Sample Category Title

Daily Pivots: (S1) 1.0278; (P) 1.0319; (R1) 1.0366; More...

EUR/USD's rally from 0.9534 continues today and intraday bias stays on the upside. Next target is 1.0609 fibonacci level. On the downside, below 1.0270 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.

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) 1.1703; (P) 1.1766; (R1) 1.1821; More...

GBP/USD's rise from 1.0351 resumed after brief retreat and intraday bias is back on the upside. With break of 61.8% projection of 1.0351 to 1.1494 from 1.1145 at 1.1851, next target will be 100% projection at 1.2288. On the downside, break of 1.1708 minor support will turn intraday bias neutral and bring consolidation again, before staging another rally.

In the bigger picture, current development suggests that rise from 1.0351 is a medium term bottom. Rise from there is at least correcting whole down trend from 1.4248 (2021 high). Further rise is expected as long as 1.1145 support holds. Sustained break of 38.2% retracement of 1.4248 to 1.0351 at 1.1840 should pave the way to 61.8% retracement at 1.2759 and possibly above.

Dollar selloff resumes today on the back of extended rally in the stock markets and decline in treasury yields. Selloff in particularly apparent against Euro and Sterling, and to a slightly lesser extent Aussie. Yen also manages to resumes recent rally against the greenback. But Swiss Franc is lagging behind, as dragged down by selloff against other Europeans.

Technically, Sterling appears to have an advantage over Euro, with EUR/GBP dipping today. Break of 0.8689 minor support will likely resume the fall from 0.9267 through 0.8570 low. Nevertheless, firstly, the cross will have too take out mentioned 0.8689 minor support first. Secondly, the Pound will also face some tests from economic data release, and more importantly, the government's new budget later in the week.

In Europe, at the time of writing, FTSE is up 0.33%. DAX is up 0.88%. CAC is up 1.09%. Germany 10-year yield is down -0.062 at 2.084. Earlier in Asia, Nikkei rose 0.10%. Hong Kong HSI rose 4.11%. China Shanghai SSE rose 1.64%. Singapore Strait Times rose 0.44%. Japan 10-year JGB yield rose 0.0012 to 0.244.

US PPI at 0.2% mom, 8.0% yoy in Oct

US PPI for final demand rose 0.2% mom in October, below expectation of 0.5% mom. Prices for goods rose 0.6% mom while services dropped -0.1% mom. PPI less foods, energy and trade services rose 0.2% mom.

For the 12 months period, PPI slowed from 8.4% yoy to 8.0% yoy. PPI less foods, energy, and trade services rose 5.4% yoy.

Also released, Empire State manufacturing index rose sharply from -9.1 to 4.5 in November, above expectation of -7.

German ZEW rose sharply to -36.7, related to hope that inflation will fall soon

Germany ZEW Economic Sentiment rose from -59.2 to -36.7 in November, much better than expectation of -54.1. Current Situation index rose from -72.2 to -64.5, above expectation of -67.5.

Eurozone ZEW Economic Sentiment rose from -59.7 to -38.7, above expectation of -55.0. Current Situation index rose 5.5pts to -65.1.

"The ZEW Indicator of Economic Sentiment rises again in November. This is likely to be related above all to the hope that inflation rates will fall soon. In this case, policymakers would not have to hit the brakes on monetary policy as hard and/or for as long as feared. However, the economic outlook for the German economy is still clearly negative," comments ZEW President Professor Achim Wambach.

Eurozone goods exports rose 23.6% yoy in Sep, imports rose 44.5% yoy

In September, Eurozone goods exports, to the rest of the world, grew 23.6% yoy to EUR 210.1B. Goods imports rose 44.5% yoy to EUR 294.0B. Goods trade deficit came in at EUR -34.4B. Intra-Eurozone trade rose 27.3% yoy to EUR 247.6B.

In seasonally adjusted terms, Eurozone exports rose 1.6% mom to EUR 250.0B. Imports dropped -2.0% mom to EUR 287.7B. Trade deficit narrowed from EUR -47.6B to EUR -37.7B. Intra-Eurozone trade dropped from EUR 241.8B to EUR 238.9B.

According to the second estimate, Eurozone GDP grew 0.2% qoq in Q3, slowed from Q2's 0.8% qoq. Employment grew 0.2% qoq, slowed from Q2's 0.4% qoq.

UK payrolled employees rose 74k in Oct, unemployment rate at 3.6% in Sep

In October, UK payrolled employees rose 0.2% mom or 74k. Comparing with October 2021, payrolled employees rose 2.7% yoy or 772k. Median monthly pay rose 6.0% yoy. Claimant counts rose 3.3k, versus expectation of -12.6k.

In the three months to September, comparing to the previous three month period, unemployment was down -0.2% to 3.6%. Employment rate was unchanged at 75.5%. Economic inactivity rate rose 0.2% to 21.6%. Average earnings excluding bonus rose 5.7% yoy. Average earnings including bonus rose 6.0% yoy.

RBA minutes: Not ruling out returning to larger hikes

Minutes of RBA's November 1 meeting revealed that board members consider both a 25 bps or a 50bps rate hike. There were "arguments in favour of both courses of action", but the case for 25bps was stronger.

"Acknowledging the uncertainty, members did not rule out returning to larger increases if the situation warranted," the minutes noted. "Conversely, the Board is prepared to keep rates unchanged for a period while it assesses the state of the economy and the inflation outlook. Interest rates are not on a pre-set path."

At the meeting, RBA raised the cash rate target by 25bps to 2.85%.

Japan GDP contracted -0.3% qoq in Q3

Japan GDP contracted -0.3% qoq in Q3, much worse than expectation of 0.3% qoq. In annualized term, GDP contracted -1.2%, versus expectation of 1.1%. GDP deflator dropped -0.5% yoy, versus expectation of -0.2% yoy.

During the quarter, imports rose strongly by 5.2% yoy on higher energy costs and weak Yen exchange rate. Exports grew only 1.9% qoq and led to a decline in net exports, which dragged GDP down. Domestically, private consumption grew 0.3% qoq only.

"Increased imports due to the easing of supply constraints and a temporary increase in payments for external services contributed to the negative growth," Chief Cabinet Secretary Hirokazu Matsuno said.

"The environment surrounding households and businesses is becoming more difficult, with declining real household incomes and rising corporate costs," Matsuno added.

China retail sales contracted -0.5% yoy in Oct

China industrial production rose 5.0% yoy in October, below expectation of 5.2% yoy. Retail sales dropped -0.5% yoy, much worse than expectation of 1.0% yoy. That's also the first decline since May. Fixed asset investment rose 5.8% ytd yoy, below expectation of 5.9%.

"We will focus on expanding effective demand, deepening structural reform on the supply side, continuing to stabilise employment and prices, stabilizing expectations, stimulating market vitality more, consolidating the economic recovery to a sound basis, and try to achieve better development results," the NBS said in a statement.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1703; (P) 1.1766; (R1) 1.1821; More...

GBP/USD's rise from 1.0351 resumed after brief retreat and intraday bias is back on the upside. With break of 61.8% projection of 1.0351 to 1.1494 from 1.1145 at 1.1851, next target will be 100% projection at 1.2288. On the downside, break of 1.1708 minor support will turn intraday bias neutral and bring consolidation again, before staging another rally.

In the bigger picture, current development suggests that rise from 1.0351 is a medium term bottom. Rise from there is at least correcting whole down trend from 1.4248 (2021 high). Further rise is expected as long as 1.1145 support holds. Sustained break of 38.2% retracement of 1.4248 to 1.0351 at 1.1840 should pave the way to 61.8% retracement at 1.2759 and possibly above.

Economic Indicators Update

US PPI for final demand rose 0.2% mom in October, below expectation of 0.5% mom. Prices for goods rose 0.6% mom while services dropped -0.1% mom. PPI less foods, energy and trade services rose 0.2% mom.

For the 12 months period, PPI slowed from 8.4% yoy to 8.0% yoy. PPI less foods, energy, and trade services rose 5.4% yoy.

Full release here.

The British pound has reversed directions on Tuesday and posted sharp gains. In the European session, GBP/USD is trading at 1.1902, up 1.22%. The pound has punched above 1.19 for the first time since August 19th.

UK wage growth a headache for BOE

The UK employment report was soft, with unemployment ticking higher to 3.5%, up from 3.4%. Unemployment rose by 3.3 thousand, down from 3.9 thousand but well off the consensus of -12.6 thousand. The BoE will be most concerned about the increase in wage growth, which will create even more inflation, at a time when inflation is above 10%. Wages excluding bonuses rose to 5.7%, up from 5.5% and ahead of the consensus of 5.6%. There isn’t much slack to speak of in the labour market and the BoE will be under pressure to continue hiking aggressively, even though this will hurt the struggling UK economy.

The Fed may be breathing a bit easier today, as the exuberance which sent the stock markets flying last week appears to have subsided. Investors jumped all over the soft inflation report, as risk sentiment soared and the US dollar retreated. Fed members have responded by sticking to a hawkish script, as any dovish signals could complicate its battle to bring down inflation. Fed Vice Chair Brainard said on Monday that she favored slowing the pace of rate hikes, but that further hikes were required in order to bring down inflation.

Brainard’s stance was echoed by Fed member Waller who said that while the Fed may ease up on the size of future rate hikes, it should not be seen as a “softening” in its fight against inflation. Waller added that the 7.7% inflation reading in October was “enormous”, a possible rebuke of the exuberance shown by investors to the drop in inflation.

GBP/USD Technical

• GBP/USD has broken through several resistance lines today. The next resistance lines are 1.2030 and 1.2224
• 1.1703 and 1.1648 are providing support

The Australian dollar rose to two-month high on Tuesday, in extension of the latest strong bullish acceleration, lifted by renewed risk sentiment on significantly weaker US dollar.

The pair is running on extended third wave of five-wave cycle from 0.6170 (Oct 13 low) which hit 138.2% Fibonacci expansion (0.6762), also Fibo 61.8% retracement of 0.7136/0.6170 descend.

Another bullish signal was generated on today’s break above descending thick daily cloud.

Bulls need a clear break of 0.6762 barrier to open way towards targets at 0.6845/0.6908 (FE 161.8%/Fibo 76.4% retracement, respectively).

Daily Tenkan-sen and Kijun-sen in bullish setup and strong bullish momentum underpin the action, though strongly overbought stochastic warns that bulls may take a breather in coming sessions.

Dip-buying remains favored, ideally above broken 100DMA/daily cloud top at 0.6700 zone, but deeper pullback cannot be ruled out, with significant supports seen at 0.6653 (broken Fibo 50% retracement) and 0.6600 (lower 20-d Bollinger band).

Res: 0.6805; 0.6845; 0.6908; 0.6956.
Sup: 0.6698; 0.6653; 0.6600; 0.6539.

It is general knowledge that the Major currency pairs are pairs that have the US Dollar as either the base or quote currency. As a result, our trade ideas for major pairs will begin first with an analytical review of the US Dollar chart.

As you can see from the chart above, the US Dollar on the Daily timeframe has broken below the 100-Day Moving Average and is expected to reach the 200-Day average as its next target. We also observe the presence of a solid drop-base-rally demand zone resting within the region of the MA. This implies that we can expect a temporary weakness in the Dollar until price reaches the expected area of interest. With the incoming release of the PPI and Empire State Manufacturing Index on Tuesday, I personally will be expecting the figures to favour the Dollar.

EURUSD

The Daily timeframe on EURUSD presents a clear selling opportunity from the retest of the 200-Day Moving Average as well as the drop-base-drop supply zone occurring within the range. It is also noteworthy that we have seen a tentative grab of liquidity right before price taps into our area of interest.

GBPUSD

This week I am expecting GBPUSD to continue its downward trend from the 200-Day moving average. Price will most likely tap into the drop-base-drop supply zone after taking out liquidity from the high marked by the arrowed line. The PPI figures should contribute some volatility to help this play out smoothly.

USDJPY

USDJPY broke below the 100-Day Moving Average and created a divergence. This signifies an impending change of direction which will likely commence from the rally-base-rally demand zone marked by the hollow rectangle. The bias is bullish for the time being once the reaction from the demand zone has been confirmed.

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 a 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.

USDCAD

My expectation from USDCAD can easily be interpreted from the arrow directions. To break it down, however, I am anticipating a sleek drop in prices to the 1.30300 regions for a solid rejection from the drop-base-rally demand zone, and the 200-Day Moving Average confluence.

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.

WTI oil remains in red in early Tuesday’s trading and extends Monday’s strong fall (down 4.1% for the day).

The oil prices came under increased pressure on news of rising Covid cases in China, which revived demand worries and add to downside risk, despite China partially eased its tough Covid rules last week.

Fresh weakness after repeated rejection at psychological $90 barrier extended below narrowing daily cloud on Tuesday that adds to negative signals, as bears pressure Fibo support at $84.22 (76.4% of $81.29/$93.72 upleg.

Daily studies turned bearish, as south-heading 14-d momentum is deeply in the negative territory and moving averages in bearish setup, with Tuesday’s bearish engulfing adding to downside risk.

Clear break of 84.22 Fibo level to expose troughs at $83.00/$82.60 zone, guarding more significant support at $81.29 (Oct 18 higher low) loss of which to confirm a double-top pattern ($93.60/72) and increase downside pressure.

Broken Fibo 61.8% ($86.04) reinforced by converged 5/55 DMA’s, should ideally keep the upside protected.

Res: 85.78; 86.04; 87.23; 88.08.
Sup: 83.04; 82.64; 81.71; 81.29.

Germany ZEW Economic Sentiment rose from -59.2 to -36.7 in November, much better than expectation of -54.1. Current Situation index rose from -72.2 to -64.5, above expectation of -67.5.

Eurozone ZEW Economic Sentiment rose from -59.7 to -38.7, above expectation of -55.0. Current Situation index rose 5.5pts to -65.1.

"The ZEW Indicator of Economic Sentiment rises again in November. This is likely to be related above all to the hope that inflation rates will fall soon. In this case, policymakers would not have to hit the brakes on monetary policy as hard and/or for as long as feared. However, the economic outlook for the German economy is still clearly negative," comments ZEW President Professor Achim Wambach.

Full release here.

In September, Eurozone goods exports, to the rest of the world, grew 23.6% yoy to EUR 210.1B. Goods imports rose 44.5% yoy to EUR 294.0B. Goods trade deficit came in at EUR -34.4B. Intra-Eurozone trade rose 27.3% yoy to EUR 247.6B.

In seasonally adjusted terms, Eurozone exports rose 1.6% mom to EUR 250.0B. Imports dropped -2.0% mom to EUR 287.7B. Trade deficit narrowed from EUR -47.6B to EUR -37.7B. Intra-Eurozone trade dropped from EUR 241.8B to EUR 238.9B.

Full trade balance release here.

According to the second estimate, Eurozone GDP grew 0.2% qoq in Q3, slowed from Q2's 0.8% qoq. Employment grew 0.2% qoq, slowed from Q2's 0.4% qoq.

Full GDP release here.