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Daily Pivots: (S1) 1.0311; (P) 1.0359; (R1) 1.0412; More...

EUR/USD is still bounded in consolidation form 1.0481 and intraday bias stays neutral for the moment. Downside of retreat should be contained by 1.0092 resistance turned support to bring another rally. On the upside, break of 1.0481 will resume the rise from 0.9534 and target 1.0609 fibonacci level.

In the bigger picture, a medium term bottom was in place at 0.9534, on bullish convergence condition in daily MACD. Even as a corrective rise, rally from 0.9534 should target 38.2% retracement of 1.2348 (2021 high) to 0.9534 at 1.0609. Sustained trading above 55 week EMA (now at 1.0566) will raise the chance of trend reversal and target 61.8% retracement at 1.1273. This will now remain the favored case as long as 1.0092 resistance turned support holds.

Daily Pivots: (S1) 1.1766; (P) 1.1862; (R1) 1.1961; More...

GBP/USD is still bounded in consolidation from 1.2028 and intraday bias remains neutral at this point. Further rise is expected as long as 1.1644 resistance turned support holds. On the upside, break of 1.2028 will resume whole rise from 1.0351 to 100% projection of 1.0351 to 1.1494 from 1.1145 at 1.2288. However, sustained break of 1.1644 will bring deeper fall to 1.1145 support instead.

In the bigger picture, rise from 1.0351 medium term bottom is at least correcting whole down trend from 1.4248 (2021 high). Further rise is expected as long as 1.1145 support holds. Next target is 61.8% retracement of 1.4248 to 1.0351 at 1.2759.

Daily Pivots: (S1) 0.9452; (P) 0.9504; (R1) 0.9575; More...

USD/CHF is staying in consolidation from 0.9355 and intraday bias remains neutral. In case of stronger recovery, upside should be limited below 0.9680 minor resistance to bring another decline. On the downside, break of 0.9355 will resume the fall from 1.0146 to 0.9287 fibonacci level.

In the bigger picture, rise from 0.8756 (2021 low) has completed at 1.0146, well ahead of 1.0342 long term resistance (2016 high). Based on current downside momentum, fall from 1.0146 might be a medium term down trend itself. Break of 61.8% retracement of 0.8756 to 1.0146 at 0.9287 will pave the way to 0.8756. In any case, risk will stay on the downside as long as 55 day EMA (now at 0.9793) holds.

Daily Pivots: (S1) 139.15; (P) 139.95; (R1) 141.01; More...

Intraday bias in USD/JPY remains neutral as consolidation from 137.66 temporary low is still in progress. In case of stronger recovery, upside should be limited below 145.16 support turned resistance. On the downside, break of 137.66 will resume the decline from 151.93, to 133.07 fibonacci level, as a correction to the larger up trend.

In the bigger picture, a medium term top should be formed at 151.93. Fall from there is correcting larger up trend from 102.58. It's too early to call for bearish trend reversal. But even as a corrective move, such decline should target 38.2% retracement of 102.58 to 151.93 at 133.07, or further to 55 week EMA (now at 130.58).

Positive market sentiment boosts Kiwi, Aussie higher but Canadian is lagging far behind as dragged down by falling oil prices. Sterling is also firm after mixed retail sales data. On the other hand, Swiss Franc and Dollar are following Loonie as the next worst performer for the data. But after all, the greenback are still just engaging in consolidations. Euro and Yen are mixed for now. There shouldn't be any surprises in the final hours of the day, and the picture should pretty much be done.

Technically, NZD/USD is trying to extending the rise from 0.5511 and breached 0.6202 temporary top. Immediate focus is now on 38.2% retracement of 0.7463 (2021 high) to 0.5511 at 0.6257. Rejection by this fibonacci resistance will keep price actions from 0.5511 as a corrective move, and maintains medium term bearishness. However, sustained break of 0.6257 will add too the case of bullish trend reversal. We'd probably find out next week.

In Europe, at the time of writing, FTSE is up 0.87%. DAC is up 1.18%. CAC is up 1.27%. Germany 10-year yield is up 0.019 at 2.041. Earlier in Asia, Nikkei dropped -0.11%. Hong Kong HSI dropped -0.29%. China Shanghai SSE dropped -0.58%. Singapore Strait Times dropped -0.42%. Japan 10-year JGB yield rose 0.0050 to 0.254.

ECB Lagarde: We expect to raise rates further

ECB President Christine Lagarde said in a speech, "the ECB will ensure that a phase of high inflation does not feed into inflation expectations, allowing too-high inflation to become entrenched."

"We have acted decisively, raising rates by 200 basis points, and we expect to raise rates further to the levels needed to ensure that inflation returns to our 2% medium-term target in a timely manner," she said.

"But if we want to rebuild our supply capacity and strengthen domestic sources of growth, other policy areas need to refocus. Most importantly, they need to direct investment towards the transitions that will define our future – and the financial sector needs to be able to actively support these transitions," she added.

Bundesbank Nagel: We must resolutely raise key rates further

Bundesbank President Joachim Nagel said, "We must resolutely raise our key rates further and adopt a restrictive stance... We cannot stop here. Further decisive steps are necessary."

"We should start reducing the size of our bond holdings at the beginning of next year by no longer fully reinvesting all maturing bonds," Nagel added.

UK retail sales volume up 0.6% mom in Oct, sales value up 1.8% mom

UK retail sales volumes rose 0.6% mom in October, above expectation of 0.3% mom. Ex-fuel sales volume was up 0.3% mom, below expectation of 0.6% mom.

In the three months period to October, comparing with the previous three months, sales volume was down -2.4% while ex-fuel sales volume was also down -2.4%, continuing the down trend started since summer 2021.

In value term, headline sales was up 1.8% mom while ex-fuel sales was up 1.0% mom. Comparing the three month periods, headline sales value was down -0.7% while ex-fuel sales value was down -0.1%.

Japan CPI core hits 40-yr high, BoJ Kuroda rules out rate hike

Japan headline CPI rose from 3.0% to 3.7% yoy in October, above expectation of 2.7% yoy. CPI core (all item ex-fresh food) rose from 3.0% to 3.6% yoy, above expectation of 3.5% yoy. That's the highest level in 40 years since 1982. CPI core-core (all item ex-fresh food and energy) rose from 1.8% yoy to 2.5% yoy, above expectation of 1.9% yoy.

BoJ Governor Haruhiko Kuroda said that core inflation was rising "quite a bit" but he expects it to slow back to below 2% in the next fiscal year.

"Raising interest rates now could delay Japan's economic recovery," Kuroda told the parliament. "I'm not saying the BOJ cannot raise rates indefinitely. I'm saying that it's inappropriate to raise rates now, in light of current economic and price developments."

"It's difficult to sustainably achieve our 2% inflation target unless nominal wages rise steadily," Kuroda said. "We'll continue with our monetary easing to support the economy and achieve our 2% inflation target in a sustained, stable fashion backed by wage growth.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 139.15; (P) 139.95; (R1) 141.01; More...

Intraday bias in USD/JPY remains neutral as consolidation from 137.66 temporary low is still in progress. In case of stronger recovery, upside should be limited below 145.16 support turned resistance. On the downside, break of 137.66 will resume the decline from 151.93, to 133.07 fibonacci level, as a correction to the larger up trend.

In the bigger picture, a medium term top should be formed at 151.93. Fall from there is correcting larger up trend from 102.58. It's too early to call for bearish trend reversal. But even as a corrective move, such decline should target 38.2% retracement of 102.58 to 151.93 at 133.07, or further to 55 week EMA (now at 130.58).

Economic Indicators Update

Bundesbank President Joachim Nagel said, "We must resolutely raise our key rates further and adopt a restrictive stance... We cannot stop here. Further decisive steps are necessary."

"We should start reducing the size of our bond holdings at the beginning of next year by no longer fully reinvesting all maturing bonds," Nagel added.

Usually, the Dollar and GOLD are negatively correlated. This means that the stronger the US-Dollar becomes, the lower Gold prices will be as many more investors will prefer liquid investments. Times of crisis and the need to safeguard funds are the major exceptions to this.

Judging from the background above, a bullish bias on the US Dollar could cause a bearish momentum on Gold. However, let's break down the bias a bit further.

XAUUSD

Gold on the Daily timeframe is casually approaching the 200-Day Moving Average after absorbing liquidity from the 1765 price area whilst clearly overbought on the Stochastics Oscillator. It is also important to point out that the Supply zone I have marked out for a possible entry is within the range of 1788 and 1816 price points with initial targets at 1722, 1705, and 1680.

CONCLUSION

It is important to understand that the trading of CFDs comes at a risk; if not properly managed, you may lose all of your trading capital. To avoid costly mistakes while you look to trade these opportunities, be sure to do your own due diligence and manage your risk appropriately.

As I earlier indicated in my article this week, I am expecting an upward push from the Dollar as a reaction from the Demand zone I have marked out. The PPI release earlier moved prices a bit, but lacked sufficient momentum to cause a significant break of structure - and thus, no change of trend. Even though my bias remains the same, however, now I expect the move to begin after price must have completed a divergent move inside the demand zone.

The strong numbers from the Retail Sales reports and the Philly Fed Manufacturing index also did its best to kick-start the expected movement. Let's take a look at a few analyses based on this bias.

EURUSD

The Hourly timeframe on EURUSD presents a clear selling opportunity from the retest of the Demand zone as a completion of the AMD pattern. The break of structure created by the impulse from the PPI figures yesterday is also a significant indication of a likely persistent bearish impulse.

GBPUSD

Daily timeframe on GBPUSD places price right next to a major supply zone that's resting within view of the 200-Day Moving Average. We have also seen the liquidity grab from the horizontal blue line; an added confirmation for a rejection and reversal.

AUDUSD

Even though price is currently trading at the 100-Day moving average, the momentum suggests a likely break above the MA in order to create divergence and also give room for price to recover the imbalance between the 76.4% and 88.2% of the Fibonacci retracement. Once this move has been completed, I will be looking for opportunities to short the market.

CONCLUSION

It is important to understand that the trading of CFDs comes at a risk; if not properly managed, you may lose all of your trading capital. To avoid costly mistakes while you look to trade these opportunities, be sure to do your own due diligence and manage your risk appropriately.

GBPJPY has experienced a steep uptrend since late September, with the price gaining almost 15% and posting a fresh 6½-year high of 172.10. Even though the pair declined moderately from its recent peak, it has been attempting a rebound in the last few daily sessions.

The short-term oscillators are indicating that bullish forces are strengthening. Specifically, the RSI has crossed above its 50-neutral mark, while the stochastic oscillator is ascending near the 80-overbought region.

In the positive scenario, should buying pressures persist, the price could challenge the October resistance of 167.50. Piercing through this region, further advances could come to a halt at the double-top region of 169.08. A break above the latter may then set the stage for the 6½-year high of 172.10.

On the flipside, bearish actions could send the price to test the 50-day simple moving average (SMA), currently at 165.00. Sliding beneath that floor, the bears could aim for the recent support of 163.04. Failing to halt there, the attention could shift to 162.30, which overlaps with the 200-day SMA.

Overall, GBPJPY has been gaining ground after its latest retreat came to a halt. However, a break below the 50-day SMA could spark another pullback

The Euro started a decent increase above the 1.0200 and 1.0280 resistance levels against the US Dollar. The EUR/USD pair gained pace above the 1.0420 level to move into a positive zone.

It tested the 1.0480 zone before there was a correction towards 1.0300. The pair is now rising and trading above the 1.0350 level. It seems to be facing resistance near the 1.0375 and the 50 hourly simple moving average.

The first major resistance is near the 1.0400 level. A break above the 1.0400 resistance level could start a fresh upward move. In the stated case, it could even surpass 1.0450 on FXOpen.

Conversely, the pair might start a fresh decline below 1.0350. The next key support is near 1.0320, below the pair could decline towards the 1.0300 level. Any more losses might send the pair towards the 1.0250 level in the coming sessions.