AUDUSD - Australian labor market continues to recover
The overall unemployment rate in Australia remained at 3.4%, while employment increased by 64.0K jobs after rising by 43.1K a month earlier, and total employment reached 13.752M people. Seasonally adjusted, the share of the economically active population increased to 66.8% from 66.5% a month earlier, and the ratio of employed to the country’s total population increased to 64.5%. The unemployed increased by only 200 people, while the youth unemployment rate fell to 7.7%.
On the daily chart of the asset, the trading instrument is moving in an ascending channel and, after reaching the resistance line, is preparing to break it. Technical indicators maintain a strengthening buy signal.
Resistance levels: 0.6895, 0.7068 | Support levels: 0.6745, 0.6586
USDCAD - Growth within the local ascending corridor
The quotations were practically not affected by the report of Statistics Canada: in October, the volume of production grew by 2.8% to 72.6B Canadian dollars, and the oil industry (12.7%) and the food industry (2.9%) stand out among the leaders of the sector and the chemical industry (4.9%), while in the automotive industry (–3.2%) and mechanical engineering (–1.7%), a negative trend is observed. According to experts, growth in these sectors should not be expected soon, as there is a serious shortage of materials and microchips, which also reduced production and decreased exports of cars and spare parts by 1.8%.
On the daily chart of the asset, the trading instrument moves within the local ascending corridor. Technical indicators signal further growth.
Resistance levels: 1.37, 1.39 | Support levels: 1.354, 1.338
FTSE 100 - British stock market continues its downward correction
At the moment, the situation in the economy comes to the fore, as well as the actions of the Bank of England, which yesterday once again raised the interest rate by 50 basis points, bringing it to 3.50%. Each increase in value entails an increase in the cost of loans, which most companies in the technology sector cannot do without. The decision of the regulator this time was not unanimous: 2 out of 9 members of the board were in favor of maintaining the indicator at the current level. If the number of opponents of the interest rate increase grows, the Bank of England may revise its monetary policy.
On the daily chart of the asset, the index quotes are completing corrective growth as part of the next wave of the Expanding Formation global pattern and are reversing downwards. Technical indicators remain in the state of purchase signal that is starting to weaken.
Support levels: 7400, 7270 | Resistance levels: 7500, 7630
ETHUSD - Technical Analysis
Since the end of last month, the quotes have been moving in the main sideways range of 1325 – 1090. The cryptocurrency market is uncertain, as fears of further negative consequences of the bankruptcy of the FTX exchange are holding back the start of corrective growth. However, in the short term, it will become possible if the consolidation above 1250 (Murrey level [2/8], the middle line of Bollinger bands) to the levels 1325 or 1500 (Murrey level [4/8], the upper limit of the long-term downward channel). The key “bearish” level is 1090, consolidation below, which will give the prospect of further decline to 1000 (Murrey level [0/8]), 875 (Murrey level [–1/8]).
Resistance levels: 1250, 1325, 1500 | Support levels: 1090, 1000, 875
EURUSD - Low gas price in the EU supports the euro
Thus, according to data from the TTF exchange, the price for gas contracts with delivery in February is now 1120.0 dollars per 1.0K cubic meters, which was last observed in June, when the Nord Stream gas pipeline maintained maximum pumping levels. The current low quotations provide an opportunity for countries in the region to conclude long-term deals for supplies in the spring, as the storage facilities are almost full now. Meanwhile, in November, the German producer price index lost 3.9%, which led to a slowdown in growth to 28.2% YoY from 34.5% earlier.
On the daily chart, the trading instrument continues its corrective growth and confidently holds in the local ascending corridor. Technical indicators point to continued growth.
Resistance levels: 1.0675, 1.09 | Support levels: 1.0525, 1.032
USDJPY - Rhetoric of representatives of the Bank of Japan is a catalyst for the growth of the yen
Quotes of USD/JPY are correcting at 132.21. The yen added 4.2% in yesterday’s trading, reacting to the results of the Bank of Japan meeting, at which the interest rate was kept at the same level of -0.10%, but the policy of controlling the yield curve of 10-year government bonds was adjusted: previously it was allowed to deviate by 25 basis points either way from the target level of 0.00%, and now changes by 50 basis points become possible.
In addition, the regulator announced a significant increase in the volume of purchases of government bonds in unlimited volumes, expanding the range of purchased instruments: in addition to traditional 10-year bonds, the Bank of Japan now intends to buy assets with more global maturities. Governor Haruhiko Kuroda said he sees the move as an opportunity to stave off the negative effects on the economy from high inflation caused by higher import prices due to the depreciation of the yen. Thus, the Bank of Japan expects that after the appreciation of the national currency, the inflationary impact will begin to decrease.
On the daily chart of the asset, the USDJPY pair is trading in a local downtrend, reaching the support line near the low of August 2. Technical indicators still hold the sell signal, which has recently intensified.
Support levels: 131.5, 127.2 | Resistance levels: 133.5, 137
S&P 500 - Bond growth puts pressure on stock indexes again
The American stock market today does not demonstrate single dynamics and is again subject to fluctuations due to the news of the corporate segment. Thus, it became known that the US Securities and Exchange Commission (SEC) has charged the industrial group Honeywell International Inc. with participating in corruption schemes in Brazil and Algeria, which may force investors to reconsider their attitude to a rather promising company demonstrating stable revenue growth throughout the year. Shares of the entertainment company The Walt Disney Co. once again reached the minimum of the year against the background of news that the box office of the new film “Avatar: The Way of Water” did not meet expectations, making much less than preliminary forecasts.
On the daily chart, the index quotes continued the local corrective trend, confidently consolidating below the support line of the ascending channel. Technical indicators have already reversed and issued a sell signal.
Support levels: 3780, 3640 | Resistance levels: 3890, 4050
EURUSD breaches the minor resistance
The EURUSD pair begins today with new positivity to breach the resistance that appears on the chart and attempts to hold above it, reinforcing the expectations of continuing the bullish trend, opening the way to head towards our waited target at 1.0745. The EMA50 and stochastic provide positive signals that support the expected rise, which will remain valid conditioned by the price stability above 1.0580.
The expected trading range for today is between 1.0570 support and 1.0745 resistance.
Breaking: CAD Strengthens slightly after CPI data
- Canada’s annual inflation fell slightly to 6.8% YoY in November from 6.9% in October, above market expectations of 6.6%.
- Today’s report pointed to slowest pace of price growth since March. Consumer costs rose at a slower pace for transportation (8.5% vs 9.5% in October), largely due to a slower rise in gasoline prices (13.7% vs 17.8%) as the reopening of refineries in the western United States drove fuel prices in British Columbia and Alberta to ease. On a monthly basis, Canadian consumer prices rose by 0.1% in November, slowing from a 0.7% gain in the prior month.
Core consumer prices in Canada remain unchanged at 5.8 % in November.
Mortgage interest costs also moved higher, nevertheless markets perceived today’s report as hawkish which makes it more likely the BoC will raise rates next month. Current pricing is near 50/50.
USDCAD fell slightly after CPI release and is approaching 1.3600 support.
NZDUSD Faces Solid Support
The NZDUSD pair touched 0.6275 level and found solid support there, to show some bullish bias and retest the broken neckline of the head and shoulders’ pattern that appears on the chart, waiting to resume the negative trades to break the mentioned level and head towards 0.6130 as a next target. Therefore, the bearish trend scenario will remain valid for the upcoming period unless breaching 0.6385 and holding above it.
The expected trading range for today is between 0.6250 support and 0.6365 resistance
GBPUSD Technical Analysis
The GBPUSD pair tests 1.2135 level and still below it, and the contradiction between the technical indicators still valid, to continue with our neutrality until the price confirms its situation according to the mentioned level followed by detecting its next destination clearly.
The expected trading range for today is between 1.2050 support and 1.2230 resistance.
ADAUSD - Under pressure from general market negative factors
Last week, the US regulator confirmed the need to continue raising the interest rate and keep it at high levels until at least 2024: investors’ expectations for softening hawkish rhetoric did not materialize, and the dollar resumed strengthening against alternative assets. The consequences of the cessation of FTX are expressed, first of all, in the loss of confidence on the part of traders: by the middle of this month, 200.0K BTC worth about 3.4B dollars were withdrawn from the market, not counting other tokens, and soon this process is more likely everything will continue. Also, many cryptocurrency companies associated with the platform are experiencing problems: for example, market maker Auros announced restructuring its activities due to the company losing access to 20.0M dollars blocked on the bankrupt crypto exchange. According to Coinbase’s Cryptocurrency Market Outlook 2023 report, market conditions will continue to push investors to leave altcoins for safer currencies – BTC and ETH, and the price of ADA will remain under pressure in the medium term.
The trading instrument is moving within the long-term downward channel. Consolidation of the price below 0.2441 (Murrey levels [2/8]) will give the prospect of further decline to 0.2197 (Murrey levels [1/8]) and 0.1953 (Murrey levels [0/8]). The key “bullish” seems to be 0.2929 (Murrey levels [4/8], middle line of Bollinger bands). Its breakout will give the prospect of further growth to 0.3173 (Murrey levels [5/8]) and 0.3418 (Murrey levels [6/8], the upper limit of the downward channel).
Resistance levels: 0.2929, 0.3173, 0.3418 | Support levels: 0.2441, 0.2197, 0.1953
Crude Oil - Oil reserves in the USA have sharply decreased again
According to October statistics, the USA holds the lead with 11.971M barrels of oil, Saudi Arabia is in second place with 10.957M barrels, and Russia is in third place, which has significantly reduced production levels, which amounted to 10.66M barrels and is still higher than the 10.599M barrels recorded in August. During the period from January to October, energy production in the Russian Federation managed to increase by 2.4% from last year’s figure to 443.2M barrels.
At the same time, oil reserves in the US strategic reserve continue to decline rapidly: last week the indicator adjusted by -3.6M barrels, amounting to 378.6M barrels, which is the lowest value since 1983. In addition, the US Department of Energy announced that in order to replenish the volumes put on the market, the purchase of energy will begin, and the first batch of 3.0M barrels will be delivered in February 2023.
On the daily chart of the asset, the price is trading within a descending corridor, being in the middle of the range. Technical indicators hold the sell signal, which has weakened somewhat recently
Support levels: 81.20, 75.80 | Resistance levels: 84.6, 89.4
USDTRY - CBRT Leaves Rates Unchanged
Central Bank of the Republic of Turkey announced its final rate decision of 2022 today at 11:00 am GMT. Market expected the main one-week repo rate to be left unchanged at 9.00%. Those expectations were met with the Bank leaving interest rates unchanged. This comes after 4 straight rate cuts at previous meetings. CBRT sees current rate levels as adequate.
As such decision was expected, market reaction was minor. EURTRY moved lower in a knee-jerk move but has recovered initial losses and now trades a touch above pre-decision levels.
NI 225 - the stock market reacted sharply to the regulator’s decision
Despite statements by officials of the Bank of Japan that the expansion of the range of government securities for purchase by the regulator is not a signal for future tightening of monetary policy, many experts do not trust this too much, since a change of the department’s leadership is expected in April. So, one of the possible successors of Haruhiko Kuroda may be former Deputy Finance Minister Takatoshi Ito, who said that such actions look like a preparatory step for the future departure from the policy of negative rates, to which market participants immediately reacted, meanwhile the market closed with a serious drop in quotations. Japanese business exists largely due to the negative borrowing rate, and, with the change of the “pigeon” rate, most companies will have to significantly adjust their development strategy.
On the daily chart of the asset, the price remains within the global sideways corridor, heading towards the support line. Technical indicators have already reversed and issued a new sell signal.
Support levels: 26100, 25100 | Resistance levels: 26800, 27600
EURUSD
The EURUSD pair faced negative pressure yesterday to attack 1.0580 level but it keeps its stability above it, and begins today with new bullish bias motivated by stochastic positivity, waiting to head towards our main expected target at 1.0745. Therefore, the bullish trend scenario will remain active as long as 1.0580 level remains intact.
The expected trading range for today is between 1.0550 support and 1.0710 resistance.
AUDUSD - US economy grew by 3.2% in the third quarter
Yesterday, the Reserve Bank of Australia (RBA) published the minutes of a meeting on monetary policy, in which the head of the department, Philip Lowe, explained why the interest rate was raised not by 50.0 basis points but by 25.0 basis points. Officials looked at two priorities, cost control and household resilience, and concluded that despite high inflation, increasing the rate by 50.0 basis points was inappropriate as it would create additional credit pressure on households.
The key event last night was the data on US gross domestic product (GDP): Q3 figure rose by 3.2% after rising by 2.9% earlier. The upward trend was supported by a stable volume of business investment and an increase in consumer spending due to funds accumulated during the coronavirus epidemic. Against this background, the national currency regained some lost positions and consolidated above 104.000 in the USD Index. Also, statistics on initial jobless claims were released: the value, as predicted, was worse than the previous one, showing 216.0K claims against 214.0K a week earlier.
On the daily chart of the asset, the trading instrument is moving below the support line of the local rising channel. Technical indicators are ready to reverse and give a signal to start selling.
Resistance levels: 0.675, 0.688 | Support levels: 0.66, 0.643
Gold Breaks the Support
Gold price traded with strong negativity yesterday to break the bullish channel’s support line and head towards potential visit to 1776.25 level, making the bearish bias suggested for today, supported by moving below the EMA50. Therefore, we are waiting for more expected decline in the upcoming sessions, noting that breaching 1800 will stop the negative pressure and lead the price to recover again, taking into consideration that the markets might witness mixed trades due to the general weak volumes, caused by the holidays season.
The expected trading range for today is between 1775 support and 1810 resistance.
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DAX 40 - German stock market shows neutrality
The German stock market slowed down amid a positive report from the GfK Group, according to which German Consumer Sentiment continues to improve: the forecast for January 2023 suggests an increase in the index to -37.8 points from -40.1 points. Thus, the indicator shows growth for the third month in a row, which can serve as a positive signal and is a direct consequence of the effectiveness of the measures taken by the German government to support households in the face of high energy prices.
On the daily chart of the asset, the price is trading well above the descending channel resistance line, continuing to reverse to the downside. Technical indicators have already reversed and issued a new sell signal.
Support levels: 13800, 13400 | Resistance levels: 14100, 14600
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BTCUSD - drop in investment activity in the pre-New Year period
As most experts expected, the traditional pre-Christmas rally of the token did not happen, and investors reduced their activity amid the consequences of the bankruptcy of the FTX cryptocurrency exchange and negative signals from the American regulator, which will continue tightening monetary policy next year. The period of low holiday volatility is likely to continue soon.
Experts are trying to guess what awaits the first cryptocurrency and the market as a whole next year, and opinions on this matter differ: optimists believe that prices have already hit bottom and will soon begin to grow, while pessimists believe that quotes will linger at the current levels or may resume the decline. For example, analysts at JPMorgan Chase & Co. note that the bankruptcy of FTX made cryptocurrencies unattractive for a long time for most institutional investors. Also, the current market situation will push global regulators to introduce strict restrictive rules against the digital industry. The largest cryptocurrency platform Binance is under serious pressure from the authorities in the United States, where its activities are being investigated, and in other countries. For example, the exchange’s management is accused of illegal advertising in France. Likely, next year the pressure on sector participants will only increase, contributing to the weakening of the leading tokens. The most pessimistic experts expect the market recovery to begin by 2024, after the next BTC halving.
The trading instrument is around 16800, where it will remain soon due to the festive mood in the market. If the middle line of Bollinger bands is broken up around 17100, the growth will be able to resume to 17830 (Fibonacci correction 23.6%) and 18750.00 (Murrey level [7/8]). The key “bearish” level is 16250 (Murrey level [5/8], the lower line of Bollinger bands), a breakdown of which will give the prospect of further decline to 15700 (the area of November lows) and 15000 (Murrey level [4/8]).
Technical indicators do not give a single signal: Bollinger bands and Stochastic are horizontal, the MACD histogram is near the zero zone, and its volumes are insignificant.
Resistance levels: 17100, 17830, 18750 | Support levels: 16250, 15700, 15000