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CHI50 started a strong rally in the mid-May, flying to a two-year high – a breath below the 14,000 – key level on November 22. But since then, the index took a knock, sinking by almost 4.0% and falling below the 20-period exponential moving average (EMA) in the four-hour chart, painting a neutral picture in the short-term.

The index is currently consolidating around the 50% Fibonacci of the uptrend from 12674 to 13991 (November 6 -November 22), with technical indicators suggesting the index to record a steady path in the short-term. The RSI has crossed marginally below 50, pointing to the upside while the MACD has flattened near zero.

A move to the downside would meet both the 50% Fibonacci and the 50-period EMA at 13363. However, a break below this level would strengthen downside pressure, leading the index down to the 13000 key-level and the 78.6% Fibonacci of 12956. Steeper declines could also target the bottom of the Fibonacci upleg at 12674.

Otherwise, upside movements could find an immediate resistance around 13532 where the 20-period EMA and the 38.2% Fibonacci lay. From here, the 23.6% Fibonacci of 13692 and the previous top at 13991 could be potential resistance levels as well.

In the medium-term, the outlook is positive given that the bullish cross between the 20 and the 50-period EMA is still intact. The index itself gives a clear positive signal as well as it has been making higher highs and lower lows since June.

• Quiet Post-Thanksgiving Session Expected;
• USD Extends FOMC Minutes Decline;
• DAX Underperforms as SPD Reopens Door to Talks.

Quiet Post-Thanksgiving Session Expected

US investors return briefly from the Thanksgiving bank holiday on Friday, although the session is likely to be very quiet given the early market close and the lack of events on the calendar.

In the past, this has been a very quiet day and I don't expect this to be any different. We have a few pieces of data being released – flash services, manufacturing and composite PMIs – but under the circumstances I'm not expecting much from them. Equity markets are poised to open marginally higher and not far from record highs but I think people's minds will already be on next week.

USD Extends FOMC Minutes Decline

The dollar is coming under pressure again on Friday, adding to losses made since the release of the FOMC minutes on Wednesday that cast doubt on the number of rate hikes we can expect going forward. While a December increase is already priced in, there is a growing number of policy makers that are concerned about persistent sluggish inflation, as well as potential financial market imbalances, which could impact the tightening process.

The drop off we've seen in the dollar since the release of the minutes suggests traders are anticipating a slower tightening process in response to the minutes although I remain unconvinced. When you consider how well the economy has performed over the last couple of quarters, the strength of the labour market and the likelihood that tax reform will pass, there's plenty of reason to expect interest rates to rise and, in turn, the dollar.

DAX Underperforms as SPD Reopens Door to Talks

The DAX is continuing to underperform most of its peers this morning, despite the SPD reopening the door to negotiations with Angela Merkel's CDU party in an attempt to restore political stability and avert another election. Investors remain sceptical about the talks which is unsurprising given that the SPD was previously opposed to a coalition, having suffered big losses after serving as a junior partner over the last four years.

It seems some members of the party though would like to pursue talks in order to avoid going to the polls again, with the advances made by AfD and the FDP possibly behind the sudden change of heart. It's unclear what agreement the two will come to though, with Merkel having previously been unwilling to serve in a minority government. Perhaps her mind can be changed if certain assurances are provided by the SPD although another coalition is surely the most desirable outcome. Weekend risk is also playing a part here with a collapse in talks over the next 48 hours likely weighing at the open on Monday.

Copper future contract for December delivery continues to trend higher and extends steep ascend into sixth straight day.

The rally was underpinned by rising and widening daily cloud and supported by weaker US dollar and showed no impact from negative signals on concerns over demand from China’ metal’s top consumer.

Fresh bullish extension on Friday eyes strong barrier at $3.1711 (Fibo 61.8% of $3.2580/$3.0305 descend, where bulls could show stronger hesitation.

The notion is supported by strongly overbought slow stochastic on daily chart, however, firm bullish setup of daily techs suggests limited downside.

Initial support lies at $3.1304 (30SMA) with extended dips to be contained by daily cloud top ($3.1087) and converging 20/10 SMA’s ($3.1057 / $3.1006) which are on track to form bullish cross and further support the advance.

Res: 3.1660, 3.1711, 3.1850, 3.2000
Sup: 3.1445, 3.1304, 3.1087, 3.1000

EURUSD

The EURUSD continued its bullish momentum yesterday topped at 1.1856. The bias remains bullish in nearest term testing 1.1900 key resistance which remains a good place to sell with a tight stop loss as a clear break and daily/weekly close above that area would stop the major bearish trend testing 1.2000 – 1.2090 next week. Immediate support is seen around 1.1800. A clear break below that area could lead price to neutral zone in nearest term testing 1.1750 but key support remains at 1.1690 which need to be clearly broken to the downside to keep the major bearish trend remains strong testing 1.1550 or lower.

GBPUSD

The GBPUSD didn’t make significant movement yesterday. The bias remains bullish in nearest term but 1.3330 key resistance still hold so far as you can see on my daily chart below. We need a clear break and daily/weekly close above that area to resume the major bullish trend testing 1.3615 next week. Immediate support is seen around 1.3280. A clear break below that area could lead price to neutral zone in nearest term testing 1.3225/00 region but as long as stay above 1.3000 I remain bullish.

USDJPY

The USDJPY didn’t make significant movement yesterday. There are no changes in my technical outlook. The bias remains bearish in nearest term testing 110.65. Immediate resistance remains around 111.65. A clear break above that area could lead price to neutral zone in nearest term testing 112.00 region. Overall I remain neutral but still prefer a bearish scenario at this phase as a part of the bearish pin bar scenario as you can see on my daily chart below.

USDCHF

The USDCHF attempted to push lower yesterday slipped below the daily EMA 200, bottomed at 0.9795 but closed higher back above the EMA 200, printed a bullish pin bar as you can see on my daily chart below. The bias is neutral in nearest term probably with a little bullish bias testing 0.9875 – 0.9915 resistance area. On the downside, a clear break and daily/weekly close below 0.9800 would stop the major bullish trend testing 0.9700 area or lower next week.

The euro has posted slight gains in the Friday session. Currently, EUR/USD is trading at 1.1866, up 0.13% on the day. On the release front, German Ifo Business Climate improved to 117.5, above the estimate of 116.6 points. There are no major events in the US.

The German economy continues to perform well, and there was more positive news on Thursday. German Final GDP in the third quarter accelerated to 0.8%, its strongest quarter since 2014. The manufacturing sector has looked sharp, and German Manufacturing PMI for November improved to 62.5, its highest level since 2010. At the same time, President Angela Merkel has failed to put together a coalition government, and another election could be the only way out of the political crisis. Will Merkel’s predicament have a negative effect on the German economy? In the short-term, the economy should be able to weather the crisis, but future growth could be in jeopardy if the political deadlock continues. The euro and German stock markets have remained steady since the coalition talks fell apart last week, indicating that investors remain upbeat about the German economy.

Federal Reserve policymakers remain upbeat about the U.S economy, according to the minutes of the most recent policy meeting. The minutes, released on Wednesday, indicated that policymakers expected the U.S economy to continue showing strong growth, and predicted that interest rates will be raised in the “near term”. The members discussed the vexing question of why inflation has been persistently low (no quick-fix solution was provided), with most agreeing that a tight labor market should lead to higher inflation levels. Although policymakers did not provide further hints about the timetable of a rate hike, the markets remain convinced that additional rates are imminent. The odds of a rate hike in December are 91%, and the odds a January raise are at 89%.

GBPJPY is showing signs of weakness after falling below its 50-day moving average but the 2-month neutral trend remains intact. The market continues to consolidate in a range between 147 and 152 after pausing an uptrend at a high of 152.85 on September 21.

RSI has fallen back below 50 into bearish territory, suggesting there is room for further downside in prices in the near-term. Strong support is expected at the bottom of the range at 147. Breaking lower would place the market into a previous range – 140-147 – that took place between April and September.

As long as the price remains above the 200-day MA at 144.14, the overall outlook leans to positive. Prices need to rise back above the 50-day MA (149.50 area) to improve upside momentum and increase the odds for a move to the upper range at 152 and to re-test the 152.85 peak. This level was last seen in June 2016 and may be quite a challenge to break. If successful, then GBPJPY would be back in an uptrend.

In the bigger picture, GBPJPY has traded above its 200-day MA since September 8, keeping the bullish outlook in place.

The pair regains traction after shallow correction to 3.90 was contained by rising 10SMA. Fresh bullish acceleration completes Doji reversal pattern on daily chart and turns focus towards new record high at 3.9814, posted this week.

The notion is supported by price being on track for strong bullish weekly close.

Bulls eye psychological 4.00 barrier, with extension higher to look for test of Fibo projection at 4.0720.

Ascending 10SMA (currently at 3.0924) is expected to contain dips and keep bulls ibn play.

Res: 3.9540, 3.9814, 4.0000, 4.0720
Sup: 3.9024, 3.8970, 3.8770, 3.8448

Bitcoin is trading sideways around $8000. The technical structure shows a tremendous positive short-term momentum. Hourly support is located at 5605 (13/11/2017 low). Strong support stands very far at 2975 (22/08/2017 low). In the shortterm, the digital currency should continue rising.

In the long-term, the digital currency has had an exponential growth. There are decent likelihood that the asset will reach $10'000.

Crude oil has finished its consolidation and is now ready to challenge again its 1-year high. Expected to show further short-term bullish increase. Indeed the technical structure has a history of decent consolidation phase.

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. For the time being the pair lies in an upside momentum. Strong support lies at 35.24 (05/04/2016) while resistance can now be found at 55.24 (03/01/2017 high).

Silver is heading higher. Hourly support can be found at 16.60 (27/10/2017 low). Hourly resistance is given at 17.46 (13/10/2017 high). Additional support can be found at 16.13 (06/10/2017 low).

In the long-term, the trend is rater negative. Further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).