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US initial jobless claims rose 9k to 224k in the week ending November 30, above expectation of 215k. Four-week moving average of initial claims rose 750 to 218k.

Continuing claims fell -25k to 1871k in the week ending November 23. Four-week moving average of continuing claims fell -3k to 1884k.

Full US jobless claims release here.

The euro has been drifting most of this week and remains steady on Thursday. In the European session, EUR/USD is trading at 1.0533, up 0.22% at the time of writing.

France in political chaos as government collapses

France’s coalition government has collapsed after a no-confidence vote against the government passed on Wednesday. French Prime Minister Michel Barnier is expected to resign on Thursday. The political turmoil could leave France without a government for weeks or even months, and the instability in the eurozone’s second-largest economy could spell trouble for the entire bloc.

The euro has weathered this later storm and has managed to post slight gains on Thursday. That could change if France’s political crisis deepens. The euro has been on a dreadful slide and is down 7.2% against the US dollar since October 1.

The European Central Bank meets on Dec. 12 and is widely expected to cut rates by 25 basis points. The political crisis in France is one more headache for ECB policymakers. Germany’s government collapsed last month and the new Trump administration could slap tariffs on the European Union. If this wasn’t enough, the eurozone economy has been sluggish, with the November data indicating that services and manufacturing contracted.

Federal Reserve Chair Jerome Powell sounded guardedly optimistic on Wednesday, saying that the US economy was in “very good shape” and that the Fed could “afford to be a little more cautious” about rate moves. The markets have priced in a rate cut at the Dec. 18 meeting and Powell may be trying to dampen anticipation of further rate cuts in early 2025. Powell may decide to cut in December and take a breather for a few months, with President-elect Trump and the new Congress taking over in January and likely to pursue a protectionist trade policy.

EUR/USD Technical

• EUR/USD is testing resistance at 1.0646. Above, there is resistance at 1.0581
• 1.0509 and 1.0474 are the next support levels

On 19 November, we analysed the natural gas price chart, noting:

→ the formation of an upward channel (marked in blue);

→ a potential bullish attempt to break the key $3.200 level, which had acted as resistance (highlighted with arrows).

As seen on the XNG/USD chart, the price did rise above $3.200 but failed to hold. After fluctuating in the upper half of the channel, it dropped below $3.200 to the channel's lower boundary, driven by:

→ a bearish report from the Energy Information Administration, showing US gas inventories above the five-year average;

→ a report from financial firm LSEG noting increased average gas production across 48 US states.

This decline pushed natural gas prices to a 2.5-month low around the $2.935 level.

What Could Happen Next?

From a technical perspective on the XNG/USD chart:

→ support from the channel's lower boundary (reinforced by the psychological $3.000 mark) is already evident in an emerging price reversal (indicated by an arrow);

→ on the other hand, the $3.200 level may resume acting as resistance.

It’s likely that natural gas prices will fluctuate between $3.000 and $3.200, with weather forecasts playing a decisive role in shaping consumption expectations for the winter season.

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Eurozone retail sales volume declined by -0.5% mom in October, underperforming expectations of a -0.4% mom contraction. Breaking down the data, sales for food, drinks, and tobacco edged up 0.1% mom, while non-food products (excluding automotive fuel) slumped -0.9% mom, and automotive fuel sales in specialized stores dropped -0.3% mom.

Across the broader European Union, retail sales volume fell by -0.3% mom. Among member states, the sharpest monthly declines were seen in Belgium (-1.7%), Germany (-1.4%), and Denmark and Cyprus (both -1.1%). Conversely, Luxembourg led with a strong 2.4% increase, followed by Poland at 2.2% and Lithuania at 1.5%.

Full Eurozone retail sales release here.

The GBP/USD pair has risen to 1.2711, marking the third day of sustained buyer activity. This upward movement comes from comments from Bank of England Governor Andrew Bailey, who hinted at potential interest rate cuts in 2025 if the consumer price index (CPI) continues its downward trajectory.

In a recent interview, Governor Bailey discussed the possibility of a decisive easing in monetary policy, suggesting a total reduction of 100 basis points in 2025, which could bring the interest rate down to as low as 3.75% per annum. While this outlook is seen as positive, investors are currently more focused on the short term, with expectations set for the BoE's rate to remain unchanged in December 2024. Any substantial rate adjustments are anticipated to be implemented next year.

Governor Bailey also noted that UK inflation is declining more rapidly than anticipated, with current consumer prices nearly 1% below previous forecasts. This contrasts with official statistics, which recorded a CPI rise from 1.7% in September to 2.3% in October, suggesting that inflation pressures are not fully alleviated yet.

Technical analysis of GBP/USD

H4 chart: the GBP/USD is currently on an upward trend, targeting 1.2767. Once this level is reached, a retracement to 1.2628 is expected, testing it from above before potentially initiating another growth phase towards 1.2815, with prospects of extending to 1.2960. The MACD indicator supports this bullish scenario, with its signal line positioned above zero and trending upwards.

H1 chart: the pair has found support at 1.2628 and is building a growth structure towards 1.2767. Once achieving this level, a corrective phase to 1.2628 may ensue. This analysis is supported by the Stochastic oscillator, which shows the signal line moving upwards from above 50 towards 80, indicating continued upward momentum in the near term.

Daily Pivots: (S1) 189.91; (P) 190.72; (R1) 192.08; More...

Intraday bias in GBP/JPY remains neutral for consolidations above 188.07 temporary low. Further decline is expected as long as 55 D EMA (now at 194.25) holds. On the downside, below 188.07 temporary low will resume the fall from 199.79 to 183.70 support. Firm break there will argue that whole decline from 208.09 is resuming, and target a test on 180.00 low next.

In the bigger picture, price actions from 208.09 are seen as a correction to whole rally from 123.94 (2020 low). The range of consolidation should be set between 38.2% retracement of 123.94 to 208.09 at 175.94 and 208.09. However, decisive break of 175.94 will argue that deeper correction is underway.

Daily Pivots: (S1) 157.31; (P) 157.99; (R1) 158.99; More....

Intraday bias in EUR/JPY remains neutral for consolidations above 156.16 temporary low. Further decline is expected as long as 55 D EMA (now at 162.08) holds. On the downside, below 156.16 temporary low will resume the fall from 166.67 to 155.14 support first. Firm break there will raise the chance that whole decline from 175.41 is resuming, and target 154.40 low next.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). The range of consolidation should have been set between 38.2% retracement of 114.42 to 175.41 at 152.11 and 175.41 high. However, decisive break of 152.11 would argue that deeper correction is underway.

Daily Pivots: (S1) 0.8263; (P) 0.8282; (R1) 0.8296; More...

Intraday bias in EUR/GBP remains neutral for the moment. On the downside, decisive break of 0.8259 will resume larger down trend to 0.8201 key support. On the upside, break of 0.8311 minor resistance will turn bias back to the upside for recovery. But still, outlook will stay bearish as long a 0.8446 resistance holds, and downside breakout is expected at a later stage.

In the bigger picture, down trend from 0.9267 (2022 high) is in progress. Next target is 0.8201 (2022 low), but strong support should be seen there to bring rebound. However, outlook will remain bearish as long as 0.8624 resistance holds even in case of strong rebound. Decisive break of 0.8201 will indicate long term bearish reversal.

Daily Pivots: (S1) 1.6231; (P) 1.6312; (R1) 1.6426; More...

The break of 1.6359 resistance in EUR/AUD is tentatively taken as a the first sign of near term bullish reversal. Intraday bias now mildly on the upside for 1.6598 resistance. Firm break there will confirm successful defense of 1.5996 support and bring further rally. Nevertheless, break of 1.6156 support will turn bias back to the downside for 1.5996 again.

In the bigger picture, immediate focus is now on 1.5996 key support level. Sustained break there will argue that whole up trend from 1.4281 (2022 low) is already reversing. Deeper decline would be seen to 61.8% retracement of 1.4281 to 1.7180 at 1.5388, even as a correction. Nevertheless, strong rebound from current level, followed by break of 1.6359 resistance, will keep medium term outlook neutral at worst.

Daily Pivots: (S1) 0.9282; (P) 0.9304; (R1) 0.9318; More....

Intraday bias in EUR/CHF stays neutral for the moment. Further decline is in favor with 0.9343 resistance intact. On the downside, below 0.9269 minor support will bring retest of 0.9204/9 support zone. Decisive break there will confirm larger down trend resumption. Nevertheless, firm break of 0.9343 will now be a sign of near term bullish reversal, and target 0.9444 resistance for confirmation.

In the bigger picture, outlook will now stay bearish as long as 0.9444 resistance holds. Decisive break of 0.9209 low will resumed long term down trend to 61.8% projection of 0.9772 to 0.9209 from 0.9444 at 0.9096 next.