Sample Category Title

Daily Pivots: (S1) 140.77; (P) 141.51; (R1) 142.86; More...

USD/JPY is still bounded in range of 137.66/142.45 and intraday bias remains neutral first. On the downside, break of 137.66 will resume the decline from 151.93, to 133.07 fibonacci level, as a correction to the larger up trend. Nevertheless, firm break of 142.45 will turn bias back to the upside for stronger rebound to 55 day EMA (now at 143.34) and above.

In the bigger picture, a medium term top should be formed at 151.93. Fall from there is correcting larger up trend from 102.58. It's too early to call for bearish trend reversal. But even as a corrective move, such decline should target 38.2% retracement of 102.58 to 151.93 at 133.07, or further to 55 week EMA (now at 130.28).

Daily Pivots: (S1) 0.9549; (P) 0.9574; (R1) 0.9616; More...

While USD/CHF's recovery from 0.9355 extends higher today, upside is limited well below 0.9680 minor resistance. Intraday bias stays neutral first, and further decline is still expected. On the downside, break of 0.9355 will resume the fall from 1.0146 to 0.9287 fibonacci level. Nevertheless, firm break of 0.9680 will bring stronger rebound to 55 day EMA (now at 0.9761).

In the bigger picture, rise from 0.8756 (2021 low) has completed at 1.0146, well ahead of 1.0342 long term resistance (2016 high). Based on current downside momentum, fall from 1.0146 might be a medium term down trend itself. Break of 61.8% retracement of 0.8756 to 1.0146 at 0.9287 will pave the way to 0.8756. In any case, risk will stay on the downside as long as 55 day EMA (now at 0.9767) holds.

Daily Pivots: (S1) 1.0311; (P) 1.0359; (R1) 1.0412; More...

Intraday bias in EUR/USD stays neutral for the moment as consolidation from 1.0481 is extending. As long as 1.0092 resistance turned support holds, further rally is still expected. On the upside, break of 1.0481 will resume the rise from 0.9534 and target 1.0609 fibonacci level. However, sustained break of 1.0092 will turn bias to the downside for 55 day EMA (now at 1.0041) and below.

In the bigger picture, a medium term bottom was in place at 0.9534, on bullish convergence condition in daily MACD. Even as a corrective rise, rally from 0.9534 should target 38.2% retracement of 1.2348 (2021 high) to 0.9534 at 1.0609. Sustained trading above 55 week EMA (now at 1.0566) will raise the chance of trend reversal and target 61.8% retracement at 1.1273. This will now remain the favored case as long as 1.0092 resistance turned support holds.

Market sentiment is fragile on uncertainty regarding whether China would make a U-turn on its Covid reopening plans.

The widening spread between the US 2- and 10-year yields, which hit the widest inversion since the middle of 80s, and between the US 3-month and the 10-year yields warn that recession will be inevitable.

In the past decades, when we had such sustainable inversions - and they are sustainable, a recession followed the next year.

Oil rebounds from $75pb 

Recession fears were already weighing on fragilized oil on Monday morning, when news that OPEC+ would increase oil production by half a million barrels per day on the upcoming December 4th meeting wreaked havoc yesterday.

The barrel of US crude tanked to $75 per barrel, below the September dip.

Later, Saudi denied the report and we are back to $80 this morning.

But the fear of another round of Covid lockdowns, and the broad-based recession pricing shall continue playing against oil bulls.

Still, bulls see two positive factors. First, the US will stop selling its strategic petroleum reserves. And second, the EU sanctions against Russian oil will become effective in December. Both, should support another leg higher in oil.

While the first idea seems plausible - as not only the Americans will have to stop selling their reserves at some point, but also start thinking about refilling them, the effect of the European sanctions on oil are uncertain. According to latest news, Russia already lost around 90% of its European oil market, even before the sanctions began.

Therefore, the outlook for oil remains neutral to slightly negative in the short-run. There is now a double bottom near the $75/76 range, that OPEC+ will fight to hold. On the topside, a recovery above $95 before the year end seems unlikely.

Dollar up, equities down 

Yesterday, the latest German PPI data printed a monthly drop of 4.2% in October. Softer oil and gas prices certainly played a role, but the sharp drop has also been interpreted as a sign of an imminent, or an already-in recession.

The EURUSD dived to 1.0222, and could retreat further, as we see the US dollar picking up momentum since it rebounded from an important technical support last week.

The US dollar index bounced higher after getting very close to the 38.2% retracement level on 2021-2022 rally, and mixed Fed comments tilt the balance to the upside for the greenback.

San Francisco Federal Reserve (Fed) President Mary Daly warned about a too much tightening that could be ‘unnecessarily painful’ for the economy, but that couldn’t send the US stocks in the green.

The S&P500 closed 0.39% lower, while Nasdaq slid more than 1%.

Cryptic fall 

Cryptocurrencies remain under stress of the FTX collapse.

Genesis warns investors that it could file for bankruptcy if it can’t raise cash to save its lending unit that went down along with FTX.

Bitcoin is now below the $16’000 mark. And if those who prefer to hold on to their coins prevent the price from a free fall, it’s hard to convince new money to join the market in the middle of the turmoil.

We could see Bitcoin fall as low as $12’000.

Market movers today

A quiet day in terms of economic data, euro area November flash consumer confidence will be released in the afternoon.

Consensus expects the National Bank of Hungary to maintain its policy rates unchanged at the monetary policy meeting today.

Overnight, we expect the Reserve Bank of New Zealand (RBNZ) to hike its policy rate by 75bp, market remains split between 50 and 75bp with around 66 basis points priced in.

Today, we will also have ECB's Holzmann and Rehn as well as Fed's Mester, Bullard and George on the wires.

The 60 second overview

Inflation: German PPI inflation declined to 34.5% in October from 45.8%, more than expected. The big drop was due to energy and PPI for intermediate goods also eased, however, less positive dynamic for PPI for consumer goods, which is still trending up, especially due to non-durables.

Spanish mortgage relief: The Spanish government will approve mortgage relief measures including extension of loan repayments for up to seven years for more than one million vulnerable households and middle-class families. Around three-quarters of the population are homeowners, with most opting for floating-rate mortgages, which leaves many exposed to increasing interest rates.

Equities: Equities lower yesterday without any clear drivers for lack of appetite. However, looking at the sector performance it shows a rather big discrepancy between the cyclicals and defensives. Consumer staples leading the defensive universe higher while consumer discretionary leading cyclicals lower. Energy sector also lower yesterday but that could have been a lot worse if the Saudi Arabian energy minister had not been out denying a story about an oil output increase. In US Dow -0.1%, S&P 500 -0.4%, Nasdaq -1.1% and Russell 2000 -0.6%. Asian markets are mostly higher this morning and the same goes for both European and US futures.

FI: The inversion of the US and European yield curves continue on the back of comments from Federal Reserve officials that want to keep hiking until inflation is under control although others are indicating a slowing pace of the hikes. The slowing pace was also on ECB Centeno's agenda when he mentioned yesterday that conditions are in place for a rate hike of less than 75bp.

FX: The start to the week has been dominated by USD strength with EUR/USD approaching the 1.02 level. HUF and JPY have traded on the back-foot amid both yields moving back higher while commodity FX had a volatile session driven by oil fluctuations. EUR/NOK and EUR/SEK remain broadly unchanged compared to Friday's close.

Credit: Yesterday was slightly downbeat with iTraxx main 1bp wider to 95.6bp and iTraxx Xover 3.6bp wider to 477.1bp. In spite of the muted sentiment, the primary market started the week on a strong footing with several new prints in the EUR benchmark arena.

Short term Elliott Wave View in DAX suggests cycle from 9.28.2022 low is unfolding as a 5 waves impulse structure. Up from 9.28.2022 low, wave 1 ended at 13444.07 and pullback in wave 2 ended at 13022.64. Up from there, Index rallied in another 5 waves in lesser degree. Wave ((i)) ended at 13691.12 and wave ((ii)) ended at 13599.35. Index resumed higher in wave ((iii)) towards 14263.48, dips in wave ((iv)) ended at 14177.59, and final wave ((v)) ended at 14431.18 which completed wave 3.

Pullback in wave 4 ended at 14150.56 with subdivision as a zigzag. Down from wave 3, wave ((a)) ended at 14195.3, wave ((b)) ended at 14384.54, and wave ((c)) ended at 14150.56. Wave 5 is in progress as another impulse in lesser degree. Up from wave 4, wave ((i)) ended at 14457.76 and dips in wave ((ii)) ended at 14321.84. Near term, while above 14150.56, expect the Index to extend higher a bit more to complete wave 5. It will also end the higher degree cycle wave (C) of ((X)). Once the 5 waves higher from 9.28.2022 low is completed, the Index should at minimum pullback in 3 waves to correct the cycle.

DAX 45 Minutes Elliott Wave Chart

ECB Governing Council member Robert Holzmann told FT in an interview, that he could "see no signs that core inflation is reducing" . He added that another big rate hike "would give a strong signal about our determination," as "it would tell businesses and trade unions we are serious so don't underestimate us, be careful."

He backs another 75bps rate hike in December but he was still "open to changing my mind" based on the ECB's new quarterly economic forecasts. He added that interest rates could need to rise to a level where they "caused pain". Hence, it's important to hike "early" because "afterwards the pain is much, much larger."

USD/JPY:

The current general bias for USDJPY on the H4 chart is bullish. To add confluence to this, the price is crossing the Ichimoku cloud which indicates a bullish market. If the bullish momentum continues, expect USDJPY to head towards the 1st resistance line at 143.512 where the -27.2% Fibonacci expansion line and 50% Fibonacci line are located .In an alternative scenario, price could go back down to retest the 1st support at 140.356, where the -61.8% Fibonacci expansion line and previous low are located

Areas of consideration:

• H4 time frame, 1st resistance at 143.512
• H4 time frame, 1st support at 140.356

DXY:

On the H4 chart, the overall bias for DXY is bearish. To add confluence to this, the price is below the Ichimoku cloud which indicates a bearish market. If this bearish momentum continues, price could break the 1st support line at 106.396 where the 38.2% fibonacci line is located, before heading towards the 2nd support at 104.815 where the previous low and the 0% Fibonacci line are located. In an alternative scenario, price could head back up and retest the 1st resistance line at 107.682, where the previous low and 100% Fibonacci line are located. If this 1st resistance line is broken, the 2nd resistance is located at 109.348, where the 78.6% Fibonacci line is located

Areas of consideration:

• H4 time frame, 1st resistance at 107.682
• H4 time frame, 2nd resistance at 109.348
• H4 time frame, 1st support at 106.396
• H4 time frame, 2nd support at 104.815

EUR/USD:

Looking at the H4 chart, my overall bias for EURUSD is bullish due to the current price being above the Ichimoku cloud, indicating a bullish market. To add confluence to this bias, price has also broken above the ascending trend line. If this bullish momentum continues, expect the price to possibly head back up to retest the 1st resistance at 1.03686, where the previous swing high is located. In an alternate scenario, price could possibly head back down towards the 1st support level at 1.00937, where the 50% Fibonacci line is located.

Areas of consideration :

• H4 1st resistance at 1.03686
• H4 1st support at 1.00937

GBP/USD:

On the H4, the price is moving above the ichimoku cloud, suggesting that the price may break the first resistance level at 1.19008, which corresponds to the 78.6% fibonacci and the previous swing high, before heading to the 2nd resistance line at 1.22770, where the previous swing high is. Alternatively, the price may break the first support level at 1.17381, which is where the previous swing high and 38.2% Fibonacci line are, before moving on to the second support level at 1.13497, which is the 78.6% Fibonacci line.

Areas of consideration:

• H4 1st resistance at 1.19008
• H4 2nd resistance at 1.22770
• H4 1st support at 1.17381

USD/CHF:

The overall bias for USDCHF on the H4 chart is bearish. In addition, the price is below the Ichimoku cloud, indicating a bearish market. If the current bearish trend continues, the price might move back down to retest the first support line at 0.94810, where the 78.6% Fibonacci line is. In an alternate scenario, price could rise towards the first resistance line at 0.96302, where the 78.6% Fibonacci line is.

Areas of consideration

• H4 1st support at 0.94810
• H4 1st resistance at 0.96302

XAU/USD (GOLD):

Looking at the H4 chart, my overall bias for XAUUSD is bullish due to the current price being above the Ichimoku cloud, indicating a bullish market. To add confluence to this bias, price has also broken above the descending channel. If this bullish momentum continues, expect price to possibly head towards the 1st resistance at 1765.050, where the 78.6% Fibonacci line is located. In an alternate scenario, price could possibly head back down towards the 1st support level at 1727.850, where the 38.2% and 61.8% Fibonacci lines are located.

Areas of consideration:

• H4 time frame, 1st resistance at 1765.483
• H4 time frame, 1st support at 1727.850

AUD/USD:

With the price moving above the ichimoku cloud on the H4, we have a bullish bias that the price may break the first resistance at 0.67711, which is in line with the 61.8% fibonacci line, before heading towards the 2nd resistance line at 0.69161, the previous swing high. Alternatively, the price could fall to the first support level at 0.65398, which is marked by the 50% Fibonacci line.

Areas of consideration

• H4, 1st resistance at 0.67711
• H4, 2nd resistance at 0.69161
• H4, 1st support at 0.65398

NZD/USD:

On the H4 chart, the price is moving above the Ichimoku cloud and has broken out of the ascending channel. If this bullish momentum continues, the price may break the 1st resistance at 0.61632, which is in line with the previous swing high and 0% fibonacci line, before heading towards the 2nd resistance line at 0.62504, where the 78.6% Fibonacci line is. Alternatively, the price may head back towards the 1st support at 0.59998, where the 61.8% Fibonacci projection line is located.

Areas of consideration:

• H4 time frame, 1st resistance at 0.61632
• H4 time frame, 1st support at 0.59998

USD/CAD:

On the H4 chart, the overall bias for USDCAD is bearish. To add confluence to this, the price is below the Ichimoku cloud which indicates a bearish market. If this bearish momentum continues, expect the price to head down towards the 1st resistance line at 1.34675, where the 50% Fibonacci line and 78.6% Fibonacci projection line is. In an alternative scenario, price could head back down to retest the 1st support line at 1.33578, where the -27.2% Fibonacci expansion line and 141.4% Fibonacci line is.

Areas of consideration:

• H4 time frame, 1st resistance at 1.34675
• H4 time frame, 1st support at 1.33578

OIL: 

Looking at the H4 chart, my overall bias for BCOUSD is bearish due to the current price being below the Ichimoku cloud, indicating a bearish market. If this bearish momentum continues, expect price to possibly head towards the 1st support at 86.587, where the 127.2% Fibonacci extension line is located. In an alternate scenario, price could possibly head back up towards the 1st resistance level at 89.452, where the previous swing low is located.

Areas of consideration:

• H4 time frame, 1st resistance at 89.452
• H4 time frame, 1st support at 86.587
• H4 time frame, 2nd support at 89.452

Dow Jones Industrial Average:

On the H4 chart, the overall bias for DJI is bullish. To add confluence to this, the price is above the Ichimoku cloud which indicates a bullish market. If this bullish momentum continues, expect the price to possibly head towards the 1st resistance at 34106.01 where the previous high and 100% Fibonacci line is located. In an alternative scenario, price could head towards the 1st support line at 32135.41, where 2 of the 61.8% Fibonacci lines are located.

Areas of consideration:

• H4 time frame, 1st support at 32135.41
• H4 time frame, 1st Resistance at 34106.01

DAX:

The H4 chart shows a bullish bias, with price breaking through the descending trendline and rising above the Ichimoku cloud. Price is expected to maintain its bullish momentum and rise to the first resistance level at 14709, where the previous swing high is located. Alternatively, the price could fall to the first support level at 13941, which corresponds to the 20% Fibonacci line.

Areas of consideration:

• H4 time frame, 1st resistance is at 14709
• H4 time frame, 1st support is at 13941

ETHUSD:

Looking at the H4 chart, my overall bias for XXX is bearish due to the current price being below the Ichimoku cloud, indicating a bearish market .If this bearish momentum continues, expect price to possibly head towards the 1st support at 1064.49, where the -27.2% Fibonacci expansion line and 127.2% Fibonacci extension line are located. In an alternate scenario, price could possibly head back up towards the 1st resistance level at 1190.61, where the previous swing low is located.

Areas of consideration:

• H4 time frame, 1st resistance of 1190.61
• H4 time frame, 1st support at 1064.49

BTCUSD:

On the H4 chart, the overall bias for BTCUSD is bearish. To add confluence to this, the price is below the Ichimoku cloud which indicates a bearish market. If this bearish momentum continues, expect the price to head towards the 1st support line at 15525.96, where the 127.2% Fibonacci extension line and -61.8% Fibonacci expansion line is located. If price breaks the 1st support line, price could possibly head towards the 2nd support line at 12040.03 where the -61.8% Fibonacci expansion line is located. In an alternative scenario, price could head back up to retest the 1st resistance line at 18173.33, where the previous low and 0% Fibonacci line is located.

Areas of consideration:

• H4 time frame, 1st resistance 18173.33
• H4 time frame, 1st support at 15525.96
• H4 time frame, 2nd support at 12040.03

S&P 500:

The overall bias for the S&500 on the H4 chart is bullish, with prices above the Ichimoku cloud. If the bullish momentum continues, the price will rise to the first resistance line at 4011.74, where the 61.8% Fibonacci line is located. If the first resistance line is broken, the second resistance line is at 4119.28, which is the previous swing high and the 78.6% Fibonacci line. In an alternate scenario, price could return to the first support line at 3805.83, where the 38.2% Fibonacci line is located.

Areas of consideration:

• H4 time frame, 1st support at 3805.83
• H4 time frame, 1st resistance at 4011.74
• H4 time frame, 2nd resistance at 4119.28

Daily Pivots: (S1) 1.1766; (P) 1.1837; (R1) 1.1895; More...

GBP/USD is staying inside tight range below 1.2028 as sideway consolidation continues. Intraday bias remains neutral first, and further rally is expected as long as 1.1644 resistance turned support holds. On the upside, break of 1.2028 will resume whole rise from 1.0351 to 100% projection of 1.0351 to 1.1494 from 1.1145 at 1.2288. However, sustained break of 1.1644 will bring deeper fall to 1.1145 support instead.

In the bigger picture, rise from 1.0351 medium term bottom is at least correcting whole down trend from 1.4248 (2021 high). Further rise is expected as long as 1.1145 support holds. Next target is 61.8% retracement of 1.4248 to 1.0351 at 1.2759.

Dollar's rebound stalled once again quickly, as risk markets appear to have stabilized. Overall, Swiss Franc is following the greenback as the second strongest for the week so far, then Canadian. Yen is the worst performer, followed by Aussie and Kiwi. Euro and Sterling are mixed with Sterling having an upper hand. Canadian retail sales will be a feature of the day while many central bankers will speak. Hopefully, there would be some more decisive market actions.

Technically, USD/CAD is now pressing 1.3494 support turned resistance. Decisive break there will indicate that correction from 1.3976 has completed with three waves down to 1.3224. More important, that would be successful defense of 1.3222 key resistance turned support, and reinforce medium term bullishness. In this case, there's prospect of retesting 1.3976 high next.

In Asia, at the time of writing, Nikkei is up 0.70%. Hong Kong HSI is down -0.39%. China Shanghai SSE is up 0.75%. Singapore Strait Times is up 0.51%. Japan 10-year JGB yield is up 0.0007 at 0.246. Overnight, DOW dropped -0.13%. S&P 500 dropped -0.39%. NASDAQ dropped -1.09%. 10-year yield rose 0.007 to 3.825.

Fed Mester: Makes sense that we can slow down a bit

Cleveland Fed President Loretta Mester said yesterday, "we're at a point where we're going to enter a restrictive stance of policy. At that point, I think it makes sense that we can slow down a bit the ... pace of increases."

"We're still going to raise the funds rate, but we're at a reasonable point now where we can be very deliberate in setting monetary policy," she added.

"I think we can slow down from the 75 at the next meeting. I don't have a problem with that, I do think that's very appropriate," Mester said. "But I do think we're going to have to let the economy tell us going forward what pace we have to be at."

"Right now my forecast is that we're going to see some real, good progress on inflation next year," Mester said. "We won't be back to 2%, but we'll see some meaningful progress next year. But if we don't see that, then we're going to have to make sure our policy really reacts to the incoming information. So I can't tell you today what the path going forward will be."

Fed Daly: Premature to take anything off the table

San Francisco Fed President Mary Daly said yesterday that "it's premature in my mind to take anything off the table", regarding the size of rate hike in December. She added. "I'm going into the meeting with the full range of adjustments that we could make on the table.

Daly also said recent CPI data was "way too early to cause a turning point on inflation... One month does not a victory make. It doesn't give me comfort. We will need more good months of data before call this a turning point."

"As we work to bring policy to a sufficiently restrictive stance -- the level required to bring inflation down and restore price stability -- we will need to be mindful," Daly also said. "Adjusting too little will leave inflation too high. Adjusting too much could lead to an unnecessarily painful downturn."

ECB Centeno: Many conditions in place for less than 75bps hike

ECB Governing Council member Mario Centeno was asked yesterday about whether the central bank should hike by less that 75bps in December. He said, "I think there are conditions in place -- many conditions -- for the increase to be less than that number".

Centeno also noted that "rates in Europe continue to be roughly half those in the United States", and that's a good indicator of the difference between the economic fundamentals of the two regions. He also urged restraint in wage growth and company margins as that "could help the ECB a lot in combating inflation".

NZ goods exports rose 14% yoy in Oct, imports surged 24% yoy

New Zealand goods exports rose 14% yoy to NZD 6.1B in October. Goods imports rose 24% yoy to NZD 8.3B. Trade deficit widened from NZD -1.7B to NZD -2.1B, much larger than expectation of NZD -1.7B.

Annual goods expects, comparing with the year ended October 2021, rose 14% to NZD 71.1B. Annual goods imports rose 25% to NZD 84.0B. Annual trade deficit swelled to fresh record of NZD -12.9B, comparing to NZD -4.9B a year ago.

Looking ahead

UK public sector net borrowing and Eurozone current account will be released in European session. Later in the day, Canada retail sales will take center stage, while new housing price index will also be published.

GBP/USD Daily Outlook

Daily Pivots: (S1) 1.1766; (P) 1.1837; (R1) 1.1895; More...

GBP/USD is staying inside tight range below 1.2028 as sideway consolidation continues. Intraday bias remains neutral first, and further rally is expected as long as 1.1644 resistance turned support holds. On the upside, break of 1.2028 will resume whole rise from 1.0351 to 100% projection of 1.0351 to 1.1494 from 1.1145 at 1.2288. However, sustained break of 1.1644 will bring deeper fall to 1.1145 support instead.

In the bigger picture, rise from 1.0351 medium term bottom is at least correcting whole down trend from 1.4248 (2021 high). Further rise is expected as long as 1.1145 support holds. Next target is 61.8% retracement of 1.4248 to 1.0351 at 1.2759.

Economic Indicators Update

GMT	Ccy	Events	Actual	Forecast	Previous	Revised
21:45	NZD	Trade Balance (NZD) Oct	-2129M	-1715M	-1615M	-1696M
07:00	GBP	Public Sector Net Borrowing (GBP) Oct			19.2B
09:00	EUR	Eurozone Current Account (EUR) Sep		-20.3B	-26.3B
13:30	CAD	New Housing Price Index M/M Oct		0.20%	-0.10%
13:30	CAD	Retail Sales M/M Sep		1.10%	0.70%
13:30	CAD	Retail Sales ex Autos M/M Sep		1.00%	0.70%
15:00	EUR	Eurozone Consumer Confidence Nov P		-26	-28