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Market movers today

On a day with a few data releases, the market will continue to follow any hints from US and Chinese officials ahead of the ever important trade talks at the G20 meeting in Argentina this coming weekend. Market sentiment remains extremely sensitive after the US administration recently signalled its frustration with the Chinese proposals.

Fed Chairman Powell is due to speak at 18.00 CET, which could provide interesting clues about the Fed's view of the US economy and the rate hike intentions in 2019.

Given the sharp fall in oil prices recently, today's number for US crude oil inventories will be of particular interest.

US home sales will also be of interest given the weakening signals from the US housing market, which is one of the only weak spots in the US economy at the moment.

Selected market news

Asian equity markets rose this morning as investors are looking for a breakthrough in the US-China trade dispute and comments from Fed officials on rate hikes. We have had a number of Fed speeches. Fed Vice Chairman Clarida backed the more gradual approach to rate rises and stated that risks 'was less skewed to the downside', while St. Louis Fed President Bullard was more cautious and said the Fed must monitor possible 'cracks' in the recovery, while others called for a more neutral policy and noted there were pockets of distress and that the trade dispute with China was not helping the economy.

The Fed Chairman was also criticised by President Trump for raising rates. Hence, there will be plenty of focus on the speech tonight by Powell.

There has been a modest rise in the oil price as Brent jumped more than 1% in yesterday's trading.

We have a string of ECB speeches today as well as the Bank of England's financial stability report.

Short term Elliott Wave View in Amazon (ticker: AMZN) suggests that the bounce to 1784 ended Cycle degree wave x. Cycle degree wave y is currently in progress lower as a double three Elliott Wave structure. Down from 1784, Primary wave ((W)) ended at 1420 and Primary wave ((X)) bounce is in progress towards 1631.54 – 1712.09 area before the decline resumes. Internal of Primary wave ((W)) unfolded as a zigzag where Intermediate wave (A) ended at 1546.51, Intermediate wave (B) ended at 1624.82, and Intermediate wave (C) ended at 1420.

Internal of Primary wave ((X)) is unfolding as a double three Elliott Wave structure where Intermediate wave (W) ended at 1550 and Intermediate wave (X) ended at 1502.10. Expect the stock to extend higher in Intermediate wave (Y) of ((X)) towards 1631.54 – 1712.09, then as far as pivot at 1784 high stays intact, the stock should extend lower or pullback in 3 waves at least. We don’t like buying the proposed rally.

AMZN 1 Hour Elliott Wave Chart

General Trend:

• Cautious trading generally seen for Shanghai and Hong Kong during morning session
• Nikkei rises as transportation, technology and retail names gain
• Focus remains on upcoming G20 and if consensus will be reached on issues and if US and China will be able to ease trade tensions
• Australian equities lag, financials and resources sector decline
• Australia Q3 construction work done unexpectedly declined, little reaction seen; Q3 GDP data due next week (Dec 5th)
• Fed Chair Powell due to speak in NY later today, ahead of Thursday’s release of the FOMC minutes

Headlines/Economic Data

Japan

• Nikkei 225 opened +0.4%
• 8697.JP Discloses discovered CEO Kiyota has invested in infrastructure fund, which is against JPX rules but not illegal (after the close yesterday)
• (JP) Japan considering taxing car owners based on mileage - Nikkei

Korea

• Kospi opened +0.2%
• (KR) North Korean Leader Kim reportedly has expressed willingness to allow site inspectors into country's main nuclear complex - Yonhap
• (KR) US and North Korea special envoys fail to hold scheduled meeting - press
• (KR) South Korea Dec Business Manufacturing Survey: 71 v 72 prior; Non-Manufacturing Survey: 74 v 75 prior
• (KR) South Korea YTD New foreign direct investment (FDI) pledged $23.04B v $22.94B at the end of 2017 - Yonhap

China/Hong Kong

• Hang Seng opened +0.3%, Shanghai Composite flat
• (CN) Beijing, China sells 12 land sites Monday (record for 1 day) - SCMP
• (CN) China Ambassador to US Cui: doesn't believe anyone in Beijing is thinking seriously about pulling back from US Treasury debt market if trade disputes worsen
• (CN) China PBoC: Issues guidelines on improving management of systemically important financial institutions (SIFIs): To impose additional capital and liquidity requirements on these companies (overnight)
• (CN) China Ambassador: Will retaliate 'in proportion' to any US sanctions over the Muslim Uighurs in Xinjiang
• (CN) China PBoC Open Market Operation (OMO): Skips open market operation v skipped prior (24th straight skip)
• (CN) Bank of China (private bank): Sees 2018 China GDP growth at ~6.6% v~6.7% forecast given in late Sept; 2019 GDP growth seen slowing to ~6.5%

Australia/New Zealand

• ASX 200 opened -0.1%
• (AU) AUSTRALIA Q3 CONSTRUCTION WORK DONE Q/Q: -2.8% V +0.9%E
• (NZ) RBNZ to loosen mortgage lending restrictions beginning Jan 1st; to reduce some mortgage and investor deposit requirements
• (NZ) New Zealand Central Bank (RBNZ) Financial Stability Report: financial system risks have eased, but remain high
• CKA.AU Requested and received resignation of AFO Teuku Juliansyah after completing investigation into financial irregularities and fraudulent activity
• AMP.AU Confirms will have A$415M pretax (A$290M after tax) additional advice remediation provision in H1 results
• (AU) Australia sells A$1.0B v A$1.0B in 2022 bonds; avg yield 2.1794% v 2.1921% prior; bid to cover 4.08x v 6.45x prior
• SML.NZ Likely to lower FY19 forecast for milk prices, cites current market conditions - AGM Statement
• SPK.NZ NZ Govt Communications Security Bureau declines request to use Huawei 5G equipment due to national security concerns
• (NZ) New Zealand Institute of Economic Research(NZIER): Sees GDp to avg 2.8% over the next 5-yrs; affirms expects cash rate to be left unchanged until March 2020 - local press

Other Asia

• (MY) Think tank Malaysian Institute of Economic Research (MIER): Sees Q4 GDP at 4.7-4.8%

North America

• (US) Weekly API Oil Inventories: Crude: +3.5M v -1.5M prior
• (US) Pres Trump: Federal Reserve rate policies are hurting the economy; I’m not even a little bit happy with my selection of Chair Powell - Wash Post

Europe

• (UK) PM May said to have backed down in Brexit disagreement with Parliament, which would allow the Brexit deal to be amended before vote on Dec 11th - press
• (UK) Pres Trump reportedly offered PM May a trade agreement in July but he was rebuffed - UK's Telegraph
• (UK) Nov BRC Shop Price Index Y/Y: +0.1% v -0.2% prior
• (IE) Ireland Fiscal Watchdog: Government medium-term budget plans 'not credible', 2019 budget plans counter to prudent economic management
• (UR) Ukraine President Poroshenko warned he could launch a full scale war; Russia has sharply increased its military presence on their shared border - press

Levels as of 12:50ET

• Hang Seng +0.9%; Shanghai Composite +0.7%; Kospi +0.3%; Nikkei225 +1.1%; ASX 200 -0.1%
• Equity Futures: S&P500 +0.1%; Nasdaq100 +0.2%, Dax +0.0%; FTSE100 +0.0%
• EUR 1.1286-1.1300; JPY 113.73-113.90 ; AUD 0.7223-0.7237;NZD 0.6784-0.6799
• Feb Gold 0.0% at $1,219/oz; Jan Crude Oil +1.1% at $52.14/brl; Feb Copper +0.7% at $2.76/lb

EUR/USD faced a solid resistance near 1.1425 and declined below 1.1325. USD/JPY traded higher recently and moved in a bullish zone above 113.20.

Important Takeaways for EUR/USD and USD/JPY

• The Euro failed to break the 1.1425-1.1440 resistance area and declined recently.
• There are two bearish trend lines in place with resistance at 1.1310 and 1.1355 on the hourly chart of EUR/USD.
• USD/JPY is currently gaining momentum above the 113.50 and 113.70 resistance levels.
• The pair is following an ascending channel with support at 113.70 on the hourly chart.

EUR/USD Technical Analysis

The Euro started a significant downside move from the 1.1450 swing high against the US Dollar. The EUR/USD pair failed to settle above the 1.1425 and 1.1440 resistance levels, resulting in a solid decline.

The pair traded lower recently and broke the 1.1400, 1.1340 and 1.1325 support levels. There was even a close below the 1.1325 support and the 50 hourly simple moving average. A new weekly low was formed at 1.1278 on FXOpen and later the pair started consolidating losses.

It tested the 23.6% Fib retracement level of the last decline from the 1.1383 high to 1.1278 low. On the upside, there are many resistances for buyers, starting with 1.1300 and up to 1.1360.

More importantly, there are two bearish trend lines in place with resistance at 1.1310 and 1.1355 on the hourly chart of EUR/USD. An intermediate resistance is near the 1.1330 level and the 50 hourly simple moving average.

Besides, the 50% Fib retracement level of the last decline from the 1.1383 high to 1.1278 low is also near 1.1330 to act as a solid resistance. Therefore, if the price corrects higher, it won’t be easy for buyers to clear the 1.1330 and 1.1355 resistance levels.

On the downside, an initial support is near the 1.1275 level, below which EUR/USD could decline towards the 1.1240 level in the near term.

USD/JPY Technical Analysis

The US Dollar remained in a decent uptrend from the 112.20 swing low and traded above the 113.00 resistance against the Japanese Yen. The USD/JPY pair traded above the 113.20 and 113.50 resistance levels to move into a positive zone.

During the upside, there was a close above the 113.50 level and the 50 hourly simple moving average. The pair recently traded towards the 113.80 level and a high was formed at 113.85. At the moment, the pair is consolidating gains above 113.75 and it remains well supported on the downside.

An initial support is near the 23.6% Fib retracement level of the recent wave from the 113.41 low to 113.85 high. Moreover, there is an ascending channel formed with support at 113.70 on the hourly chart.

Below the channel support, the next major support is at 113.60 and the 50% Fib retracement level of the recent wave from the 113.41 low to 113.85 high. The main support is at 113.40-50 zone and the 50 hourly SMA.

Therefore, if there is a downside correction, the pair could find support near the 113.70, 113.60 or 113.50 level. On the upside, a break above the 113.85 and 114.00 resistance levels may push USD/JPY towards the 114.50 level in the near term.

For the 24 hours to 23:00 GMT, the EUR declined 0.33% against the USD and closed at 1.1294.

The US dollar gained ground against major currencies, after the US President Donald Trump is likely to raise tariffs on $200 billion to 25% from 10% on all the remaining Chinese imports. However, US President, Donald Trump, and Chinese President, Xi Jinping, would attempt to resolve the US-China trade war over a meeting this week.

In the US, data showed that the US CB consumer confidence index eased to a level of 135.7 in November, in line with market expectations. In the prior month, the index had recorded a reading of 137.9. On the other hand, the nation’s housing price index climbed 0.2% on a monthly basis in November, falling short of market expectations for a rise of 0.4%. In the previous month, the index had registered a revised gain of 0.4%.

In the Asian session, at GMT0400, the pair is trading at 1.1293, with the EUR trading slightly lower against the USD from yesterday’s close.

The pair is expected to find support at 1.1266, and a fall through could take it to the next support level of 1.1239. The pair is expected to find its first resistance at 1.1332, and a rise through could take it to the next resistance level of 1.1371.

Looking forward, traders would closely monitor the Euro-zone’s M3 Money Supply for October followed by the German GfK consumer confidence for December, set to release in a few hours. Later in the day, the US 3Q annualised gross domestic product, advance goods trade balance, retail inventories and new home sales data along with the Richmond Fed manufacturing index for November and MBA mortgage applications, will garner significant market attention.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP declined 0.54% against the USD and closed at 1.2741.

In economic news, UK's CBI distributive trade survey's retail sales balance climbed to 19.00 in November, higher than market consensus for a rise to 10.00. The retail sales balance had registered a reading of 5.00 in the prior month.

In other major news, UK Prime Minister Theresa May highlighted the possibilities of Britain leaving European Union without a deal or no Brexit at all if the drafted deal would fall short of the desired number of votes in the Parliament. Besides, the EU's top court would pass a ‘quick' decision over the unilateral reversal of UK leaving the EU, leading to a second referendum and eventually halt Brexit

In the Asian session, at GMT0400, the pair is trading at 1.2742, with the GBP trading marginally higher against the USD from yesterday's close.

The pair is expected to find support at 1.2705, and a fall through could take it to the next support level of 1.2667. The pair is expected to find its first resistance at 1.2800, and a rise through could take it to the next resistance level of 1.2857.

Looking ahead, the Bank of England Governor, Mark Carney is scheduled to hold a press conference later in the day, following release of the central bank's financial stability report and stress tests results.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD rose 0.18% against the JPY and closed at 113.77.

In the Asian session, at GMT0400, the pair is trading at 113.83, with the USD trading 0.05% higher against the JPY from yesterday’s close.

The pair is expected to find support at 113.56, and a fall through could take it to the next support level of 113.30. The pair is expected to find its first resistance at 113.97, and a rise through could take it to the next resistance level of 114.12.

Going ahead, investors would await Japan’s retail trade and large retailers’ sales, both for October, slated to release overnight.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.07% against the CHF and closed at 0.9988.

In the Asian session, at GMT0400, the pair is trading at 0.9994, with the USD trading 0.06% higher against the CHF from yesterday’s close.

The pair is expected to find support at 0.9979, and a fall through could take it to the next support level of 0.9963. The pair is expected to find its first resistance at 1.0007, and a rise through could take it to the next resistance level of 1.0019.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD rose 0.35% against the CAD and closed at 1.3298.

In the Asian session, at GMT0400, the pair is trading at 1.3302, with the USD trading a tad higher against the CAD from yesterday’s close.

The pair is expected to find support at 1.3249, and a fall through could take it to the next support level of 1.3197. The pair is expected to find its first resistance at 1.3341, and a rise through could take it to the next resistance level of 1.3381.

In absence of key economic releases in Canada today, investor sentiment would be determined by global macroeconomic events.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the AUD rose 0.12% against the USD and closed at 0.7228.

LME Copper prices declined 1.2% or $76.5/MT to $6169.5/MT. Aluminium prices rose 0.3% or $5.0/MT to $1925.0/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7235, with the AUD trading 0.10% higher against the USD from yesterday's close.

Overnight data showed that Australia's seasonally adjusted construction work done unexpectedly fell 2.8% in 3Q 3018, defying market anticipation for a rise of 1.0%. In the previous quarter, construction work done had recorded a revised advance of 1.8%.

The pair is expected to find support at 0.7200, and a fall through could take it to the next support level of 0.7164. The pair is expected to find its first resistance at 0.7270, and a rise through could take it to the next resistance level of 0.7304.

Amid lack of economic releases in Australia today, traders would focus on global macroeconomic events for further direction.

The currency pair is trading above its 20 Hr moving average and showing convergence with its 50 Hr moving average.