Forex, Commodities, Crypto Market Analysis by Solid ECN

Gold hovers near two-week lows ahead of Fed’s minutes

Gold prices settled in European trade in a tight range of trading near two-week lows as investors shun new positions ahead of the Fed’s last meeting minutes. The minutes will provide clues on the future of US monetary policy and the pace of interest rates.

Prices Today

Gold prices traded around $1,738 an ounce as of 08:55 GMT, with a session-high at $1,745. Gold prices closed Tuesday over 0.1% higher, the first profit in five sessions away from two-week lows at $1,732.50.

The Fed

As of 19:00 GMT, the Federal Reserve will release the minutes of the November 1-2 meeting, at which policy makers voted to increase interest rates by 75 basis points for the fourth time in a row to 4%, the highest since December 2007. The Fed asserted back then the fight against inflation requires continuous increases in borrowing rates until consumer prices are brought under control.

Interest Rate Prospects

Markets now are pricing a 75% chance of a 0.5% rate hike in December, and a 25% chance of a 0.75% rate hike.

Estimates

Markets remain a bit jittery ahead of Fed’s minutes, with some analysts expecting some modest gains for gold prices until year’s end as the dollar weakens gradually.

The SPDR

Gold holdings at the SPDR Gold Trust rose 0.87 tones yesterday, the second increase in a row to a total of 906.93 tones, the highest since November 14.

XRPUSD - Authorities are preparing to introduce restrictions for the crypto sector

In general, the market remains negatively affected by the bankruptcy of the FTX exchange, which continues to cause an outflow of investors’ funds from digital assets and may lead to the introduction of restrictions for cryptocurrency entrepreneurship by the authorities. It should be noted that US Treasury Secretary Janet Yellen and Deputy Governor of the Bank of England John Cunliffe have already spoken out for the soonest strengthening of regulation of the sector, and representatives of the American Financial Industry Regulatory Authority (FINRA) have announced an audit of the advertising policy of companies. The current market situation is pushing global regulators to designate clearer rules of operation, but some experts believe that they will only complicate the business conditions for many projects.

Technically, the price has reversed from the 0.3418 mark (Murray [-1/8]) and is aiming for the 0.3906 level (Murray [0/8], the middle line of the Bollinger Bands), which is the key for the “bulls”. In case of its breakout, the growth may continue to the levels of 0.4330 (Fibo retracement 23.6%) and 0.4630. The most important level for the “bears” remains 0.3418, a breakdown of which will give the prospect of a decline to the area of 0.3165 (November lows), 0.2930 (Murray [-2/8]).

Resistance levels: 0.3906, 0.4330, 0.4630 | Support levels: 0.3418, 0.3165, 0.2930.

EURUSD - Strong business activity statistics supported the position of the euro

Yesterday, data on business activity in the leading sectors of the EU economy were presented, which was positive for the first time since the end of summer. Thus, Manufacturing PMI in France rose to 49.1 points from 47.2 points earlier, and in Germany – to 46.7 points from 45.1 points, while Manufacturing PMI in the EU amounted to 47.3 points, higher than 46.4 points earlier. As for Services PMI, the upward dynamics here were slightly restrained: in France, the indicator consolidated around 49.4 points, which was lower than 51.7 points earlier, and in Germany, it was 46.4 points against 46.5 points in the month previously. The Composite index for EU countries remained at 48.6 points.

On the daily chart, the trading instrument is correcting, confidently approaching the local highs of the last week around 1.0485. Technical indicators have long since reversed upwards and are strengthening their signal.

Support levels: 1.0328, 1.0095 | Resistance levels: 1.0485, 1.0780

Euro hovers near four-month high on US interest rate prospects

Euro rose in European trade against a basket of major rivals for the third straight session against dollar, almost hitting four-month highs amid fading concerns about the widening policy gap between the US and Europe. The dollar fell to near three-month lows under pressure from Fed’s minutes, which bolstered the case for a 0.5% rate hike in December.

EURUSD rose 0.5% to 1.0448, after closing up 0.9% yesterday, the second profit in a row, as risk appetite improved.

Four-Month Peak

Euro hit four-month highs at 1.0481 on November 15 before entering a descending wave on profit-taking.
Current gains amid fading concerns about the policy gaps between the US and Europe, with the ECB expected to increase interest rates by 75 basis points in December.
It’s now also widely expected the Fed will increase rates by only 0.5% next month instead of 0.75%.

The Dollar

The dollar index fell 0.4% on Thursday, sharpening losses for the third day in a row, and hitting three-month lows at 105.34 against a basket of major rivals.
Fed’s minutes yesterday showed US policymakers are content about the slowdown in inflation, and are moving toward smaller rate hikes.

GBPUSD - Statistics from the US again disappointed investors

The pound is actively gaining in value after the publication of data on business activity in the leading sectors of the economy and the depreciation of the US currency, currently trading around 1.2110.

Thus, UK Manufacturing PMI in November consolidated at 46.2 points, which exceeded the analysts’ forecast of 45.7 points, and Service PMI amounted to 48.8 points, improving the analysts’ forecast of 48.0 points. The Composite PMI rose to 48.3 from 48.2 in October, the first monthly increase since June.

On the daily chart, the trading instrument moves within the local rising channel, reaching the resistance line at 1.2200 yesterday, and technical indicators are preparing for a local correction.

Support levels: 1.1958, 1.163 | Resistance levels: 1.2220, 1.2590

ADAUSD - Murrey analysis

The ADAUSD pair continues to trade within the medium-term downward channel, where it returned at the beginning of this month: at the weekend, the price reached the year’s lows around 0.2945 but is currently trying to restore positions. However, the upside potential is limited by strong resistance 0.3418 (Murrey level [2/8], the middle line of Bollinger bands, the upper border of the downwards channel).

In general, the downward trend in the market continues, which is signaled by a downward reversal of Stochastic and stabilization of the MACD histogram in the negative zone. Under these conditions, the key “bearish” level is 0.2929 (Murrey level [0/8]). The consolidation below it allows a decline to 0.2685 (Murrey level [−1/8]) and 0.2441 (Murrey level [−2/8]). In general, the resumption of the cryptocurrency decline soon seems more likely.

Resistance levels: 0.3173, 0.3418 | Support levels: 0.2929, 0.2685, 0.2441

S&P 500 - Prospects for a slowdown in the US Fed’s “hawkish” rate support the stock market

The American stock market continues to recover its positions against the backdrop of positive signals from the US Federal Reserve, which were received from the minutes of the last meeting of the monetary policy department. According to the published document, the agency acknowledges the serious uncertainty in the economy associated with high interest rates and does not rule out the start of a slowdown in the pace of their adjustment to assess the effect on the economy from the steps already taken. Also, the previous level of stability of the value was revised upwards, and this gives the market a signal that the rate will change next year as well. Thus, analysts confirmed their confidence in the continued tightening of monetary stimulus by the US Federal Reserve, but at the December meeting, they expect an increase of 50,0 basis points, and not 75,0 basis points, as it was in November.

The index quotes continue the local corrective trend, and on the daily chart, they still form a Flag pattern, rising toward the resistance line, and technical indicators hold a buy signal.

Support levels: 3940, 3746 | Resistance levels: 4126, 4310

USDJPY suffers strong losses

The USDJPY pair suffered strong losses yesterday, as it broke 140.75 level strongly and declined to surpass 139.45 level, which pushed the price to resume the bearish wave on the short term basis, paving the way to achieve new negative targets that start at 137.60 and extend to 136.5.

Therefore, the bearish bias will be suggested for today unless the price managed to breach 139.45 and hold with a daily close above it. The expected trading range for today is between 137.60 support and 139.60 resistance, the expected trend for today is Bearish.

CAC 40 - French stock market continues to rise actively

French companies continue to demonstrate fairly strong financial results, despite another decline in business activity in the country: in November, the figure corrected from 103 points to 101 points against the forecast of 102.0 points. However, at the moment, the attention of investors is drawn to the statement of representatives of the automotive corporation Renault Group on the conclusion of cooperation with the energy companies Engie SA, Voltalia SA and Electricite de France SA for a 15-year supply of electricity from renewable sources, which can cover up to 50% of the needs of the automaker in the country. Recently, the issue of decarbonization of production in France has been quite acute, and reports of a deal may cause approval from the environmental community, allowing the issuer to attract additional investment.

On the daily chart, CAC 40 quotes continue to trade above the resistance line of the descending corridor, and the technical indicators strengthen the buy signal.

Support levels: 6610, 6340 | Resistance levels: 6800, 7160

GBPUSD Technical Analysis

The GBPUSD pair fluctuates within tight track since morning, which keeps the bullish trend scenario valid as it is without any change, depending on the price stability above 1.1990, supported by stochastic approach to the oversold areas, reminding you that we are waiting to rally towards our next positive target that reaches 1.2260.

The expected trading range for today is between 1.2030 support and 1.2210 resistance, and the expected trend for today is Bullish.

Euro maintains gains near four-month highs against dollar

Euro rose in European trade against dollar for the fourth straight session, almost hitting four-month highs amid fading concerns about the policy gap between Europe and the US. The greenback is trading near three-month lows under pressure from Fed’s minutes, which bolstered the case for a 0.5% rate hike in December. EURUSD rose 0.2% to 1.0428, after closing up 0.15% yesterday, the third profit in a row as risk appetite improves in the market.

  • Euro is up over 1% so far this week against dollar on track for the second weekly profit in three weeks.
  • Euro hit four-month highs at 1.0481 earlier this month before entering a wave of losses on active profit-taking.
  • Current gains come amid fading concerns about the policy gap between the US and Europe, with the ECB expected to raise rates by 75 basis points in December.

The Dollar

The dollar index last traded near three-month lows at 105.34 against a basket of major rivals. Latest Federal Reserve minutes showed US policymakers are content about their ability to move forward and raise interest rates in a slower place.

Gold Technical Analysis

Gold price tests the key support 1746.4 and keeps its stability above it until now, which keeps the bullish trend scenario valid for the upcoming period, supported by the EMA50, waiting to resume the bullish bias to visit 1765 initially. On the other hand, we should note that breaking 1746.4 and holding below it will stop the positive scenario and push the price back to the correctional bearish track again, to head towards testing 1721.65 areas initially.

The expected trading range for today is between 1735 support and 1775 resistance, and the expected trend for today is Bullish.

Dollar on track for weekly losses on Fed rates

Dollar fell in European trade on Friday against a basket of major rivals, extending the gains for the fourth day in a row, and almost hitting three-month lows, and on track for the second weekly loss in three weeks following weak US data and the release of Fed’s minutes. Such Fed minutes clearly bolstered the case for a 0.5% rate hike in December and a slower pace of policy tightening.

The Index

The dollar index fell 0.25% to 105.68, with a session-high at 106.16, after closing down 0.2% yesterday, the third loss in a row, edging near three-month lows at 105.34. Dollar is now down 1.2% so far this week on track for the second weekly loss in three weeks.

Weak Data

Recent US data showed manufacturing and services activities tumbled heavily in November, hinting at potential economic recession in the fourth quarter of the year.

The Fed

Fed’s minutes released for the November 1-2 meeting showed most policymakers agreed it’s important to slow down the pace of policy tightening.

Fed Minutes

Chances for a 0.5% rate hike in December by the Fed rose from 75% to 85% after Fed’s minutes, while chances for a 0.75% rate hike fell from 25% to 15%.

AUDUSD - Australian economy shows signs of decline

The reason for the negative dynamics was poor macroeconomic data: according to the Australian Bureau of Statistics, retail turnover in October fell by 0.2% after rising by 0.6% in September, which was the first decline since falling by 4.1% in December 2021 and is a consequence of the weakening in all leading industries, except for products retail trade. The leaders of the negative movement were department stores, which lost 2.4%, closely followed by the clothing trade sector (–2.0%), and for the first time since January, the indicators of restaurants and cafes decreased (–0.4%). ABS Head of Retail Statistics Ben Dorber said the correction results from higher interest rates and could be long-term.

On the daily chart of the asset, the price is moving in a downward channel, and after reaching the resistance line, a reversal begins to form. The technical indicators maintain a weakening buy signal.

Resistance levels: 0.6765, 0.6970 | Support levels: 0.6600, 0.6410

Trust Score 4.9

NZDUSD Breaks the Support

The NZDUSD pair faced negative pressure to break 0.6240 and settles below it, which pushes the price to achieve more expected decline in the upcoming sessions, targeting visiting 0.6100 areas mainly.

Therefore, the bearish bias will be suggested for today, noting that breaching 0.6240 and holding above it again will reactivate the positive scenario that its first target located at 0.6315.

The expected trading range for today is between 0.6150 support and 0.6260 resistance, and the expected trend for today is Bearish.

USDCAD - the pair is preparing for the strengthening of the downward dynamics

According to the latest survey, the situation of small and medium-sized enterprises in the third quarter improved markedly: 23.5% of enterprises expect difficulties in acquiring resources, and not 26.8%, as it was before, against the backdrop of a decline in inflation to 6.9% from a peak of 8.1%, only 32.4% of organizations expect a new price increase, which is lower than 34.0% in the previous period; and 34.4% predict a decline in profitability, up from the previous 35.9%. Overall, 29.8% of businesses said they still have problems maintaining inventory levels or purchasing, which is lower than the previous estimate but still quite a lot.

On the daily chart, the asset again approached the Neckline of the previously implemented Head and shoulders pattern to test it. The EMA fluctuation range on the Alligator indicator remains downwards, increasing the likelihood of the trend continuing, and the AO oscillator histogram forms bars in the sell zone.

Resistance levels: 1.35, 1.363 | Support levels: 1.3335, 1.3223

Trust Score 4.9

ASX 200 - Australian stock market continues its uptrend

Thus, the largest Australian financial conglomerate Commonwealth Bank of Australia today will present financial results for the third quarter, from which analysts expect a significant increase in revenue in the area of 12.02 billion Australian dollars, and the diversified company Wesfarmers Ltd., according to preliminary estimates, will record revenue at the level of 6.97 billion Australian dollars, up from 7.05 billion Australian dollars a quarter earlier. Earnings per share are projected in the region of 1.0 dollar, in line with the previous quarter.

On the daily chart of the asset, the price is trading within the global side channel, having reached the resistance line the day before, and the technical indicators keep a stable buy signal.

Support levels: 7170, 7000 | Resistance levels: 7280, 7440

Trust Score 4.9

BTCUSD - decline may continue

Like the rest of the cryptocurrency market, the BTC coin is experiencing the consequences of the bankruptcy of the FTX exchange, which risks causing a “domino effect” and leading to significant losses for other large companies in the digital sector. Currently, a direct consequence of this event is the loss of funds by millions of creditors and the financial problems of more than a dozen cryptocurrency platforms, including Galaxy Digital, Sequoia Capital, BlockFi, Crypto .com, and others. Investors are most wary of the current situation with a subsidiary of the Digital Currency Group: Genesis Global Capital offered investors to issue loans in cryptocurrencies at a high interest rate. This service was also used by the FTX exchange, secured by its own FTT token, and after its closure, the Digital Currency Group experienced a liquidity deficit of 1.0B dollars, which has not yet been closed. According to experts, the bankruptcy of the Digital Currency Group could have even more significant consequences for the cryptocurrency industry than the fall of FTX, as many digital enterprises will be deprived of the opportunity to raise additional capital. Community members understand this danger and are creating a fund under the auspices of the Binance exchange to support companies affected by the crisis. The total amount of funds allocated for this may reach several billion dollars, but whether they will help stabilize the market is still unknown.

Resistance levels: 17500, 19100, 20000 | Support levels: 15700, 15000, 13750

Trust Score 4.9

GBPJPY tends to postpone the rise

The GBPJPY pair surrendered to stochastic negativity by forming new negative wave and press on the additional support 166.80 after failing to surpass 168.20 barrier. We will start suggesting the correctional bearish attempts that might target 165.90 followed by reaching the moving average 55 at 164.50, while surpassing the mentioned barrier will cancel the negative overview and allows us to wait to record many gains by moving towards 169.40 and 170.20.

The expected trading range for today is between 167.35 and 165.9, and the expected trend for today is Bearish.

Trust Score 4.9

USDCHF Technical Analysis

The USDCHF pair fluctuates with calm positivity to approach 0.9500 barrier, noticing that the EMA50 forms continuous negative pressure against the price, to support he continuation of the expected bearish trend for the upcoming period, which its next targets located at 0.9355 followed by 0.93. Therefore, we will continue to suggest the bearish trend on the intraday basis unless breaching 0.9540 and holding with a daily close above it.

The expected trading range for today is between 0.9390 support and 0.9520 resistance, and the expected trend for today is Bearish.