Sample Category Title

Daily Pivots: (S1) 1.3192; (P) 1.3230; (R1) 1.3253; More...

Outlook in GBP/USD remains unchanged and intraday bias stays neutral. Focus stays on 1.3164 medium term fibonacci level. Sustained break there will carry larger bearish implication, and target 161.8% projection of 1.4248 to 1.3570 from 1.3833 at 1.2736. On the upside, though, break of 1.3351 support turned resistance will indicate short term bottoming, and turn bias back to the upside for 1.3512 resistance next.

In the bigger picture, immediate focus is now on 38.2% retracement of 1.1409 to 1.4248 at 1.3164. Sustained break there will argue that whole rise from 1.1409 has completed at 1.4248, after rejection by 1.4376 long term resistance. That will revive some medium term bearishness and and target 61.8% retracement at 1.2493. However, strong rebound from current level will revive that case and up trend from 1.1409 is still in progress, and probably ready to resume.

Daily Pivots: (S1) 0.9199; (P) 0.9228; (R1) 0.9251; More....

Intraday bias in USD/CHF remains neutral for the moment, and outlook is unchanged. On the upside, break of 0.9274 will suggest that the pull back from 0.9372 is finished. Intraday bias will be turned back to the upside for 0.9372. On the downside, below 0.9156 will target 0.9084 support. Firm break there should confirm that choppy rise from 0.8925 has completed, and suggests that fall from 0.9471 is resuming. Deeper decline would be seen through 0.8925.

In the bigger picture, the corrective structure of the rebound from 0.8925 argues that fall from 0.9471 is not complete yet. It could either be the second leg of pattern from 0.8756 (2021 low), or resuming larger down trend from 1.0237 (2018 high). We'd pay attention to the downside momentum and assess the odds later. But for now, medium term outlook will be neutral at best as long as 0.9471 resistance holds.

Daily Pivots: (S1) 113.32; (P) 113.53; (R1) 113.78; More...

Intraday bias in USD/JPY remains neutral and outlook is unchanged. On the downside, sustained break of 112.71 will argue that it's already correcting whole rise from 102.58. Deeper fall would be seen to 38.2% retracement of 102.58 to 115.51 at 110.57. On the upside, break of 113.94 minor resistance will turn bias back to the upside for retesting 115.51 high instead.

In the bigger picture, no change in the view that rise from 102.58 is the third leg of the up trend from 101.18 (2020 low). Such rally should target a test on 118.65 (2016 high) on resumption. However, firm break of 109.11 structural support will argue that the trend might have reversed and bring deeper fall to 107.47 support and possibly below.

Daily Pivots: (S1) 1.2735; (P) 1.2778; (R1) 1.2850; More...

Intraday bias in USD/CAD remains on the upside for 1.2852 at this point. Break there will confirm resumption of whole rally from 1.2286 and target 1.2947 resistance. On the downside, below 1.2738 minor support will turn intraday bias neutral first, and bring consolidations. But further rise will remain in favor as long as 1.2604 support holds.

In the bigger picture, medium term outlook remains neutral for now. The pair drew support from 1.2061 cluster and rebounded. Yet, upside was limited below 38.2% retracement of 1.4667 to 1.2005 at 1.3022. On the upside, firm break of 1.3022 should affirm the case of medium term bullish reversal. However, break of 1.2286 will turn focus back to 1.2005 low again.

Daily Pivots: (S1) 0.7105; (P) 0.7141; (R1) 0.7170; More...

AUD/USD's break of 0.7116 minor support suggests that rebound from 0.6992 has completed at 0.7185. Intraday bias is back on the downside for retesting 0.6992 low. Sustained break of 0.6991 key medium term structural support will carry larger bearish implication and resume the fall from 0.8006. On the upside, though, above 0.7185 will resume the rebound from 0.6992 to EMA (now at 0.7259).

In the bigger picture, sustained break of 0.6991 structural support will argue that the whole up trend from 0.5506 might be finished at 0.8006, after rejection by 0.8135 long term resistance. Deeper decline would then be seen back to 61.8% retracement of 0.5506 to 0.8006 at 0.6461). For now, medium term outlook will stay bearish as long as 0.7555 resistance holds, in case of rebound.

Dollar and Yen rise following slightly negative risk sentiment. Major Asian indexes are generally lower, following the mild pull back in US overnight. Australian Dollar is leading commodity currencies lower. European majors are mixed with Euro trading a bit firmer than the others. Focuses will firstly turn to UK employment data and US PPI today. But there are main events of five central bank meetings ahead, starting with Fed tomorrow.

Technically, NZD/USD is making downside progress and is now eyeing 0.6735 minor support. Break there will resume the fall from 0.7217, as well as larger pattern from 0.7463 high. At the same time, we'll also monitor USD/CAD and AUD/USD. Break of 1.2852 resistance in USD/CAD will resume the rise from 1.2286. AUD/USD is still far away from 0.6992 low, but break there will resume larger fall from 0.8006. These developments, if happen together, could signal a turn in overall market sentiments.

In Asia, at the time of writing, Nikkei is down -0.80%. Hong Kong HSI is down -1.26%. China Shanghai SSE is down -0.31%. Singapore Strait Times is up 0.12%. Japan 10-year JGB yield is down -0.0010 at 0.049. Overnight, DOW dropped -0.89%. S&P 500 dropped -0.91%. NASDAQ dropped -1.39%. 10-year yield dropped -.065 to 1.424.

BoC Macklem: Medium and longer-run inflation expectations well anchored on target

The Bank of Canada agreed with the federal government to keep the flexible inflation targeting framework the next five years. Also, monetary should continue to support maximum sustainable employment.

Governor Tiff Macklem said, "even as the complications of reopening the global economy have caused inflation in Canada and many other countries to rise, medium and longer-run inflation expectations in Canada have remained well anchored on the 2 percent target."

"Keeping inflation expectations well anchored is key to completing the recovery and getting inflation back to target," he noted.

Australia NAB business confidence dropped to 12, come back to earth

Australia NAB business confidence dropped from 20 to 12 in November. Business conditions improved from 10 to 12. Looking at some details, trading conditions rose from 15 to 16. Profitability conditions rose were unchanged at 8. Employment conditions rose from 6 to 11.

"Confidence remains high across states and industries, albeit it has come back to earth a little after the optimism associated with the end of lockdowns," said NAB Chief Economist Alan Oster.

"Forward indicators are also very strong with a rise in capital expenditure a welcome sign that businesses are beginning to look towards a period of expansion. These results align with the strong rebound in activity that we believe is now underway, as well as a positive outlook for the coming months with vaccination rates now very high."

Looking ahead

UK employment, Swiss PPI and Eurozone industrial production will be released in European session. US PPI is the main feature later in the day.

AUD/USD Daily Report

Daily Pivots: (S1) 0.7105; (P) 0.7141; (R1) 0.7170; More...

AUD/USD's break of 0.7116 minor support suggests that rebound from 0.6992 has completed at 0.7185. Intraday bias is back on the downside for retesting 0.6992 low. Sustained break of 0.6991 key medium term structural support will carry larger bearish implication and resume the fall from 0.8006. On the upside, though, above 0.7185 will resume the rebound from 0.6992 to EMA (now at 0.7259).

In the bigger picture, sustained break of 0.6991 structural support will argue that the whole up trend from 0.5506 might be finished at 0.8006, after rejection by 0.8135 long term resistance. Deeper decline would then be seen back to 61.8% retracement of 0.5506 to 0.8006 at 0.6461). For now, medium term outlook will stay bearish as long as 0.7555 resistance holds, in case of rebound.

Economic Indicators Update

Australia NAB business confidence dropped from 20 to 12 in November. Business conditions improved from 10 to 12. Looking at some details, trading conditions rose from 15 to 16. Profitability conditions rose were unchanged at 8. Employment conditions rose from 6 to 11.

"Confidence remains high across states and industries, albeit it has come back to earth a little after the optimism associated with the end of lockdowns," said NAB Chief Economist Alan Oster.

"Forward indicators are also very strong with a rise in capital expenditure a welcome sign that businesses are beginning to look towards a period of expansion. These results align with the strong rebound in activity that we believe is now underway, as well as a positive outlook for the coming months with vaccination rates now very high."

Full release here.

The Bank of Canada agreed with the federal government to keep the flexible inflation targeting framework the next five years. Also, monetary should continue to support maximum sustainable employment.

Governor Tiff Macklem said, "even as the complications of reopening the global economy have caused inflation in Canada and many other countries to rise, medium and longer-run inflation expectations in Canada have remained well anchored on the 2 percent target."

"Keeping inflation expectations well anchored is key to completing the recovery and getting inflation back to target," he noted.

STOCKS

Most indices have fallen globally and need to bounce back from respective supports to keep the near term ranges intact. Dow and Dax have fallen and need to hold above 35000 and 15500 to move up again in the coming sessions. Nikkei too needs to sustain above 28000 to move up slowly. Shanghai has held below 3700 and can fall towards 3650-3600. Nifty and Sensex can see a fall today.

Dow (35650.95, -320.04, -0.89%) has come down sharply breaking below the support at 35750. A test of 35000 is possible now before we see a rise again.

DAX (15621.72, -1.59, -0.010%) has come down after testing a high of 15794.31. The range of 15800-15500 mentioned previously has held very well. Any break above 15800 if seen and sustained can take the index towards 15900 or higher soon. While below 15800, we continue to look at 15800-15500 to hold.

Nikkei (28504.15, -136.34, -0.48%) has managed to close above 28500. While above 28500, a slow rise to 29000/29500 is possible. Else, a sharp fall below 28500 will indicate bearishness towards 28000.Watch which way the index moves from here.

Shanghai (3664.59, -16.49, -0.44%) has come down today. The resistance mentioned at 3700 has held well. While below 3700, a fall back to 3500 is possible.

Nifty (17368.25, -143.05, -0.82%) fell sharply yesterday after opening higher. While below 17400, a fall towards 17200 /17000 is possible in the coming sessions. Upside is limited to 17800 in the very near term.

Sensex (58283.42, -503.25, -0.86%) has come down yesterday. A range of 58000-59000 is possible before we see a break on either side.

COMMODITIES

Crude prices have moved up well but have immediate resistances coming up which if holds can produce a fall again soon. Watch price action near 77 on Brent and near 73 on WTI which if hold can produce a decline. Gold and Silver are ranged within 1760-1790 and 21/22-24 respectively and may move up which supports hold. Copper can trade within 4.40-4.25 before breaking on either side of the range.

Brent (73.96) and WTI (70.81) have both fallen sharply as expected. Brent may trade within 77/78-74/73 for now and a break below 73, if seen can take it further down in the medium term, while WTI can range within 70-73/74. Unless a break on either side is seen, we would continue to see the mentioned ranges to hold.

Gold (1787.10) an Silver (22.24) have both been stable and need to show a sharp movement on either side to indicate the direction from here. We look for a range of 1790-1760 for Gold and 24-21 on Silver to hold for the medium term.

Copper (4.2630) is testing the immediate support near 4.25 which if holds can take it higher to 4.40/45. We continue to look at the 4.40-4.25 range unless broken on either side.

FOREX

Dollar Index has risen and could be headed towards 96.60-97 before falling from there. Euro too can fall to test 1.1255 before bouncing back from there. The broad range of 114-112 is holding for now. EURJPY is ranged within 129-127.50 while Pound looks likely to break below 1.32 to head towards 1.3150or lower. Dollar Yen can rise towards 114 while the Dollar Index rises. USDCNY is bearish for a slow fall to 6.34. USDINR can test 76.0-76.20 before reversing from there.

Dollar Index (96.415) bounced back from 96 yesterday and continues to rise today. A test of 97 can be possible on a break above 96.60 but thereafter we need to see which way the index moves. We continue to look at the broad 97-95.50 range for the near term.

Euro (1.1280) has immediate support near 1.1255 which needs to hold in order to see a rise to 1.1350 or higher. As mentioned yesterday, we look for a broad range of 1.12-1.14 to hold for now.

EURJPY (128.18) seems to be fluctuating within 128.50-127.65 over the past 3-sessions. A broad 129-127.50 range is holding for now and unless we see a break on either side of the range, it is difficult to get clarity on further direction from here.

Aussie (0.7111) has fallen over yesterday and today to head to the lower end of the 0.72-0.71 range mentioned yesterday. If it manages to break below 0.71, it can drag itself lower towards 0.7050 or even 0.70 before attempting to bounce back from there.

Pound (1.32) has fallen and seems to be on the verge of breaking below 1.32 to head lower towards 1.3150 soon. If it does not manage to bounce from 1.1350, it can be vulnerable to further bearishness in the longer run. Watch price action near 1.3150.

Dollar-Yen (113.64) is holding well below immediate support at 113.20 and needs to break above 114 to head higher. Till then the 112-114 range may continue to hold.

USDCNY (6.3660) rose slightly but is broadly bearish for a fall to 6.34 soon. Thereafter we need to see if it breaks further below 6.34 to head towards 6.30. Overall medium term trend is bearish.

{USDINR (75.77) dipped initially yesterday but bounced back to close higher. A rise above 75.80/85 today can pave way for a test of 76.0-76.20 on the upside before a reversal sets in.

INTEREST RATES

The US Treasury yields have declined sharply at the far-end yesterday. We expect the yields to remain in a broad sideways range. While the range holds, the chances are high for the yields to move up within the range in the coming weeks. Can the US Federal Reserve meeting outcome tomorrow provide the possible trigger to move up? We will have to wait and see. The German yields are coming down in line with our expectation and are keeping our bearish view intact. The European Central Bank (ECB) meeting on Thursday will need a close watch. The 10Yr and 5Yr GoI continues to trade mixed within their broad range. We see chances of a rise in the near-term within the range before coming down again.

The US 2Yr (0.64%), 5Yr (1.21%), 10Yr (1.42%) and the 30Yr (1.80%) yields have declined sharply. We reiterate that 1.35%-1.65% (10Yr) and 1.7%-2% (30Yr) will be the broad range of trade possible for some time. While above 1.35% (10Yr) and 1.7% (30Yr) we retain our view of seeing a rise within this range 1.65% (10Yr) and 2% (30Yr) in the coming weeks.

The German 2Yr (-0.72%), 5Yr (-0.61%), 10Yr (-0.39%) and 30Yr (-0.08%) yields are coming down in line with our expectation indeed, a little sharply at the far-end. Our bearish view of testing -0.45% / -0.5% (10Yr) and -0.1% / -0.2% (30Yr) on the downside remains intact.

The Indian 10Yr (6.3707%) and 5Yr (5.6884%) continues to trade mixed within their broad range. 6.3%-6.4% on the 10Yr and 5.62%-5.73% on the 5Yr is the preferred range of trade. On the charts, though a two-way possibility looks likely from here, the bias remains inclined towards seeing a rise towards the upper end of the above-mentioned ranges before the 10Yr and 5Yr GoI comes down again.

Key Highlights

• GBP/USD is consolidating losses above the 1.3200 support.
• A crucial bearish trend line is forming with resistance near 1.3240 on the 4-hours chart.
• EUR/USD is stuck below the 1.1400 resistance zone.
• Gold price could attempt a fresh increase above $1,800.

GBP/USD Technical Analysis

The British Pound remained in a bearish zone below 1.3300 against the US Dollar. GBP/USD is now consolidating losses above the 1.3200 support zone.

Looking at the 4-hours chart, the pair settled below the 1.3300 resistance zone. There was also a break below the 1.3200 level, and a close below the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

A low was formed near 1.3160 and the pair is now consolidating losses. There was a minor recovery wave above the 23.6% Fib retracement level of the downward move from the 1.3513 swing high to 1.3160 low.

On the upside, the bulls are now facing resistance near the 1.3240 level. There is also a crucial bearish trend line forming with resistance near 1.3240 on the same chart.

The next key resistance is near the 50% Fib retracement level of the downward move from the 1.1608 swing high to 1.1186 low at 1.3335. A clear break above the 1.3300 and 1.3335 resistance levels could open the doors for a steady upward move.

If not, there could be a fresh decline below the 1.3200 support. The next major support is near the 1.3150 level, below which the pair could decline heavily.

Looking at EUR/USD, the pair is consolidating losses and it could gain pace if there is a clear move above the 1.1400 resistance.

Economic Releases

• UK Claimant Count Change for Nov 2021 – Forecast -13.0K, versus -14.9K previous.
• UK ILO Unemployment Rate Feb 2021 (3M) – Forecast 5.2%, versus 5.1% previous.