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The US dollar is gradually moving higher against the Japanese yen currency, ahead of a key speech from Federal Reserve Chair Jerome Powell this afternoon. The USDJPY pair is approaching resistance from a symmetrical triangle pattern, at 114.08, and the important former swing-high, at 114.19. Sellers need to move price below the 113.15 level to change the intraday sentiment surrounding the pair.

The USDJPY pair is strongly bullish while trading above the 114.08 level, key resistance is found at the 114.19 and 114.54 levels.

If the USDJPY pair trades below the 113.15 level, key technical support remains at the 112.60 and 111.23 levels.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.13268
Open: 1.12864
% chg. over the last day: -0.27
Day's range: 1.12670 – 1.12825
52 wk range: 1.1299 – 1.2557

There is the bearish sentiment on the EUR/USD currency pair. The US dollar strengthened against the euro after Fed Vice Chairman, Richard Clarida, said that he supported a procedure for a gradual interest rate rise. Today, investors expect important economic statistics from the United States. Currently, local support and resistance levels are 1.12650 and 1.13000, respectively. Positions should be opened from these marks. Quotes have the potential for further decline.

The news feed on 28.11.2018:

Preliminary data on the US GDP at 15:30 (GMT+2:00);

Report on new home sales in the US at 17:00 (GMT+2:00).

We also recommend paying attention to the speech by Fed Chairman Powell.

Indicators point to the power of sellers: the price has fixed below 50 MA and 200 MA.

The MACD histogram is in the negative zone and continues to decline, which gives a strong signal to sell EUR/USD.

Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates the bearish sentiment.

Trading recommendations

Support levels: 1.12650, 1.12300
Resistance levels: 1.13000, 1.13300, 1.13700

If the price fixes below 1.12650, a further drop in the EUR/USD quotes is expected. The movement is tending to 1.12300-1.12000.

An alternative may be the EUR/USD currency pair growth to the level of 1.13300-1.13500.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.28059
Open: 1.27415
% chg. over the last day: -0.72
Day's range: 1.27329 – 1.27533
52 wk range: 1.2662 – 1.4378

Yesterday, the bearish sentiment was observed on the GBP/USD currency pair. Quotes fell by almost 80 points. The British pound is under pressure after the new Brexit deal has been criticized. Currently, the local support and resistance levels are 1.27300 and 1.27750, respectively. Positions should be opened from these marks. The trading instrument has the potential for further decline.

Today the publication of important economic reports from the UK is not planned.

Indicators point to the power of sellers: the price is being traded below 50 MA and 200 MA.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell GBP/USD.

Stochastic Oscillator is in the neutral zone, the %K line has crossed the %D line. There are no signals.

Trading recommendations

Support levels: 1.27300, 1.27000
Resistance levels: 1.27750, 1.28000, 1.28300

If the price fixes below the support level of 1.27300, a further drop in the GBP/USD quotes is expected. The movement is tending to 1.27000-1.26700.

An alternative may be the GBP/USD currency pair recovery to the round level of 1.28000.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.32504
Open: 1.32922
% chg. over the last day: +0.35
Day's range: 1.33200 – 1.33316
52 wk range: 1.2248 – 1.3387

The bullish sentiment prevails on the USD/CAD currency pair. During yesterday's and today's trading sessions, quotes have risen by more than 70 points. At the moment, the key support and resistance levels are 1.33000 and 1.33350, respectively. Positions should be opened from these marks. We recommend paying attention to the economic reports from the United States.

The news feed on the economy of Canada is calm.

Indicators point to the power of buyers: the price is being traded above 50 MA and 200 MA.

The MACD histogram is in the positive zone, above the signal line, which gives a strong signal to buy USD/CAD.

The Stochastic Oscillator is located near the overbought zone, the %K line is crossing the %D line. There are no accurate signals.

Trading recommendations

Support levels: 1.33000, 1.32700, 1.32400
Resistance levels: 1.33350, 1.33500

If the price fixes above the resistance level of 1.33350, it is necessary to consider purchases of USD/CAD. The movement is tending to 1.33500-1.33800.

Alternative option. If the price fixes below the round level of 1.33000, we recommend looking for entry points to the market to open short positions. The movement is tending to 1.32700-1.32500.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 113.566
Open: 113.766
% chg. over the last day: +0.18
Day's range: 113.823 – 113.846
52 wk range: 104.56 – 114.74

The USD/JPY currency pair continues to show positive dynamics. At the moment, quotes are consolidating. Local support and resistance levels are 113.700 and 113.900, respectively. The trading instrument has the potential for further growth. Economic reports from the US, as well as the speech by the Fed chairman, are in the focus of attention.

Publication of important economic reports from Japan is not planned.

Indicators point to the power of buyers: the price has fixed above 50 MA and 200 MA.

The MACD histogram is in the positive zone, but below the signal line, which gives a strong signal to buy USD/JPY.

Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates the bearish sentiment.

Trading recommendations

Support levels: 113.700, 113.450, 113.200
Resistance levels: 113.900, 114.100

If the price fixes above the local resistance of 113.900, further growth of the USD/JPY quotes is expected. The movement is tending to 114.100-114.300.

An alternative may be the USD/JPY currency pair correction to 113.500-113.300.

The US currency strengthened against a basket of major currencies after Fed Vice Chairman, Richard Clarida, said that he supported a procedure for a gradual interest rate rise. At the same time, the official is concerned about inflation expectations. The US dollar index (#DX) closed in the positive zone (+0.31%).

Today, important economic statistics from the United States, as well as the speech by the Fed Chairman, Powell, are in the focus of attention.

The British pound is under pressure after the new Brexit deal has been criticized. The US President, Donald Trump, said that the agreement reached was beneficial only to the European Union, while the UK could face difficulties. Trump also noted that this agreement could prevent the UK from developing trade with the United States. Former British Secretary of State for Defence, Michael Fallon, also spoke negatively about the agreement.

The "black gold" prices have started to recover. At the moment, futures for the WTI crude oil are testing the mark of $52.20 per barrel. At 17:30 (GMT+2:00), a report on weekly crude oil inventories will be published in the US.

Market Indicators

• Yesterday, the bullish sentiment was observed in the US stock market: #SPY (+0.34%), #DIA (+0.45%), #QQQ (+0.34%).
• The 10-year US government bonds yield has become stable. Currently, the indicator is at the level of 3.05-3.06%.

The news feed on 2018.11.28:

• Preliminary data on the US GDP at 15:30 (GMT+2:00);
• Report on new home sales in the US at 17:00 (GMT+2:00).
• We also recommend paying attention to the speech by Fed Chairman Powell.

Besides the Italian budget story and Brexit, preliminary inflation readings out of the Eurozone are highly likely to spark volatility in the euro this week, affecting opinion about whether a rate hike by the European Central Bank is appropriate next year. The report is due on Friday at 1000 GMT, with investors estimating some weakness in the headline Consumer Price Index (CPI). On the other hand, the core measure is expected to gain momentum, though within a familiar field.

Consumer prices across the 19-member eurozone bloc surged by 2.2% year-on-year in October in line with expectations thanks to elevated oil prices, reaching the highest rate in almost six years. During November, oil has experienced a sharp sell-off and analysts are now seeing inflation returning to 2.0%. In the absence of food and energy, however, the core equivalent is projected to edge back up to 1.3% y/y from 1.2% registered in the preceding month, an unbreakable level since 2013.

While this messages that inflation has been resilient despite fragilities in the euro economy, the number is still far below the ECB’s 2.0% price target, hinting that the goal achievement might be a long process and hence plans for a rate hike as soon as next year might come under second thought in subsequent months. Note that initial inflation expectations reported through the PMI survey and first estimates on consumer confidence measured by the European Commission appeared at the lowest in more than a year in November. It is also worth mentioning that the Eurozone’s GDP growth in Q3 was the lowest since the end of 2016. Declining government bond yields in Germany as well as in other EU economies are another evidence that investors do not see stronger inflationary pressures on the horizon yet.

The quantitative easing program, which stimulates the economy by buying government bonds, is on track to end in December, the ECB chief Mario Draghi confirmed on Monday, highlighting that the decision remains subject to upcoming data. Having said that, he also reiterated that the Bank will continue to support markets by reinvesting cash from maturing bonds for an extended period after the Bank stops adding to its 2.6 trillion euro asset purchase program. On the interest rate front, he remained hopeful that a tighter labour market will help inflation to pick up and thus a rate hike could be delivered by the end of next year.

But markets are no longer fully convinced of the ECB’s guidance given the persisting weakness in data, US tariff threats on EU cars and the political noise in Italy, whilst the UK’s departure from the EU in March is considered another headache for business operations in the bloc. Still, if CPI figures beat expectations on Friday, displaying a stronger inflation, chances for a rate hike may improve, driving the euro even higher in the aftermath, especially if a lower than projected unemployment rate accompanies the CPI release – analysts believe that the unemployment rate has inched down by 0.1 percentage points to 8.0% in October, a level not seen since January 2009.

The euro has been printing lower highs and lower lows against the greenback from mid-September onwards mainly due to the Italian budget woes, falling as low as 1.1213 on November 12. An upside surprise in the CPI numbers – particularly in the core measure – is highly likely to support the common currency, with resistance probably coming first around 1.1350, the 23.6% Fibonacci of the downleg from 1.1814 to 1.1213. Steeper increases may also meet obstacles between the 38.2% Fibonacci of 1.1440 and the 50% Fibonacci of 1.1512.

On the other hand, a weaker inflation may boost speculation that the ECB may turn more cautious in its forward guidance on rates, pressuring the euro towards the 1.1200 round level. Below that mark, traders could look for support between 1.1118 and 1.1050

It’s worth cautioning though, that any headlines regarding Brexit, the Italian budget proposals and trade tensions could disrupt movements in the market.

EURUSD bear pressure builds up towards 1.1215 zone as it looks to extend its weakness. Support stands at the 1.1200 where a break will aim at the 1.1150 level. A break below here will target the 1.1100 level. Further down, support lies at the 1.1050. On the upside, resistance comes in at 1.1350 level with a break through there opening the door for further upside towards the 1.1400 level. Further up, resistance comes in at the 1.1450 level where a violation will expose the 1.1500 level. All in all, EURUSD continues to face downside pressure.

EUR/USD

Current level - 1.1288

Intraday allow a dip to 1.1260, before reversal and bounce higher, within the third part of the consolidation pattern above 1.1210 low. A break through 1.1210 will clearly state, that the general downtrend has kicked in and a massive sell-off will challenge 1.0850.

Starting from 29th of November until 31st of December, the daily analyses will be published by our dealing department.

USD/JPY

Current level - 113.86

The uptrend is intact, with an initial support at 113.70 and crucial low at 113.40. While below 114.20, there is still a chance for a final swing to 112.60, before breaking beyond 114.50, towards 120.00 sentiment area.

GBP/USD

Current level - 1.2746

Still bearish below 1.2800 resistance. for a tight test of 1.2690 area. While above 1.2660 lows, I favor a final wave to 1.3040 to complete the prolonged consolidation and the gather steam for a massive slide towards 1.2000 area.

EURJPY has been trading within a consolidation area over the last couple of weeks, with upper boundary the 129.00 resistance barrier, and the 127.80 support level. Technically, in the 4-hour chart, the RSI indicator is moving slightly lower below the threshold of 50, and the ROC indicator slipped below the zero line, suggesting more losses in the trading range.

If prices drop below the 128.32 mid-level of the channel, they could re-test the 127.80 hurdle. More bearish pressures could shift the outlook from neutral to negative and send prices until the 127.50 support, identified by the low on November 13 and then towards the 127.25 trough.

Alternatively, if the market manages to turn to the upside and overcome the 20- and 40-simple moving averages (SMAs), resistance could be met at the upper boundary of 129.00. A clear run above this strong area, the pair could touch the 129.64 barrier, taken from the inside swing bottom of November 8.

Concluding, the market is expected to hold neutral in both the short-term and medium-term.

Cable moves within narrow consolidation in early Wednesday's trading and just above strong support at 1.2722 (15 Nov low) which was approached on Tuesday's strong fall (sterling was down 0.65% for the day).

Signals that US President Trump is on track for tariff hike boosted demand for safe-haven dollar that weakened pound's sentiment.

Another factor that could further weaken sterling is growing fears that UK parliament may reject to verify the latest agreement between the EU and UK, which could lead to chaotic scenario on no-deal Brexit.

Bearish techs on daily chart support the notion, with consolidation expected to hold below falling 10SMA (1.2804) ahead of fresh weakness.

Violation of 1.2722 would expose 1.2695/1.2700 double-bottom (30/31 Oct) which guards 2018 low at 1.2661, break of which would spark significant downside.

Res: 1.2761, 1.2804, 1.2831, 1.2863
Sup: 1.2722, 1.2695, 1.2661, 1.2582

Conflicting signals over the direction of trade between the world’s two largest economies are poised to place investors on an emotional rollercoaster ride ahead of this weekend’s G20 meeting.

It was only on Monday US President Donald Trump stated that he was “highly unlikely” to suspend planned increases to existing tariffs on Chinese goods. One day later, White House economic adviser Larry Kudlow expressed optimism that a trade deal between the United States and China was still a possibility. With Trump’s remarks clashing head-on with Kudlow’s positive comments, the US administration is clearly adopting a classical good cop, bad cop strategy leading up to trade talks. Will this method work with China? This is the question on the mind of many market players.

In a perfect world, the best-case scenario for financial markets will be for both sides to find a middle ground on trade and secure a breakthrough deal. However, this outcome is highly unlikely with investors closely observing for any display of co-operation or interest in further negotiations to ease trade tensions. The worst-case scenario for markets will be if talks descend into disagreements on trade which may fuel fears over a trade war between the United States and China becoming reality.

Dollar remains the king of the hill

Dollar strength is set to remain a dominant market theme this week thanks to renewed trade tensions and expectation of higher US interest rates.

Buying sentiment towards the Dollar brightened yesterday following hawkish remarks from Fed-Vice Chair Richard Clarida while uncertainty over trade fueled upside gains. Investors will be keeping a close eye on the pending second estimate of third-quarter GDP growth figures to gauge the health of the US economy. There will be a special focus on Fed Chair Jerome Powell’s speech, which will most likely be closely scrutinized for clues on how many more times the Fed plans to raise rates in 2019. If Powell strikes a hawkish note, the Dollar Index has the potential to rally towards 98.00.

Another painful day for the British Pound?

The story defining the British Pound’s painful depreciation continues to revolve around Brexit-related uncertainty and political drama in Westminster.

Matters could be worsened for the Pound if today’sUK Treasury’s Brexit forecast-paints a very gloomy outlook for the UK economy post Brexit. Some parts of the Treasury report have already been leaked by the Telegraph this morning with the UK seen to be £150bn worse off under a no-deal. With GDP also projected to be 7.6% lower under a no-deal scenario over a 15-year period, things could get very messy to the run-up of the official Brexit deadline.

In regards to the technical picture, the GBPUSD is firmly bearish on the daily charts with bears eyeing the 1.2700 level.

Commodity spotlight – Gold

Gold was treated without mercy by an aggressively appreciating Dollar yesterday with prices sliding towards the $1,212 level.

The heavily bearish price action witnessed on the yellow metal confirms how its trajectory remains heavily influenced by the Dollar’s performance and US rate hike expectations. With the Dollar likely to remain supported by safe-haven flows and expectations of a rate hike in December, Gold is likely to witness further downside. Sustained weakness below $1,214 could inspire a move back towards the psychological $1,200 level.

XAUUSD (1214.65): Gold prices extended the declines strongly after a few sessions of trading flat. The declines came as price broke past the support level at 1223.50 pushing prices lower. For the moment, the precious metal seems to be bouncing off the temporary support mentioned at 1213.50. A reversal off this level could drive gold prices back to testing the 1223.50 where resistance could be established. Alternately, a break down below 1213.50 could trigger further declines down to the 1204.08 level