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Daily Pivots: (S1) 0.8792; (P) 0.8815; (R1) 0.8834; More…

Range trading continues in USD/CHF and intraday bias stays neutral. Also, with 0.8800 support intact, further rally remains in favor. On the upside, break of 0.8956 will resume the rally from 0.8374, and target 0.9223 key resistance next. However, firm break of 0.8800 will confirm short term topping and turn bias back to the downside for 55 D EMA (now at 0.8725).

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern. Rise from 0.8374 is seen as the third leg. Overall outlook will continue to stay bearish as long as 0.9223 resistance holds. Break of 0.8332 low is in favor at a later stage when the consolidation completes.

Daily Pivots: (S1) 1.2687; (P) 1.2719; (R1) 1.2765; More...

Intraday bias in GBP/USD remains neutral at this point. While another rise cannot be ruled out, outlook will stay bearish as long as 55 D EMA (now at 1.2867) holds. Below 1.2615 minor support will turn intraday bias back to the downside for retesting 1.2486. Break there will resume whole fall from 1.3433.

In the bigger picture, a medium term top should be in place at 1.3433, and price actions from there are correcting whole up trend from 1.0351 (2022 low). Deeper decline is now expected as long as 55 D EMA (now at 1.2867) holds, to 38.2% retracement of 1.0351 to 1.3433 at 1.2256, which is close to 1.2298 structural support. Strong support should be seen there to bring rebound.

Daily Pivots: (S1) 1.0548; (P) 1.0572; (R1) 1.0603; More...

Intraday bias in EUR/USD stays neutral at this, despite today's dip. Outlook remains bearish with 1.0609 resistance intact. On the downside, break of 1.0330 will resume the fall from 1.1213. Also, sustained trading below 1.0404 key fibonacci level will carry larger bearish implication. Nevertheless, firm break of 1.0609 will confirm short term bottoming, and turn bias back to the upside for 1.0760 support turned resistance first.

In the bigger picture, immediate focus is now on 50% retracement of 0.9534 (2022 low) to 1.1274 at 1.0404. Strong rebound from this level will keep price actions from 1.1273 (2023 high) as a medium term consolidation pattern only. However, sustained break of 1.0404 will raise the chance that whole up trend from 0.9534 has reversed. That would pave the way to 61.8% retracement at 1.0199 first. Firm break there will target 0.9534 low again.

The Japanese yen is lower on Monday. In the European session, USD/JPY is trading at 150.03, up 0.26% on the day.

Ueda says rate hike is “nearing”

Bank of Japan Governor Ueda has been hinting about a rate hike and gave what was perhaps his strongest hint on Friday. In a newspaper interview, Ueda said that interest rate hikes are “nearing in the sense that economic data are on track”. Ueda also added that the BoJ has a “big question mark” over the outlook for US economic policy, with Donald Trump taking office next month. Ueda reiterated that the central bank wants to see a sustainable rise by inflation to the 2% target and expressed concern about the weak yen, warning the BoJ could respond with “countermeasures”.

The BoJ makes its next rate announcement on Dec.19. Will it raise rates at that meeting or wait until January? The BoJ has done a poor job of communicating its intentions and after the surprise BoJ rate hike in August triggered turmoil in the financial markets. Ueda’s comments may have been an attempt to show greater transparency, although he failed to mention a timeline for the next rate hike. The markets have fully priced in a rate hike by January, with the probability of a December hike at around 60%.

In the US, it’s a busy data calendar, highlighted by nonfarm payrolls on Friday. The ISM Manufacturing PMI will be released later today, with a market estimate of 47.5 for November, compared to 46.5 in October. Manufacturing has been in a prolonged recession, with only one month of growth over the past two years.

USD/JPY Technical

• USD/JPY tested resistance at 150.30 earlier. Above, there is resistance at 151.13
• There is support at 148.89 and 148.06

Hello fellow traders. In this technical blog we’re going to take a quick look at the Elliott Wave charts of GOLD (XAUUSD), published in members area of the website. As our members know the pair is showing impulsive bullish sequences in the cycle from the 2537.3 low. Consequently , we were calling for the further rally in the commodity. Recently GOLD made a pull back that has had a form of Elliott Wave Zig Zag pattern. In the further text we are going to explain the Elliott Wave Pattern and the forecast

Before we take a look at the real market example, let’s explain Elliott Wave Zigzag.

Elliott Wave Zigzag is the most popular corrective pattern in Elliott Wave theory . It’s made of 3 swings which have 5-3-5 inner structure. Inner swings are labeled as A,B,C where A =5 waves, B=3 waves and C=5 waves. That means A and C can be either impulsive waves or diagonals. (Leading Diagonal in case of wave A or Ending in case of wave C) . Waves A and C must meet all conditions of being 5 wave structure, such as: having RSI divergency between wave subdivisions, ideal Fibonacci extensions and ideal retracements.

At the chart below we can see what Elliott Wave Zig Zag pattern looks like in real market.

GOLD H1 London Update 11.26.2024

GOLD ended cycle from the 2538 low as 5 waves structure. The commodity has given us pull back against the 2538 low that unfolded as Zig Zag pattern. Extreme zone has been already reached at 2626.04-2586.8 ( buying zone) We don’t recommend selling the commodity and expect further rally to resume from the marked area.

GOLD H1 London Update 10.24.2023

The commodity has given us nice reaction from the marked extreme zone. Now, as far as the price holds above 2606 low, we can have correction completed and see the further strength. We need to see break above (1) blue – 11.22 high to confirm next leg up is in progress.

• Russell 2000 outperformance against S&P 500 and Nasdaq continued to persist since Q3 2024.
• The recent monthly Russell 2000 stellar performance of 10.8% in November has been reinforced by the incoming Trump administration’s “America First” policy.
• Watch the 2,288 key medium-term support on the Russell 2000.

Since our last publication, the price actions of the Russell 2000 comprised of small-cap listed companies in the US rallied as expected and finally retested its current intraday all-time high of 2,458 made three years ago on 5 November 2021 on Monday, 25 November.

The Russell 2000 is the only major US stock index that has not made fresh all-time highs in the past three years versus the S&P 500, Nasdaq 100, and Dow Jones Industrial Average which have skyrocketed to a series of fresh all-time highs in 2024.

Interestingly, the small-cap Russell 2000 has started to outperform the mega-cap technology-centric S&P 500 and Nasdaq 100 since the third quarter of 2024.

In November, Russell 2000 outperformance continued to persist where it recorded a monthly gain of 10.8%, almost double the monthly returns of the S&P 500 (5.7%) and Nasdaq 100 (5.2%). In addition, the Dow Jones Industrial Average also surpassed the S&P 500 and Nasdaq 100 with a monthly gain of 7.5% in November.

Trump’s “American First” policy reinforces Russell 2000 outperformance

Fig 1:  Ratio charts of Russell 2000 & DJIA over Nasdaq 100 as of 29 Nov 2024 (Source: TradingView, click to enlarge chart)

The incoming Trump administration has vowed to enact generous corporate tax cuts and deregulation policies with the support of a Republican congress, it has created tailwinds for small-cap companies in the US.

In addition, recent trade tariff threats from US President-elect Trump towards China, Canada, Mexico, and the BRICS grouping of emerging economies have also provided a potential defensive impetus for Russell 2000 outperformance over the S&P 500 and Nasdaq 100 as Russell 200 component stocks derived most of their respective revenue streams (close to 80% on the aggregate) domestically in the US (see Fig 1).

The information technology sector has the largest market capitalization weightage in the S&P 500 and the Nasdaq 100 derives around 57% of its revenue from international markets that may be subject to headwinds from a potentially stronger US dollar, triggered by the effects of higher trade tariffs that may be imposed by the Trump administration.

Supported by rising 50-day and 200-day moving averages

Fig 2:  US Russell 2000 CFD Index major and medium-term trends as of 2 Dec 2024 (Source: TradingView, click to enlarge chart)

In the lens of the technical analysis, the price actions of the US Russell 2000 CFD Index (a proxy of the E-mini Russell 2000 futures) have continued to be supported by upward-sloping 50-day and 200-day moving averages that suggest its medium-term and major uptrend phases remain intact.

Watch the 2,288 tightened key medium-term support and clearance above the 2,450 key intermediate resistance (also the current all-time area) may see the next medium-term resistance zone coming in at 2,625/655 for the US Russell 2000 CFD Index (see Fig 2).

However, failure to hold the 2,288 key support negates the bullish tone to kickstart a potential medium-term (multi-week) corrective decline sequence within its major uptrend phase to expose the next supports at 2,170 and 2,080.

The Australian dollar is in negative territory on Monday. In the European session, AUD/USD is trading at 0.6491, down 0.26% on the day.

Australia’s retail sales rise to 0.6%

Australian events started the week on a strong note, as retail sales were higher than expected. October retail sales jumped 3.4% y/y in October, up sharply from the September gain of 1.2%. Monthly, retail sales climbed 0.6%, compared to 0.1% in September.

Retail sales have accelerated for three successive months as consumers are feeling more optimistic, with expectations that the central bank’s next move will be a rate cut. Retailers have been offering discounts ahead of the holiday season which contributed to a stronger than usual retail sales for October. Ironically, the strong retail sales report will reduce pressure on the Reserve Bank of Australia to cut rates.

The RBA has maintained the cash rate at 4.35% for over a year and has sounded hawkish about rate policy, saying that a rate hike remains on the table. The markets aren’t buying it and expect the next move to be a hike, likely in mid-2025. The RBA meets on Dec. 10 and is widely expected to stay on the sidelines and hold rates.

Inflation has been on the decline in recent months but the RBA has warned that underlying inflation remains too high. In October, headline inflation was unchanged at 2.1%, the lowest level since 2021and around the midpoint of the RBA’s target of 1%-3%. The trimmed mean rate, an indicator of underlying inflation, accelerated to 3.5% in October, up from 3.2% a month earlier.

AUD/USD Technical

• AUD/USD is testing support at 0.6506. Next, there is resistance at 0.6485
• 0.6533 and 0.6554 are the next resistance lines

Bitcoin price fell 2.6% in Asian / European trading on Monday, after the dollar received fresh boost from the latest comments from Donald Trump.

Although today’s dip was the biggest in one week, the price so far stays above significant 95K support (psychological / floor of congestion that extends into fifth consecutive day) keeping near-term bias with bulls.

Bitcoin hit new record high at 99800 vs dollar recently that increased pressure on magical 100K barrier, but expected strong headwinds at this zone, pushed the price lower, to hold in prolonged consolidation within 90K/100K range.

This was seen as logical reaction on recent strong post-US election rally, with crypto market being well supported by expected measures from pro-crypto Trump’s administration, but awaiting policies that Trump promised during the campaign, to be implemented that would provide fresh and significant support to bitcoin.

Near-term action shown bitcoin in defensive, but overall, in sideways mode and awaiting fresh direction signals.

Larger bulls to remain intact above 90K, with markets focusing on economic data (US Nov labor report is in focus) and political / geopolitical news.

Res: 95935; 98280; 98800; 99032
Sup: 95000; 94199; 91501; 90000

The dollar index edged higher after opening with gap higher on Monday, lifted by a significant shift in rhetorics pf President-elect Donald Trump, who turned his aims for weaker dollar to fight trade war, to threats to BRICS member countries of facing a 100% tariffs if create new or support another currency in attempts to replace dollar.

Fresh rise of dollar generated initial signal of reversal after a four-day pullback was contained rising channel support trendline, reinforced by daily Kijun-sen (at 105.60 zone), although more work at the upside is required to confirm signal.

Break of immediate resistances at 106.50 zone (Fibo 38.2% of 108.04/105.57 bear-leg / 10DMA) to firm near-term structure for attack at next pivot at 106.81 (50% retracement / daily Tenkan-sen), violation of which to shift near term focus to the upside and signal that corrective phase might be over.

Technical picture on daily chart is overall bullish, as 14-d momentum is in positive territory and turning up, stochastic is emerging from oversold zone and converging 55/200DMA’s are signaling possible formation of Golden Cross.

Near-term action is expected to remain biased higher while holding within month long bull-channel and pointing to steady uptrend.

Res: 106.50; 106.81; 107.10; 107.46.
Sup: 106.09; 105.60; 105.32; 105.00.

UK PMI Manufacturing was finalized to 48.0 in November, marking a nine-month low and reflecting a deepening contraction in the sector. The decline from October's 49.9 underscores persistent challenges, including high costs, subdued demand, and a "bleak" export environment.

Rob Dobson, Director at S&P Global Market Intelligence, noted that conditions "deteriorated again" as manufacturers faced falling output, reduced orders, and cutbacks in purchasing, jobs, and inventories.

Exports remained under pressure, with weaker demand from key markets in the US, China, and the EU driving a further decline in new export business. Supply chain disruptions also intensified, fueled by the ongoing Red Sea crisis, port delays, and border regulation challenges.

Looking ahead, the manufacturing sector faces additional headwinds. Recent UK budget measures, including higher labor costs and employer national insurance contributions, are expected to increase operational expenses in 2025.

Combined with rising geopolitical tensions and the threat of heightened global protectionism, manufacturers are bracing for an extended period of "high costs, low demand and raised uncertainty".

Full UK PMI manufacturing final release here.