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Cable trades in narrow-range directionless mode on Friday and holding within larger range which extends into third straight week and on track to end the third week in Doji candle.

Quiet mode comes after bumpy ride in past three days, driven by news from Brexit and Fed, with focus turning towards G20 meeting over the weekend, which could be a catalyst.

Daily techs show mixed signals as MA’s remain in bearish setup while momentum is strengthening.

Initial bullish signal could be expected on sustained break above 10SMA (1.2807) which would open 1.2850 (tops of Thu/Wed) but stronger bullish signal could be expected on firm break above range top at 1.2927.

Conversely, eventual break below 1.2722/25 lows, where near-term base is forming, would generate initial bearish signal and expose key supports at 1.2695 (30Oct low) and 1.2661 (2018 low).

Res: 1.2807, 1.2849, 1.2889, 1.2927
Sup: 1.2755, 1.2722, 1.2695, 1.2661

The Brent crude oil has been depreciating since the beginning of October after the commodity reversed from a three-year high level at 86.66.

The Brent.CMD/USD crude oil price was trading near a resistance cluster formed by the combination of the 50-hour simple moving average and the traditional weekly pivot point at 61.79 during the morning hours of Friday's trading session. Technical indicators are in favour of a decline within this session.

If the resistance level as mentioned above holds, a breakout through the lower boundary of the given channel pattern is likely to occur in the nearest future.

The possible downside target will be the psychological support level at 55.00.

The LIGHT.CMD/USD pair has been moving in a descending channel since the commodity price reversed from its upper boundary at 76.88.

As shown on the chart, the Light crude oil is testing the weekly pivot point and the 50-hour simple moving average at 52.81 during the morning hours of today's session.

If this resistance level holds, it is expected that the commodity price aims for the lower boundary of the descending channel pattern at 47.72 during the following sessions.

However, if the price passes the resistance level as mentioned above, the pair could target the upper boundary of the channel pattern at 55.30.

The Euro consolidates under new one week high at 1.1401 in early Friday’s trading, as strong two-day rally is taking a breather after failing to close above cracked pivotal Fibo barrier at 1.1393 (61.8% of 1.1472/1.1267) on Thursday.

Near-term structure remains bullish and maintains strong momentum, but requires sustained break above 1.1393 to open way towards initial barriers at 1.1404 (trendline resistance) then 1.1423/33 (Fibo 76.4% / 22 Nov high) and unmask 1.1472 (20 Nov high / 55SMA).

Weak German retail sales (Oct -0.3% vs 0.4% f/c) impacted immediate bulls, with EU CPI (Nov y/y 2.1% f/c vs 2.2% prev) being the highlight of European session and speech of Fed’s Williams focused in American session for fresh signals.

Supports at 1.1360/55 (20SMA / top of thick hourly cloud) are expected to ideally contain dips and maintain bullish bias, while extended downticks would put bulls on hold.

Weekend’s Trump / Xi meeting is the key event and expected to provide strong direction signals.

Res: 1.1404, 1.1433, 1.1472, 1.1500
Sup: 1.1360, 1.1334, 1.1318, 1.1299

During Thursday's trading session, the currency exchange pair broke the resistance of the 200-hour SMA to end the trading session at 1.1389. During Friday morning hours, the rate was trading between the monthly pivot point and the weekly pivot point at the 1.1391 mark.

In regards to the near-term future, most likely, the currency exchange rate will surge upwards to meet the upper boundary of the descending large pattern line at 1.1413 to bounce off to trade at the previously drawn pattern.

However, the European Single Currency could pass through the resistances of the large pattern line and the monthly PP to trade near the weekly R1 at 1.1420 level.

During Thursday's trading session, the currency exchange rate was resisted by the 100-hour SMA to end the trading session at the 1.2781 mark. During Friday morning hours, the British Pound was resisted by the 55-hour and the 100-hour SMAs to trade at the 1.2781 mark.

In regards to the near-term future, most likely, the currency exchange rate will move downside due to the resistances of the 55-hour and the 100-hour SMAs which should push the British Pound to trade below the weekly S1 at 1.2750 mark.

On the other side, the rate might get supported by the weekly S1 at 1.2750 which could help the British pound to stay at previously drawn ascending medium pattern to trade at 1.2760 level during the trading session on Friday.

During Thursday's trading session, the currency exchange rate broke the weekly R1 at 113.36 to end the trading session at the 113.37 mark. On Friday morning, the US Dollar was located near the weekly R1 at 113.36 to trade at the 113.39 mark.

In regards to the near-term future, it is expected that the US Dollar will trade sideways to stay near the weekly R1 at 113.36 due to the strong resistance and the support levels of the technical indicators. Most likely, the currency exchange pair will be trading at the 113.40 level during the trading day.

On the other side, the stronger support level of the 200-hour SMA could help the rate to break the resistance of the 55-hour SMA to push the rate to trade at 113.60.

During Thursday's trading session, the yellow metal broke the 61.80 % Fibonacci retracement level to trade above the technical indicator. Afterwards, the gold depreciated against the US Dollar to end the trading session at 1,224.03. During Friday morning hours, the yellow metal was located at 1,224.31 mark.

In regards to the near-term future, most likely, the yellow metal will trade upwards to break the 61.80% Fibo at 1,225.59 due to the supports of the simple moving averages. It is expected that the gold will be trading at the 1,228.00 level on Friday.

On the other side, if the US Dollar will appreciate against the gold, the yellow metal could pass through the supports of the SMAs to trade at 1,218.00 level.

The G20 Summit is about to kick start in Buenos Aires, Argentina, today and world leaders have started to arrive. In the summit a number of issues are to be discussed, including the future of work, economic sustainability, climate change and digital economy. On the sidelines of the summit, important meetings are to take place, with the highlight being the Trump-Xi meeting. The two leaders are expected to discuss the tensions in the US-Sino trade relationships and should there be a positive outcome we could see risk sentiment returning to the markets. Also on the sidelines, US president Trump is expected to meet Russian president Putin to discuss the situation in the Middle East and Ukraine. A meeting between Russian president Putin and Saudi Prince Mohammed bin Salman, could have an effect on oil prices, ahead of the OPEC meeting on the 6th of December in Vienna. We wouldn’t be surprised to see the Russian and Saudi energy minister exchanging notes on possible oil production cut levels. The summit could have an effect on a number of currencies, however the USD may experience increased volatility.

USD/JPY remained rather stable yesterday, testing the 113.25 (S1) support line. We could see the pair’s direction being influenced by any headlines regarding the G20 Summit. Should the bears take over, we could see the pair breaking the 113.25 (S1) support line and aim for the 112.72 (S2) support barrier. Should on the other hand the bulls take over we could see the pair breaking the 113.95 (R1) resistance level.

Pound weakens as Theresa May insists that no extension will be given to Brexit deadline

The pound weakened yesterday against the USD, as market worries intensified for a hard Brexit. UK’s PM, Theresa May stated that any extension of the Brexit deadline in March, would cause the negotiations to restart and that she is not willing to seek any extension. Also, she stated that she remains focused on passing the deal through the UK parliament on the 11th of December and not on the alternatives. A rejection of the deal by the UK parliament seems more than possible at the moment, as no majority is currently available for the deal to pass. We expect the pound to remain under pressure today, as further Brexit headlines are expected.

Cable dropped yesterday testing the 1.2780 (S1) support line. Should the pound remain under pressure, or should there be further negative headlines about Brexit, we could see the pair experiencing some bearish tendencies and vice versa. If the market favors the pair’s long positions, we could see it reaching if not breaking the 1.2850 (R1) resistance line and aim for higher grounds. Should on the other hand, the pair come under the market’s selling interest, we could see the pair, breaking the 1.2780 (S1) support line and aim if not break the 1.2700 (S2) support area.

In today’s other economic highlights:

On a busy Friday, in the European session, we get Germany’s retail sales growth rate for October, UK’s house prices growth rate for November, France’s preliminary CPI (EU Normalised) for November, Eurozone’s preliminary headline and core HICP rates for November as well as Eurozone’s unemployment rate for October. In the American session we get Canada’s GDP growth rates for September and Q3 and later on the US Baker Hughes oil rig count. As for speakers ECB’s Yves Mersch will be speaking.

GBP/USD H4

Support: 1.2780(S1), 1.2700 (S2), 1.2630 (S3)

Resistance: 1.2850 (R1), 1.2920 (R2), 1.3000 (R3)

USD/JPY H4

Support: 113.25 (S1), 112.72 (S2), 112.15 (S3)

Resistance: 113.95 (R1), 114.50 (R2), 115.10 (R3)

With the Federal Reserve expected next month to raise rates to what some U.S. central bankers believe is at or near a neutral level, Chairman Jerome Powell is retuning his message to signal a more cautious approach on further rate hikes next year. It is not clear whether the idea of perhaps nudging rates above neutral, as he had earlier suggested, is still on the table, or if it means he expects fewer rate hikes, or even a pause. But minutes from the Fed’s Nov. 7-8 policy-setting meeting, released on Thursday, as well as remarks over the last two weeks, point to a reassessment of the Fed’s longstanding promise of “further gradual rate increases” that would extend two years of nearly uninterrupted quarterly tightening.

The transition comes as the Fed’s target policy rate, left at 2 percent to 2.25 percent in November, grinds closer to the 2.5 percent to 3.5 percent range of Fed officials’ views of where a rate that neither boosts nor cools a healthy economy lies. Back in August, Powell had rejected a too rigid reliance on an abstract guidepost like the neutral rate to shape policy, saying it could lead to costly mistakes. Yet he has kept talking about it.

There are many reasons why Powell would pick now to begin shifting his footing. Since a September news conference when he painted a rosy picture of where things stood, some economic indicators have softened; others, such as wage growth, have firmed, leaving the Fed for the first time in a long time pulled in different directions. Then there is President Donald Trump, who has berated him for raising rates. And Powell’s own communications plans to end each meeting with a news conference starting next year mean he needs a clear message for each meeting, starting next month.