18/11/2022 Daily Reports
- EURUSD is battling back, down some 0.5% still, however, having fallen from a high of 1.0406 to a low of 1.0305. US Treasury yields increased on Thursday as investors bet on a relatively hawkish Federal Reserve.
- The greenback was pressured in recent days due to last week’s and this week’s inflation data missing the mark vs. expectations. This had fanned the flames of the expectations of a Fed pivot while some of the Federal Reserve commentaries that accompanied the data implied that it could soon slow the pace of its interest rate hikes. However, a switch in sentiment on Thursday gave rise to a bid in the greenback once again.
- Consequently, it was a bearish start to the day with US benchmarks in the red, US yields higher along with a firmer US Dollar. The dollar index, which measures the currency against six major peers, was recently up 0.50% at 106.81 in midday trade. The index has traveled between a range of 106.098 and 107.240 on the day. However, the index remains in bearish territories while below 107.00. After hitting a 20-year high in late September the index had lost more than 8% when it touched its most recent intraday low on Tuesday.
- The EUR/USD pair is trading near the 1.0360, down for the day with bullish stance in daily chart. The pair stabilized above 20 and 50 SMA, indicates bullish strength. Meanwhile, the 20 SMA continued accelerating north and developing above longer ones, suggests bulls not exhausted yet. On upside, the immediate resistance is 1.0480, break above this level will extend the advance to 1.0600.
- Technical readings in the daily chart support the bullish stances. The RSI indicators hovering above the midlines and stabilized around 68. The Momentum indicator stabilized above the midline, indicating upward potentials. On downside, the immediate support is 1.0270 and below this level will open the gate to 1.0200.
- The GBPUSD pair dropped further during the American session and bottomed at 1.1760. It then trimmed losses rising back toward 1.1850. It is losing 60 pips on Thursdays, after US data and UK’s budget presentation.
- On Thursday in the United Kingdom, Chancellor of the Exchequer, Jeremy Hunt presented the Autumn Statement, the budget of the Primer Minister Rishi Sunak. The budget was largely as expected by analysts. Hunt presented an increase in taxes of £55 billion and spending cuts in order to restore the UK’s fiscal reputation after a chaotic September and October.
- Economic data from the US showed an unexpected decline in the Philly Fed to -19.4 in November from -8.7. Continuing Jobless Claims rose to the highest level since April. Housing Starts and Building Permits dropped less-than-expected. The US Dollar initially dropped after the reports, trimming gains but after a few minutes it resumed the upside, hitting fresh daily highs.
- The GBP/USD offers bullish stance in daily chart. Cable stabilized above all main SMAs, indicating bullish strength in short term. Meanwhile, the 20 SMA continued accelerating north and developing above longer ones, suggests bulls not exhausted yet. On upside, The immediate resistance is 1.2030 with a break above it exposing to 1.2150.
- Technical readings in the daily chart support the bullish stances. RSI indicator stabilized around 60, while the Momentum indicator stabilized above the midline, suggesting upward potentials. On downside, the immediate support is 1.1750, unable to defend this level will resume the decline to 1.1640.
- Gold Price drops, eyeing a test of the weekly lows around $1753, following hawkish Fed commentary, amidst a tranche of US economic data released that underpinned the Dollar. Also, a jump in US Treasury bond yields weighed on the yellow metal. At the time of writing, gold is trading at $1761, below its opening price by 0.80%, after hitting a daily high of $1774.80.
- Sentiment shifted sour as Fed policymakers emphasized the need to tackle inflation, led by the St. Louis Fed President James Bullard. Bullard said, “Even under these generous assumptions, the policy rate is not yet in a zone that may be considered sufficiently restrictive.” In his presentation, he showed charts that showed rates might be “sufficiently restrictive” at around 5% to 7% and called his colleagues to raise rates further if they’re to achieve the Fed’s 2% goal.
- Data-wise, a busy economic calendar in the United States would entertain Gold traders, led by unemployment claims and housing data. Initial Jobless Claims for the week ended on November 12 dropped 222K, below estimates of 225K and the previous week’s 226K. Contrarily Continuing Claims rose 13K, to 1.51 million, in the week ended on November 5, increasing for the fifth straight week, an uptrend signing that Americans are out of work for longer.
- Gold price stabilized around 1761, down for the day and bullish in the daily chart. The gold price stabilized above 20 and 50 SMA, suggesting bullish strength. Meanwhile, the 20 SMA started turning north and heading towards longer ones, indicating bulls not exhausted yet. On upside, the immediate resistance is 1787, break above this level will open the gate to extend the advance to 1800 area.
- From a technical perspective, the RSI indicator hold above the midline and stabilized around 65, suggesting bullish strength. The Momentum indicator stabilized above the midline, suggests upward potentials. On downside, the immediate support is 1747, below this area may resume the decline to 1732.
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- The USDJPY pair continues to show resilience below the 139.00 round figure and regains some positive traction Thursday. The momentum lifts spot prices to a fresh daily top during the US session, with bulls still awaiting a convincing breakout through the 140.80 level.
- The intraday uptick is sponsored by the emergence of some buying around the US Dollar, bolstered by a goodish pickup in the US Treasury bond yields. Wednesday’s upbeat US Retail Sales data forces market participants to scale back their bets for a less aggressive policy tightening by the Federal Reserve and acts as a tailwind for the US bond yields.
- Moreover, the US central bank is expected to hike interest rates by a relatively smaller 50 bps at the next meeting in December. In contrast, the Bank of Japan remains committed to its ultra-loose monetary policy, marking a big divergence in comparison to a more hawkish Fed. This, in turn, weighs on the Japanese Yen and further offers support to the USDJPY pair.
- The USD/JPY pair stabilized around 140.20, up for the day and bearish in the daily chart. The price still maintains the downward slope and upside got strong resistance from 200 SMA, suggests bearish strength in short term. Meanwhile, 20 SMA started turning south and heading towards longer ones, indicating bears not exhausted. On upside, overcome 140.80 may encourage bulls to challenge 142.50, break above that level will open the gate to 145.30.
- Technical indicators suggest the bearish strength. RSI stabilized around 35, while the Momentum indicator continued developing below the midline, suggests downward potentials. On downside, the immediate support is 139.00, break below this level will open the gate to 137.60 area.
- DJI under the sell pressure in the early half of the day, tumbled from intraday high 33730 to intraday low 33188. It bounced sharply and ended Thursday at around 33550, unchanged for the day and neutral to bearish in the hourly chart. The price stabilized near 20 and 50 SMA, suggests directionless strength. Meanwhile, 20 and 50 SMA started turning flat but continued developing above 200 SMA, suggests bulls not exhausted in the long term yet. On upside, overcome 34030 may encourage bulls to challenge 34030, break above this level will open the gate to 34300.
- Technical indicators suggest the neutral to bearish strength. RSI stabilized around 50, while the Momentum indicator stabilized below the midline, suggests downward potentials. On downside, the immediate support is 33300, break below this level will open the gate for more decline to 33200 area.
- Brent under the strong sell pressure, retreated from intraday high 92.90 to intrade low 89.50 area, it then bounded modestly and ended Thursday at around 90.20, down for the day and bearish in the hourly chart. The price stabilized below all main SMAs, suggests bearish strength in short term. Meanwhile, the 20 SMA continued accelerating south and developing below longer ones, indicating bearish bias. On upside, overcome 91.50 may encourage bulls to challenge 93.00, break above this level will open the gate to 94.80.
- Technical indicators suggest the bearish movement, hovering below the midline. RSI stabilized at around 32, while the Momentum indicator stabilized below the midline, suggests downward potentials. On downside, the immediate support is 89.50, break below this level will open the gate for more decline to 87.50 area.
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