Nikkei rose 1.30%. Hong Kong HSI fell -0.41%. China Shanghai SSE fell -0.11%. Singapore Strait Times fell -0.39%. Japan 10-year JGB yield fell -0.0057 to 1.074.

BoE’s Lombardelli warns of costly risks if inflation upside materializes

I view the probabilities of downside and upside risks to inflation as broadly balanced. But at this point I am more worried about the possible consequences if the upside materialised, as this could require a more costly monetary policy response.

Lombardelli said the level of interest rates was “comfortably in restrictive territory at the moment” and supported “a gradual removal of monetary policy restriction” but the data over the coming months will be critical and need “careful observation.”

“There are some signs that the process of wage disinflation may be slowing, so it’s too early to declare victory on inflation.  It’s often been said that the last mile may be the hardest, and that’s where we are now.”

ECB's Lane warns against prolonged restrictive policy

In an interview with Les Echos, ECB Chief Economist Philip Lane highlighted that "monetary policy should not remain restrictive for too long".

He explained the challenges of maintaining restrictive monetary policy stance for an extended period, cautioning that it could stifle economic growth and lead to inflation falling below ECB’s 2% target.

However, while markets currently assign a 50% probability to a 50bps rate cut in December, Lane appeared to moderate these expectations by emphasizing that inflation remains above target in key areas, particularly services, and that much of the recent decline stems from easing energy costs rather than broad-based price adjustments.

"There is still some distance to go in terms of adjustment for inflation to return to the desired level in a more sustainable way," Lane noted.

German Ifo falls to 85.7, further deteriorations

Germany’s Ifo Business Climate Index declined to 85.7 in November, down from 86.5 in October, reflecting growing pessimism across key sectors of Europe’s largest economy. Current Assessment Index dropped from 85.7 to 84.3, indicating weaker confidence in present conditions. Expectations Index edged slightly lower from 87.3 to 87.2, suggesting limited optimism for the months ahead.

Sector-specific data painted a grim picture. Manufacturing sentiment worsened, dropping from -20.6 to -21.9, and the services sector also reversed, declining from 0.1 to -3.6. Construction sentiment weakened significantly, falling from -25.7 to -28.5. Trade was the only sector to show some improvement, rising from -29.4 to -26.6, though it remains firmly in negative territory.

Ifo President Clemens Fuest characterized the situation as increasingly bleak, remarking that sentiment among German companies has turned "gloomier" and that the economy is "floundering."

New Zealand's Q3 retail sales down -0.1% qoq, ex-auto sales slumps -0.8% qoq

New Zealand’s retail sales volume for Q3 showed a marginal decline of -0.1% qoq, a better outcome than the expected -0.5% qoq contraction. However, the data revealed underlying weakness, as retail sales excluding autos fell by a sharper-than-expected -0.8% qoq, missing the forecast of -0.3% qoq.

A breakdown of the data shows that 10 out of 15 retail industries experienced lower sales volumes during the quarter.

Meanwhile sales value dropped significantly by -0.7% qoq. Regionally, 15 of the 16 regions reported lower seasonally adjusted sales values, underscoring the broad-based nature of the decline.

As Michael Heslop, an economic indicators spokesperson, noted, “Retail activity was flat in the September 2024 quarter, with a decrease in spending in most retail industries being offset by an increase in motor vehicles and electrical and electronic goods.”

New Zealand's goods exports rises 7.5% yoy in Oct, goods imports up 3.0% yoy

New Zealand's goods exports increased by 7.5% yoy in October, reaching NZD 5.8B, while total goods imports rose by 3.0% yoy to NZD 7.3B. This resulted in a trade deficit of NZD -1.54B, which, although significant, was better than the expected deficit of NZD -1.76B.

Key export markets demonstrated robust growth, with exports to China rising by NZD 113m (8.4% yoy), Australia up by NZD 60m (8.3% yoy), the US surging NZD 90m (15% yoy), the EU increasing NZD 48m (18% yoy), and Japan gaining NZD 19m (6.7% yoy).

On the import side, trends were more mixed. Imports from China and the EU declined, falling NZD 42m (-2.7% yoy) and NZD 35m (-3.2% yoy) respectively. However, imports from the US surged by NZD 459m (79% yoy), while South Korea and Australia saw notable increases of NZD 148m (32% yoy) and NZD 58m (7.5% yoy) respectively.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0335; (P) 1.0416; (R1) 1.0500; More...

EUR/USD's recovery from 1.0330 extends higher today but stays below 1.0609 resistance. Intraday bias remains neutral and further decline is still in favor. On the downside, sustained trading below 1.0404 key fibonacci level will carry larger bearish implication and target next level at 161.8% projection of 1.1213 to 1.0760 from 1.0936 at 1.0203. However, firm break of 1.0609 will confirm short term bottoming, and turn bias back to the upside for 1.0760 support turned resistance first.

In the bigger picture, immediate focus is now 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.

Hello fellow traders. In this technical article we’re going to take a look at the Elliott Wave charts charts of USDCHF Forex pair published in members area of the website. Our members know USDHCF recently made a clear three-wave correction. The pull back completed as Elliott Wave Double Three pattern and made rally toward new highs as expected. In this discussion, we’ll break down the Elliott Wave pattern and forecast.

Elliott Wave Double Three Pattern

Double three is the common pattern in the market , also known as 7 swing structure. It’s a reliable pattern which is giving us good trading entries with clearly defined invalidation levels.
The picture below presents what Elliott Wave Double Three pattern looks like. It has (W),(X),(Y) labeling and 3,3,3 inner structure, which means all of these 3 legs are corrective sequences. Each (W) and (Y) are made of 3 swings , they’re having A,B,C structure in lower degree, or alternatively they can have W,X,Y labeling.

USDCHF Elliott Wave 1 Hour Chart 11.20.2024

USDCHF is showing higher high sequences in the cycle from the September 6th low , suggesting further strength ahead. The structure of this pullback shows clear 7 swings – Double Three Pattern. The first leg, shows a clear 3-wave structure a,b,c red, followed by a 3-wave bounce in (x) blue. We can also count 3 swings in (y) blue leg. We advise against selling $USDCHF and instead favor the long side. While the price stays above ((iv)) black low, we expect to see further rally toward new highs.

USDCHF Elliott Wave 1 Hour Chart 11.24.2024

USDCHF found buyers as expected. The forex pair has reacted strongly and eventually we got a break toward new highs. Now, intraday pull backs should ideally keep finding buyers as far as 0.8783 pivot holds.

• US 500 rebounds from uptrend line
• RSI approaches 70 level; MACD tries to surpass its trigger line

The US 500 cash index is creating the sixth consecutive green day, following the bounce off the short-term uptrend line and the 5,855 support level. The price is currently approaching the previous all-time peak of 6,052 and the 161.8% Fibonacci extension level of the down leg from 5,720 to 5,115 at 6,100.

On the other hand, a retreat may send traders towards the 20-day simple moving average (SMA) at 5,924 ahead of the previous bottom at 5,855. A penetration of the diagonal line could endorse the negative scenario, meeting the 5,800 mark and the 5,720 support region.

According to technical oscillators, the RSI is extending its upside move above the neutral threshold of 50, while the MACD is ready to cross above its trigger line, holding beyond the zero level.

All in all, as long as the US 500 index remains above the long-term uptrend line and, more importantly, above the 200-day SMA, then the outlook remains strongly positive in the bigger picture.

I view the probabilities of downside and upside risks to inflation as broadly balanced. But at this point I am more worried about the possible consequences if the upside materialised, as this could require a more costly monetary policy response.

Lombardelli said the level of interest rates was “comfortably in restrictive territory at the moment” and supported “a gradual removal of monetary policy restriction” but the data over the coming months will be critical and need “careful observation.”

“There are some signs that the process of wage disinflation may be slowing, so it’s too early to declare victory on inflation. It’s often been said that the last mile may be the hardest, and that’s where we are now.”

EUR/USD encountered significant pressure, testing a low of 1.0331 before rebounding to 1.0476, as market concerns mount over the potential economic slowdown in Europe and aggressive rate cuts by the European Central Bank (ECB).

Recent business surveys indicating an accelerated economic contraction in Germany and France have starkly dampened the euro’s outlook. Additionally, under the newly elected President Donald Trump’s administration, potential new trade duties from the US threaten to exacerbate Germany’s already fragile economic state. Trump’s protectionist stance could notably impact German industries, intensifying existing internal challenges.

Investors are bracing for a scenario where the ECB might implement rate reductions more swiftly than anticipated. At the same time, the Federal Reserve may hold steady, expanding the interest rate differential unfavourably against the euro.

This backdrop has led to heightened investor nervousness about the euro’s future, with further potential declines in EUR/USD not ruled out amidst ongoing uncertainties regarding the full pricing-in of these expectations.

Technical analysis of EUR/USD

H4 chart: the EUR/USD has hit its projected low at 1.0331, subsequently initiating a rebound towards 1.0500. Upon reaching this level, a pullback to 1.0414 may occur. The market may form a consolidation range around 1.0414, with potential upward movements targeting 1.0570 and possibly extending to 1.0655. This EUR/USD outlook is supported by the MACD indicator, which suggests an impending rise from below the zero level.

H1 chart: the pair is forming a rise to 1.0500, which is anticipated as an initial target. After this level, a corrective phase towards 1.0414 is expected, suggesting a test from above. The stochastic oscillator corroborates this view, indicating a readiness to descend from a mid-range position towards lower thresholds.

• Gold switches to loses before reaching all-time high
• A consolidation phase likely in the short-term

Gold felt Monday's blues, retreating immediately toward its 20-day simple moving average (SMA) at 2,670 after five consecutive winning days.

The pullback in the price is now raising concerns about whether the metal will form a lower high in the coming sessions. With the 20-day and 50-day SMAs nearing a bearish cross, sentiment could stay downbeat, although some key support levels could still come to the rescue.

The 2,672 area, which aligns with the 23.6% Fibonacci retracement and the short-term SMAs, is currently keeping the bears busy. If it breaks, the next level to watch is 2,635, where the lower boundary of the big bullish channel sits. Then the spotlight will fall on the 38.2% (there is an extra space here) Fibonacci at $2,600, a break of which could bring attention to the $2,450-2,550 zone, where the 50% Fibonacci level lies. A drop below $2,510 would signal a bearish trend reversal, likely leading to a decline toward 2,483 or 2,440.

On the upside, if gold recovers, it could target 2,755, with a break above this level potentially clearing the path to the all-time high of 2,789, and even to 2,800. A further rise could push prices to 2,850 and possibly toward the critical trendline zone of 2,900–2,950.

In summary, gold’s bullish momentum remains at risk. A move above 2,755 would remove downside risks, while a drop below 2,510 could indicate a bearish trend reversal in the short-term picture.

The Canadian dollar has started the week with small gains. In the European session, USD/CAD is trading at 1.3958 at the time of writing, down 0.15% on the day. There are no tier-1 events out of Canada or the US today, which means we can expect a quiet day for the Canadian dollar.

Canada’s retail sales surge

The week ended on a high note as Canada’s retail sales are expected to have jumped 0.7% y/y in October. This follows an upwardly revised gain of 0.4% in September. In the third quarter, retail sales were up 0.9%.

This marks a strong turnaround after a sharp contraction in the first half of the year and indicates that the Bank of Canada’s aggressive interest rate cuts are supporting consumer spending. The BoC has chopped rates by 1.25% since June, lowering the cash rates to 3.75%, its lowest level in two years.

The BoC meets next on Dec. 11 and is expected to lower rates, with a 25 basis point cut the more likely scenario. October inflation surprised on the upside, rising from 1.6% to 2%, and today’s strong retail sales data supports a smaller size cut. As well, the government is removing a sales tax on some items from December 2024 until February 2025. This could dampen spending in November as consumers might delay purchases until December to take advantage of the sales tax holiday.

In the US, the PMI reports pointed to continued weakness in manufacturing, while the services sector continues to carry the economy. The Manufacturing PMI contracted for a fifth straight month, rising from 48.5 to 48.8. The Services PMI rose to 57.0, up from 55.0, which points to strong growth.

USD/CAD Technical

• USD/CAD is testing support at 1.3952. Below, there is support at 1.3923
• 1.3986 and 1.4015 are the next resistance lines