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ECB Governing Council member Gabriel Makhlouf said, "To continue on our path to bring inflation back to our 2% target, I see a 50 basis-point increase in interest rates as the minimum needed at our December meeting."

"We have to be open to policy rates moving into restrictive territory for a period," the Irish central-bank chief said. "It is premature to be talking about the end-point for policy rates amid the prevailing levels of uncertainty."

"The justification for the expansion of the balance sheet – too low inflation and the risk of deflation – has ended, and it is time to look at reducing its size," he said.

Eurozone retail sales volume dropped -1.8% mom in October, worse than expectation of -1.6% mom. The volume of retail trade decreased by -2.1% for non-food products and by -1.5% for food, drinks and tobacco, while it grew by 0.3% for automotive fuels.

EU retail sales volume dropped -1.7% mom. Among Member States for which data are available, the largest monthly decreases in the total retail trade volume were registered in Austria (-4.6%), Croatia (-4.0%) and Belgium (-3.3%). Increases were observed in Luxembourg (+2.6%), Cyprus, Malta and Portugal (all +0.5%) and Spain (+0.4%).

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Eurozone Sentix Investor Confidence rose from -30.9 to -21.0 in December, highest since June. Current Situation Index rose from -29.5 to -20.0. Expectations Index rose from -32.3 to -22.0, highest since March.

Sentix said: "The latest sentix economic data improve again and surprisingly significantly. Investors are spreading hope that thanks to mild winter weather, sufficient gas in storage and a possible peak in inflation data, the economic downturn has also passed its zenith.

"Internationally, there are also more moderate tones from the US Federal Reserve, which is holding out the prospect of "only" 50 basis points of interest rate increases in December. And in China, the protests finally seem to point to an end to the restrictive Corona measures.

"So will the recession end before it has really begun?"

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UK PMI services was finalized at 48.8 in November, unchanged from October's reading, lowest since January 2021, and second second consecutive month of contraction. PMI Composite was finalized at 48.2, unchanged from prior month, and the fourth successive month of contraction.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence: "A further economic contraction signalled by the PMI surveys hints at a growing recession risk for the UK. A change of government and its new economic policies may have helped arrested some of the financial market volatility after September's 'mini-budget' but the economic picture remains stubbornly unchanged. "

"The overall rate of economic contraction has held steady compared to October, indicative of GDP falling at a quarterly rate of 0.4%. As such, this is the toughest spell the UK economy has faced since the global financial crisis excluding only the height of the pandemic.

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Eurozone PMI Services was finalized at 48.5 in November, down from October's 48.6. That's also a 21-month low. PMI Composite was finalized at 47.8, up from prior month's 47.3. Looking at some member countries, Ireland PMI Composite France dropped to 48.8 and 48.7 respectively, both 21-month low. Germany (46.3), Italy (48.9), and Spain (49.6) were at 3-month high.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said: "A fifth consecutive monthly falling output signalled by the PMI adds to the likelihood that the eurozone is sliding into recession. However, at present the downturn remains only modest, with an easing in the overall rate of contraction in November means so far the region looks set to see GDP contract by a mere 0.2%."

Full release here.

EURCHF has been gradually edging higher in the past few sessions as it attempts to find a clear direction ahead of an action-packed period. A series of higher highs and higher lows since the multi-decade low of September 26 of 0.9403 have placed the pair in a short-term bullish trend but the near-term bias remains unclear.

The September 29 upward sloping trendline has been acting as a trailing support amidst an environment of lower volatility. A cross check of the indicators confirms this market uncertainty. The Average Directional Movement Index (ADX) is showing a lack of trend, as it is clearly below 25, while the RSI is trading sideways, but above the 50-midpoint. If we also put in the mix the tightening Bollinger bands, then the market appears to be gearing up for the next move.

Should the bulls decide to push EURCHF higher, they will be faced with the 0.9958-80 area. The 50% Fibonacci retracement level of the June 9 – September 26 downtrend of 0.9958, the March 7 low and the 200-day simple moving average (SMA) respectively occupy this range. Looking higher, the 61.8% Fibonacci at 1.0089 should be an obvious target.

From the perspective of the bears, the 38.2% Fibonacci of 0.9827 and the 50-day SMA should be the initial targets, before they become more ambitious and place their eyes on the 100-day SMA at 0.9746. Lower, the 23.6% Fibonacci of 0.9665 could be the next support level.

To sum up, EURCHF is trying to find its near-term direction. The very gradual move higher is not confirmed by the momentum indicators as the market appears to be in waiting mode.

EURUSD advanced above the 1.0500 in the previous couple of sessions, suggesting that the market is in a bullish mode in the short-term timeframe.

Regarding the trend, it is likely to remain on the upside as the price continues to stay above the 200-day simple moving average (SMA). The MACD oscillator is strengthening its bullish momentum above its trigger line in the positive region; however, the RSI is holding near the overbought territory, suggesting some losses.

An extension to the upside could meet the 1.0620 resistance level ahead of the next obstacle of 1.0780, taken from the high on May 30. Further up, resistance could run towards the 1.0900 psychological mark.

On the other hand, if the pair weakens, the 200-day SMA and the 20-day SMA around 1.0355 could provide immediate support ahead of the 1.0200 barrier. Even lower, the 1.0100 and the 1.0000 round numbers could worsen the outlook to bearish, opening the way towards the 0.9730 level.

In the long-term picture, the bearish sentiment changed after the jump above the 1.0500 handle and the 200-day SMA. Any moves below those levels may switch the outlook back to bearish.

The hourly chart of the DXY index shows the end of the global corrective trend, which took the form of a triple zigzag consisting of five main cycle waves w-x-y-x-z.

Thus, the market may currently be at the beginning of the first part of a major bearish trend.

It is assumed that the bears form a triple zigzag pattern Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ. It seems that the sub-waves Ⓦ-Ⓧ-Ⓨ-Ⓧ have already been completed. In the near future, the price is expected to continue falling in the primary wave Ⓩ. Its end is possible near 101.59. At that level, it will be at 76.4% of wave Ⓨ.

Let's consider an alternative option in which the formation of a cycle triple zigzag will continue.

Most likely, we see a zigzag price movement in the wave z.

The wave z may take the form of a zigzag Ⓐ-Ⓑ-Ⓒ, where the first impulse Ⓐ and the correction Ⓑ in the form of an intermediate double zigzag are already completed. The entire wave z can complete its pattern near 116.21 level. At that level, it will be at the 61.8% Fibonacci extension of wave y.

The first sub-wave (1), which is part of the primary wave Ⓒ, is likely to reach the level of 107.22, marked by a minute correction.

The Dow Jones 30 whipsawed as traders took profit post-NFP. The index has been looking to hold onto its recent gains after a rally above August’s high of 34300. A bounce off the previous consolidation range near 33600 and over the 20-day moving average suggests that the uptrend is still intact. The demand zone between 33600 and 33900 is key in keeping the current bullish framework valid. A close above 34700 could trigger a new round of momentum buying and send the price to last April’s high of 35500.

The higher-beta pound outperforms across the board thanks to improved risk sentiment. The recent rebound came to a halt at 0.8670 and a subsequent fall below the critical floor at 0.8570 indicates that the path of least resistance is down. This is an invalidation of the rally from early September after a two-month long consolidation. As buying interest becomes scarce, the bears may see a rebound as an opportunity to sell into strength. 0.8500 would be the next target should the sell-off regains momentum.