Pessimistic Expectations Improved, EUR Could Be Boosted in the Medium Term

Summary:

Although the industrial sentiment index is not improved, the eurozone economic sentiment, and consumer and service sector sentiment index were promoted in November. Marginally, the market's pessimistic expectations for the eurozone gradually improved, which may boost the EUR in the medium term.

BUY EURUSD

EXP

EXPIRED

1.02400

Entry Price

1.05000

1.00000

1.09606 +0.00121 +0.11%

Pips

EXPIRED

1.00000

1.06355

Exit Price

1.02400

Entry Price

1.05000

Fundamentals

Last night, Eurostat announced that the eurozone economic sentiment index ended the decline for months in November, and rebounded to 93.7, better than the market expectations of 93.2, while the previous value was 92.5. In addition, the industrial sentiment index fell to negative 2, worse than the market expectations of negative 0.5, and the previous value of negative 1.2. Moreover, the eurozone services sentiment index rose to 2.3 in November, better than the market expectations of 2, and the previous value was 1.8.

There are signs of stabilization in the eurozone economy. Regarding the November economic data, although the industrial index is still very weak, the economic sentiment and service sector sentiment index has rebounded and oscillated between 1.02 and 1.05 recently. Besides, the marginal shorting sentiment and the market's pessimistic expectations for the eurozone have been improved, indicating bullish opportunities for the EUR in the medium term. Also, the US will release numerous essential data today, and the Fed's hawkishness may drag down the EUR, which could be an opportunity to build long positions for further gains.

Technical Analysis

Referring to the daily chart, the 5-day moving average and the 10-day moving average are moving closely, suggesting a weaker bullish momentum. Additionally, MACD forms a death cross, which could result in short-term depreciation. However, the support is still valid near the 20-day moving average below, which was the low point in the previous sessions. Therefore, it is recommended to go long near the previous low or the 20-day moving average.

EURUSD: Pessimistic Expectations Improved, EUR Could Be Boosted in the Medium Term_1

Trading Recommendations

Trading direction: Long

Entry price: 1.02400

Target price: 1.05000

Stop loss: 1.00000

Support: 1.02800/1.00800

Resistance: 1.04800/1.06200

Risk Warnings and Investment Disclaimers

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Powell's Speech Could Extend Hawkish Tone, Gold Bulls Having Concerns

Winkelmann

Summary:

The gold price is hovering in oscillation in the short term. It is suggested to wait for Powell's speech to point out a new direction, and the hawkish tone of the speech expected by the market may make the gold bulls have concerns.

SELL XAUUSD

Close Time

CLOSED

1760.00

Entry Price

1735.00

1788.00

2016.11 +2.08 +0.10%

280.0

Pips

Loss

1735.00

1788.33

Exit Price

1760.00

Entry Price

1788.00

Fundamentals

The release of the weaker-than-expected U.S. inflation data in early November led the market to lower expectations for future Fed rate hikes, which was seen as a sign of hawkishness peaking. With U.S. Treasury yields and the dollar falling back, the gold price appears to be on the turnaround. Last week's Fed minutes confirmed expectations of a slower pace of future rate hikes. Besides, the repeated spread of the global pandemic, geopolitical situation, global recession fears and buying on the dips have provided good support for gold.

The minutes of the Fed meeting, however, also implied that interest rates would peak higher than previously expected. And Fed officials continued their hawkish remarks, repeatedly emphasizing their determination to fight inflation and reiterating that the Fed's efforts to raise interest rates are not over. The market expects Fed Chairman Jerome Powell to continue the hawkish tone of the interest rate resolution and recent Fed officials during the day's New York session, downplaying the importance of slowing the pace of interest rate hikes, paving the way for further rate hikes in December. He may even mention that the Fed will maintain a higher interest rate level for a longer period.

The CME FedWatch Tool shows that the probability that the market expects the Fed to raise rates by 50 basis points in December has dropped to 66%, while earlier this month the probability was once expected to reach more than 80%. The expectation of slowing down the pace of interest rate hikes has cooled, which may provide some support to the dollar in the short term, with gold prices facing the risk of further retracements.

Also, the Fed is still in the process of raising interest rates. Even though the dollar index's high has passed, the relative strength of the U.S. economy and the Fed's more assertive hawkishness may continue to support the dollar in the face of downgraded global growth; at least in the short term, there is little probability of a downward trend in the dollar, which could also weaken gold's rally space.

Technical Analysis

XAUUSD: Powell's Speech Could Extend Hawkish Tone, Gold Bulls Having Concerns_1

In the daily chart, XAUUSD is hovering in oscillation in the short term. The trading range is still maintained between 1730 and 1760, and the breakout of the range needs to be watched to determine the next direction.

XAUUSD: Powell's Speech Could Extend Hawkish Tone, Gold Bulls Having Concerns_2

In the 4H chart, XAUUSD maintains the range oscillation. The short-term rally in the dollar is still weighing on gold prices, but the trading is relatively calm. The market is still waiting for Powell's speech. As gold price is close to the top of the oscillation range in the short term, it is recommended to go short after the price surges higher.

It is recommended to go short at highs and go long at lows. Try to go short with small positions after the price rallies to near 1760, with the target located near the support level of 1730 and the stop loss located above 1786.

Trading Recommendations

Trading direction: Short

Entry price: 1760.0

Target price: 1735.0

Stop loss: 1788.0

Support: 1747/1730

Resistance: 1785/1860

Risk Warnings and Investment Disclaimers

Market Oscillation Is Expanded Due to the Upcoming Significant Meeting

King Ten

Summary:

The market may be difficult to see a one-sided trend before the significant meeting and it will be in a wide range of oscillation. To buy lows and sell highs is recommended.

BUY WTI

EXP

EXPIRED

78.000

Entry Price

83.000

73.000

75.125 +0.029 +0.03%

Pips

EXPIRED

73.000

81.272

Exit Price

78.000

Entry Price

83.000

Fundamentals

U.S. API crude oil inventories fell by 7.85 million barrels, compared with the expected decline of 2.487 million barrels and the previous drop of 4.819 million barrels.

International crude oil futures prices fluctuated on November 29th, mainly due to expectations that China will ease its strict COVID-19 pandemic controls, while concerns about OPEC+ keeping production unchanged at its upcoming meeting limited gains as well. Besides, five OPEC+ sources told Reuters that the group is likely to continue its current policy at Sunday's meeting, and two other sources said further production cuts could also be discussed, but not very likely.

Joint Prevention and Control Mechanism of the State Council of PRC issued a "plan to boost vaccination of elderly people against COVID-19", calling for accelerating the vaccination rate for people aged over 80 and continuing to increase the rate for people aged 60-79. It will remove a key obstacle to easing the "Zero Covid-19" policy, which could contribute significantly to the future demand growth in China.

Currently, there is no clear direction for the oil price movement, and both rising and falling are cautious, waiting for the conference at the weekend. If production cuts enlarge, it will be the main logic of short-term oil price trading. Also, the inflation in the eurozone declines, while the U.S. inflationary pressure could be eased in November, and the U.S. oil reserve is low now. Furthermore, the U.S. announced that it will buy back strategic reserve stocks at $68-72/barrel previously. All the above will also be short-term support for the oil market.

Technical Analysis

Regarding the daily chart, oil prices are building a short-term double bottom, with stronger support near 76. Now, this position has been confirmed stably in the near term and a rebound is coming.

WTI: Market Oscillation Is Expanded Due to the Upcoming Significant Meeting_1

Trading Recommendations

Trading direction: Long

Entry price: 78.000

Target price: 83.000

Stop loss: 73.000

Support: 76.200/72.800

Resistance: 82.200/83.300

Risk Warnings and Investment Disclaimers

Uptrend Remains Intact Despite Seeming Weakness of Bulls

Eva Chen

Summary:

Before this week's key data are released, the USD had entered a huge support zone. The market could face a big challenge this week as we emerge from the downturn in U.S. yields and begin to study how markets can begin to price the upcoming recession. In a pessimistic scenario, this could turn a bullish market of the USD into a bearish one.

BUY EURUSD

EXP

EXPIRED

1.02800

Entry Price

1.05500

1.01790

1.09606 +0.00121 +0.11%

Pips

EXPIRED

1.01790

1.06341

Exit Price

1.02800

Entry Price

1.05500

Fundamentals

The USD received a huge boost ahead of this week's key data. Is it time to shift the view on the USD's turnaround? To answer such a question, we must first review the minutes of the FOMC meeting released last week.

The minutes of the Federal Open Market Committee meeting last Wednesday confirmed the market's established expectation that the Federal Reserve would reduce the rate hike to 50 basis points in December, and then tighten the policy and keep it unchanged for most of next year. These signals suggest that the market is pricing for an impending recession unless inflationary pressures can somehow normalize in the event of a typical soft landing.

At present, the market is celebrating the decline in the yields of U.S. Treasury Securities, but at some point, the market will have to consider the impact of the economic recession on corporate profits, credit cycles, and asset prices. Fears of a recession intensified as yields fell, the most interesting challenge of the USD and its cross-asset correlation. Will the USD continue to fall as yields fall as the Fed eventually relaxes, or will weaker risk appetite and poorer liquidity, and fears that the Fed will prove too slow to switch to easing, lead to a more significant deleveraging across the market to keep the USD well supported? We believe that if we do see a new round of general risk aversion, the safe haven status of the USD will still exist.

Meanwhile, any indication that inflation has failed to maintain a steady downward path is unwelcome. This could be exacerbated by China's easing of its restrictions and its stimulus & push-up of commodity prices as Europe and the US fall into recession. In this case, the USD is more likely to be sensitive to risk sentiment, as it is hard to see a further drop in yields under such conditions.

In yesterday's trading, the EURUSD once again interacted with its 200-day SMA and broke the recent pivot high of around 1.0480, and an RSI above 50 could give buyers hope for further gains. If the FOMC meeting on December 14 can provide a test of the current market background, the EURUSD could hit new highs.

EURUSD: Uptrend Remains Intact Despite Seeming Weakness of Bulls_1

Technical Analysis

Following yesterday's rejection to break the psychological barrier of 1.0480, the EURUSD fell on Tuesday. Nevertheless, the uptrend remained intact before it fell below 1.0220.

The bulls are now making another attempt to break above the psychological barrier of 1.0480 and maintain a bullish bias above the 200-day SMA. However, the momentum indicators reflect some divergence in the buying interest. Specifically, the RSI peaked near its overbought level of 70 before hitting a new high, and the stochastics turned to the downside, while the MACD was slightly flat below its 0-axis, increasing the risk of a downside reversal.

Nevertheless, the potential downside correction will not deter bulls from buying in the short term, on the contrary, it will attract more bargain hunters (those who go long at the lows). Unless the price returns to its previous low of 1.0220 and is below the 20-day SMA, the 1.0194 level of 23.6% Fibonacci retracement of the 1.2348-0.9535 downtrend will become of immediate concern.

On the bright side, however, if bulls successfully break the threshold of 1.0400 again, the recovery is expected to accelerate above the long-term downtrend. As a result, another bulls' victory could boost buying interest until the threshold of 1.0400 is tested. Moving higher from here could increase bulls' confidence in the EURUSD's further bullish outlook.

Overall, in the short term, investors will continue to support the EURUSD as long as the bottom near 1.0220 remains valid, although bulls appear to be somewhat weak. It is recommended to go long at the lows with the reference to the former supports that are not broken.

Trading Recommendations

Trading direction: Long

Entry price: 1.0280

Target price: 1.0550

Stop loss: 1.0179

Deadline: 2022-12-13 23:55:00

Support: 1.0220, 1.0185

Resistance: 1.0400, 1.0480

Risk Warnings and Investment Disclaimers

Lows Climb Up as It Could Turn Neutral in Middle Term

Eva Chen

Summary:

London Metal Exchange (LME) nickel stocks were flat. The daily increase of nickel has expanded to 2.00%, and now it is reported at US$26,250.00 per ton.

BUY NICKEL

Close Time

CLOSED

26907.475

Entry Price

30270.000

25000.000

16634.525 +573.250 +3.56%

30645.0

Pips

Loss

25000.000

26601.025

Exit Price

26907.475

Entry Price

30270.000

Fundamentals

The price of ferronickel continued to rise this month. On the supply side, the output of ferronickel increased slightly as compared with last month, while the impact of Indonesia's return still exists. However, the price of nickel ore at the cost side remained high, which put pressure on the profits of the ferronickel plant. At present, the ferronickel factories' procurement of nickel ore remains deadlocked.

On the demand side, in the first half of October, the price of stainless steel continued to rise, and the price hikes drove large steel factories to step up their purchases. However, in the last ten days, the price of stainless steel has dropped. Small and medium-sized steel factories have turned to a wait-and-see attitude, and their purchases of ferronickel are relatively limited. On the whole, under the background of a slight drop in profit, the iron factories are actively supporting the price. Whether the price of nickel and iron can rise in the future depends on the purchase of steel factories.

Overall, under the policy of using liquidity instruments to stabilize economic growth in a timely manner, the market showed certain demand expectations. Therefore, we can see that although the pressure on the prevention and control of the COVID-19 pandemic in China is increasing recently, the price of most industrial products, including the price of nickel, has been strong and does not seem to highlight the impact of the COVID-19 pandemic.

Meanwhile, electrolytic nickel's inventory in China is still relatively low although it has been accumulated. In the futures market, we believe that there will be a gamble between expectation and reality, the difference is that this time the expectation turns strong while the reality turns weak. The strong expectation mainly comes from the alleviation of the impact brought by the COVID-19 pandemic in the next year to facilitate economic recovery, etc. It is expected that this gamble will continue in days to come.

NICKEL: Lows Climb Up as It Could Turn Neutral in Middle Term_1

Technical Analysis

LME nickel continued to show a higher trend within the 4H timeframe as its price appeared to have found sufficient buying in the middle of the channel that it is interested in. Meanwhile, Fibonacci Extensions showed that there was still room for further upward movement after the intraday price was significantly higher. The target range is US$27730. Stronger bullish momentum could push the nickel price to US$28,640.

Currently, the price is also finding support at the 20-day SMA dynamic inflection point. Yesterday's break below the medium-term central average of US$25,000 and no further move lower suggests that the path of least short-term resistance is to the upside, or that the uptrend is more likely to gain sufficient momentum than to reverse. Meanwhile, stochastics appear to be rising, further confirming that the bulls are ready to return.However, given the complexity of the gamble between bulls and bears, (to be on the safe side) it is recommended to go short at the highs.

Trading Recommendations

Trading direction: Short

Entry price: 26760

Target price: 30270

Stop loss: 25000

Deadline: 2022-12-13 23:55:00

Risk Warnings and Investment Disclaimers

Topping Signs Are Emerging, and the Dawn of RMB Appreciation Has Been Visualized

Winkelmann

Forex

Summary:

With the US dollar weakening sharply, USDCNH may have peaked, maintaining a shock consolidation pattern in the short term. And the space left for the RMB to depreciate sharply has shrunk.

SELL USDCNH

EXP

EXPIRED

7.22000

Entry Price

7.02000

7.38000

7.16126 +0.00408 +0.05%

Pips

EXPIRED

7.02000

6.97899

Exit Price

7.22000

Entry Price

7.38000

Fundamentals

Since the beginning of this year, under the situation of continuous tightening by the Federal Reserve, China's monetary policy has tended to be loose in order to stabilize economic growth, and the degree of inversion of Sino-US interest rate differentials is still expanding. At the same time, the frequent outbreak of pandemics in China has impacted economic recovery and export prospects, with the RMB depreciating sharply. Since entering November, the number of confirmed coronavirus cases in China is rising steadily, and the uncertainty of economic growth seems to have increased in the short term. Monetary policy is likely to remain broadly accommodative as it continues, and there is still pressure on the RMB to the downward slide.

However, amid slowing global economic growth, market speculation recently about the shift of the Fed's policy gradually fermented, the possibility of a slowdown in interest rate hikes in the future has surged significantly, and the dollar has shown signs of peaking and pulling back. While in the process of adjusting the RMB exchange rate, the People's Bank of China has issued a series of foreign exchange policies to regulate ratios including the foreign exchange deposit reserve ratio and foreign exchange risk reserve ratio, etc. The recent introduction of the “20 Measures to Upgrading Disease Control Measures” in China and the financial support measures for real estate will be conducive to the promotion of the stable recovery and development of China's economy. Therefore, under the premise that export trade remains active, the space for the RMB to depreciate may be limited.

Technical Analysis

Trading at the monthly chart, since 2008, USDCNH has generally maintained a wide oscillation pattern between 6.0-7.3, and the broadening formation has a tendency to expand, which is currently falling again near the top of the channel. Besides, the monthly line will most likely close down near the end of the month, for the first time after eight consecutive white bodies. The indicator RSI also turned downwards from the overbought zone. Therefore, the pause of the rally has not yet been excluded.

USDCNH: Topping Signs Are Emerging, and the Dawn of RMB Appreciation Has Been Visualized_1

Looking at the daily chart, USDCNH has now entered the topping stage, and the high level forms a "head and shoulders" pattern, which enhances the signal of the trend turning short. It is advisable to consider shorting on the high. If the rebound retreats to test the neckline around 7.25 without breaking, it is expected to drop again to the 7.00 mark.

It is recommended to try to go short on the price rally around 7.22, with the target set near the 7.00 mark below and the stop loss above 7.37.

USDCNH: Topping Signs Are Emerging, and the Dawn of RMB Appreciation Has Been Visualized_2

Trading Recommendations

Trading Direction: Short

Entry Price: 7.22

Target Price: 7.02

Stop Loss: 7.38

Support: 7.00/7.12

Resistance: 7.28/7.37

Risk Warnings and Investment Disclaimers

Rally Encountering Resistance, Mainly to Short at Highs

Winkelmann

Forex

Summary:

The dollar has weakened, boosting the non-US currency, the Canadian dollar. As the rebound is stalled, it is recommended to maintain short trades.

SELL USDCAD

Close Time

CLOSED

1.34650

Entry Price

1.32400

1.37150

1.35970 -0.00162 -0.11%

42.1

Pips

Profit

1.32400

1.34229

Exit Price

1.34650

Entry Price

1.37150

Fundamentals

Since the beginning of this year, the risk of a global recession has been rising amid widespread interest rate hikes by central banks. However, fears of a global recession prospect have been heightened by the recent severe pandemic situation in major Asian countries and their possible resumption of lockdown measures. Meanwhile, commodity currencies underperformed, and the hawkish stance from Fed officials continued to support the dollar, with USDCAD extending its rally.

However, previous lower-than-expected US inflation data raised hopes that the Fed would slow the pace of tightening. And traders seem reluctant to notice the risk of further increases in policy rates. The dollar has been weakening. Although there have been occasional rebounds, the strength is not strong enough. The signs of a shift in market trading are becoming more pronounced, which is undoubtedly a boon for non-US currencies that have been in the doldrums for a whole year.

In addition, rumors that OPEC+ will again present the idea of cutting production this Sunday offset demand concerns arising from the pandemic and recession. Therefore, international oil prices have been boosted again, further positive to the Canadian dollar, and USDCAD may come under pressure to the downside.

Technical Analysis

Trading at the daily chart, USDCAD has consolidated at a high level for nearly two months and formed a "head and shoulders" top reversal trend pattern. After breaking support around the neckline at 1.3530, the peak signal strengthens further. The exchange rate has extended its volatile rebound and has encountered resistance at present. It has completed the retest of the neckline, which has regained the potential to fall deeper. It means that the return of the USDCAD downtrend does not be ruled out.

USDCAD: Rally Encountering Resistance, Mainly to Short at Highs_2

Looking at the 4-hour chart, the rally of USDCAD has slowed down in the short term, under pressure at the line of 1.3500, weakening to the downside.

It is recommended to go short at highs and try to take a short sale when the price rebounds to around 1.3470. The target is around the key support below at 1.3240 and the stop loss is around 1.3680.

Trading Recommendations

Trading Direction: Short

Entry Price: 1.3465

Target Price: 1.3240

Stop Loss: 1.3715

Support: 1.3250/1.3400

Resistance: 1.3850/1.3680

Risk Warnings and Investment Disclaimers

King Ten

Analyst

Focus on macroeconomic analysis with extra attention to the geopolitical impact on financial markets.

Ranking

Articles

316

Win Rate

0.00%

P/L Ratio

0.34

Focus on

XAUUSD, WTI, COPPER

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Pessimistic Expectations Improved, EUR Could Be Boosted in the Medium Term

Fundamentals

Technical Analysis

Trading Recommendations

Powell's Speech Could Extend Hawkish Tone, Gold Bulls Having Concerns

Fundamentals

Technical Analysis

Trading Recommendations

Market Oscillation Is Expanded Due to the Upcoming Significant Meeting

Fundamentals

Technical Analysis

Trading Recommendations

Uptrend Remains Intact Despite Seeming Weakness of Bulls

Fundamentals

Technical Analysis

Trading Recommendations

Lows Climb Up as It Could Turn Neutral in Middle Term

Fundamentals

Technical Analysis

Trading Recommendations

Topping Signs Are Emerging, and the Dawn of RMB Appreciation Has Been Visualized

Fundamentals

Technical Analysis

Trading Recommendations

Rally Encountering Resistance, Mainly to Short at Highs

Fundamentals

Technical Analysis

Trading Recommendations

Risk Disclosure