Price Cap Undecided, Oil Prices May Maintain a Sideways Trend

Summary:

The EU is aiming to cap the price of Russia's oil exports, which is set to take effect on Dec. 5th. However, the final details are still up in the air. And the market may extend sideways oscillation.

BUY WTI

Close Time

CLOSED

76.500

Entry Price

82.000

73.000

75.685 +0.589 +0.78%

150.3

Pips

Profit

73.000

78.003

Exit Price

76.500

Entry Price

82.000

Fundamentals

The European Union met on Wednesday to discuss the price cap on Russian oil exports. However, officials have failed to reach a consensus on proposing to set the cap at $65/barrel. Discussions have been postponed as no substantive progress has been made on Thursday.

EU officials submitted the latest discussion proposal on Tuesday (November 22) about Russian tankers transporting above-target crude and refined products. The purpose is to amend the policy to read: "It will be prohibited from obtaining EU shipping-related services for 90 days after unloading the cargo", compared with the previous project to "prohibit EU member states permanently from providing them with financial, insurance, brokerage, and other services". If the easing of sanctions allows Russian supplies to be maintained, the geo-premium will fall. On the contrary, if Russia cuts production actively, then the oil prices will rise again. It requires maintaining focus on the progress of the EU meeting and the Russian response subsequently.

The oscillation of the market has risen recently, and the fluctuation caused by the news headlines will be even greater, which currently shows that oil prices are highly sensitive to geopolitical news. At its October meeting, OPEC decided to hedge the decrease in demand with flexible production cuts, while Saudi Arabia also implied to maintain the production cuts until the end of 2023. Therefore, if the production cut policy remains unchanged, then OPEC still has the ability to support oil prices to some extent. It needs to pay close attention to the OPEC production meeting on December 4th.

In the grand scheme of the trend, the resonance of the downward trend has not been formed, and the short-term trend has not yet spotted the guidance as well. However, the downward range of the prices has been deeper at present and it is not suitable to overly chase the market, but wait for the rally after the market overfalls.

Technical Analysis

Trading at the 1-hour chart, oil prices are building a short-term double bottom, which is strongly supported around 76. The support level will perform resiliently in the short term unless the market suffers other shocks. Aggressive traders can take long positions on dips and trade in the rally.

Trading Recommendations

Trading Direction: Long

Entry Price: 76.500

Target Price: 82.000

Stop Loss: 73.000

Support: 76.200/72.800

Resistance: 82.200/83.300

Risk Warnings and Investment Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.

To Buy Low as a Slower U.S. Rate Hike Has Been Fully Digested

King Ten

Forex

Summary:

As the FOMC November meeting minutes are dovish, the dollar weakened. The USDJPY fell from near 142 to around 138 and then gained support. Perhaps this support is strong in the short term.

BUY USDJPY

Close Time

CLOSED

138.500

Entry Price

142.000

135.500

148.549 -0.081 -0.05%

300.0

Pips

Loss

135.500

135.495

Exit Price

138.500

Entry Price

142.000

Fundamentals

The FOMC November meeting minutes are relatively dovish, showing that the odds of a recession in the United States in the next year have risen to nearly 50%. A slower interest rate increase will be seen soon. This favors the dollar bears. The market again trades on a weaker dollar in the medium term.

The U.S. durable goods orders increased by 1% month-on-month in October, much higher than the expected 0.4% and last month's 0.3%, showing a very resilient U.S. economy. The market attention, however, is focused on the initial jobless claims which just rose slightly. The most concerned U.S. job market may have problems. Besides, the U.S. Markit manufacturing PMI in November is less than expected, which further increased the bearish sentiment of the dollar. The dollar index thus fell below 106 to around 105.6.

Although the FOMC November meeting minutes are dovish, a slower interest rate hike may have been largely digested. The USDJPY fell to around 138, near the low on November 15, which is also a support line for the market. The logic for longing and shorting is relatively clear. The price is likely to swing in the 138-142 range in the near term. So we can buy low and sell high in this range.

Technical Analysis

In the 1-hour chart, the USDJPY gained support after falling to lows since November. The bearish sentiment will ease in the near term. The price has risen above the 20-day moving average, so the short-term bullish signal is relatively strong.

USDJPY: To Buy Low as a Slower U.S. Rate Hike Has Been Fully Digested _1

Trading Recommendations

Trading direction: Long

Entry price: 138.500

Target price: 142.000

Stop loss: 135.500

Support: 138.000, 135.500

Resistance: 142.200, 145.100

Risk Warnings and Investment Disclaimers

Follow the Fluctuating Trend for the Less Satisfying Retracement

Eva Chen

Forex

Summary:

The GBPUSD built on the positive trend of the previous day and gained some traction on Wednesday for the second day in a row. The GBPUSD, which held the buying tone until the New York session, is now near its weekly high, just below 1.2000.

BUY GBPUSD

Close Time

CLOSED

1.20691

Entry Price

1.22300

1.14900

1.26199 -0.00054 -0.04%

45.4

Pips

Profit

1.14900

1.21145

Exit Price

1.20691

Entry Price

1.22300

Fundamentals

Data released on Tuesday showed that the British government borrowed less than expected in October. However, the budget deficit is likely to increase in the coming months due to energy bill support measures and the economic slowdown. Samuel Tombs, chief British economist at Pantheon Macroeconomics, a consultancy, said: "The decline in GDP will start to slow the growth rate of tax revenues and put some upward pressure on welfare spending at the end of the financial year." According to reports from Reuters, the British economy has fallen into recession and will shrink by 1.4% in 2023, so the pressure from the fundamentals of the GBPUSD is bearish.

Nevertheless, the US Dollar Index (USDX) fell 0.64% during the day as U.S. Treasury Securities yields continued their inverted trend, fueling fears of a possible recession. Many factors keep USD bulls on the defensive, which in turn is seen as a tailwind for the GBPUSD.

Besides, the difference between the yields of U.S. 10-year bonds and 2-year bonds becomes negative, and the yields of U.S. Treasury Securities are inverted. This situation indicates that the economic recession may occur, and there are risks in further tightening monetary policy.

The market expects the U.S. federal benchmark interest rate to peak at 5% in mid-2023, and is beginning to digest any subsequent rate cuts. The USDX remained weak before the New York session as investors are waiting for the release of minutes of the Fed's policy meeting. The report could provide clues to the outlook for inflation and interest rates. The minutes of the Federal Reserve meeting will be released at 7:00 GMT this evening. Investors are looking for any sign of slowing interest rate hikes to provide more participation in trading.

GBPUSD: Follow the Fluctuating Trend for the Less Satisfying Retracement_1

Technical Analysis

The GBPUSD maintained a positive buying tone in the short term after soaring above the daily SMA and a long-term downtrend for the second time. Prices hit a two-and-a-half-month high of 1.1980 again. The technical indicators all point to a wider trading space above.

Specifically, the MACD diverges upward, and the fast and slow lines strengthen their positive momentum above the 0-axis, indicating that there is great room for further upward movement. The RSI turned upward into the bullish zone but was not yet close to the overbought level of 70.

The immediate resistance to the bull rally was last Tuesday's high of 1.2028, which has limited further price rises in recent trading days. Before the bulls test this level, they might still need to break through the small psychological resistance of 1.2000, but judging from the current positive trend of the GBPUSD, will breaking through this barrier come in handy or is it imperative? If this range is successfully breached, further resistance could be encountered near 1.2230 of the 200-day SMA

However, as the market is now focusing on the minutes of the Fed meeting, if the strong upward momentum loses its strength and the exchange rate goes down, the initial support will be the lifeline that bulls must defend, namely the threshold of 1.1760, as well as 1.1700. A drop below this level could push prices closer to 1.1640 of the 100-day SMA. Failure to hold above this level will turn the focus back down and attention will increasingly turn to the threshold of 1.1500.

Overall, the broader bearish outlook has recently turned into a positive outlook in the short term, which could be supported by the market if it breaks the 200-day SMA. It is recommended to go long at the lows.

Trading Recommendations

Trading direction: Long

Entry price: 1.1980

Target price: 1.2230

Stop loss: 1.1490

Deadline: 2022-12-07 23:55:00

Support: 1.1883, 1.1760, 1.1700

Resistance: 1.2000, 1.2130, 1.2230

Risk Warnings and Investment Disclaimers

Go Short at Any High in Face of the Bull-baiting Rebound and Downward Death Cross in 4H Timeframe

Eva Chen

Forex

Summary:

The USDJPY failed to sustain Monday's continuous rally and fell below 141.00 in the Europe session on Wednesday. It is now showing a moderate rebound. However, in the general selling trend around USD, the spot price is difficult to take advantage of this trend and encountered new supply pressure near 141.50.

SELL USDJPY

Close Time

CLOSED

141.000

Entry Price

137.660

143.200

148.549 -0.081 -0.05%

120.7

Pips

Profit

137.660

139.793

Exit Price

141.000

Entry Price

143.200

Fundamentals

On Friday, Japan's core CPI recorded an annual rate of 3.6% in October, the highest since February 1982. The result puts the Bank of Japan (BoJ) in an even more awkward position as it tries to explain the need to stick to monetary easing in pursuit of stable price growth. The price increase has exceeded the BoJ's 2% target for seven months in a row, but the result is unlikely to convince BoJ governor Kuroda to change policy.

The acceleration in inflation is at least partly due to the sharp depreciation of the JPY. The widening trade deficit in October also reflected the negative impact of a weaker JPY, while the troubled JPY and surging import spending also pushed Japan's overall Q3 performance into another reversal.

Meanwhile, the Fed is still far from suspending its rate-raising cycle and is expected to continue raising borrowing costs to curb inflation. This should limit the downside of U.S. Treasury Securities yields and provide some support for the USD, pushing down the JPY.

With regard to the USDJPY, our view yesterday was that the overbought USDJPY will pull back to test 140.70 in the early demand zone. However, the USDJPY did not test that level after falling to a low of 141.13 in the late New York session. This means that the strong support of 140.30 is unlikely to be threatened. At present, the main focus is on the resistance of 141.50, followed by 141.80.

In the next 1 to 2 weeks, following the strong rise in the USD on Monday, the subsequent rise might soon take shape. Nevertheless, we believe that the USDJPY must break through and stay above 142.50 to further rise. However, the USDJPY today fell back to a low of 140.90, further deepening its complicated structure. As long as it does not break through the strong support of 140.30, our view will remain the same. Looking ahead, if the USD falls below 140.30, it indicates that the USD will enter the consolidation phase.

Today's New York session will still focus on the minutes of the November FOMC meeting to be released later in the New York session. Investors will be looking for clues to future interest rate hikes, which will affect recent USD price movements.

USDJPY: Go Short at Any High in Face of the Bull-baiting Rebound and Downward Death Cross in 4H Timeframe_1

Technical Analysis

The USDJPY has been on a long-term upward trend for nearly two years, reaching a 32-year high of 151.94 in October. After the intervention of the BoJ, the USDJPY fell sharply from its multi-year high and has been trying to rebound in recent trading days.

Judging from the current structural adjustment, the bearish momentum is still under control. Specifically, the RSI hovers below the neutral threshold of 50, while the stochastics are forming a bearish cross near the overbought zone, and a downward death cross is formed in the 4H timeframe.

If bears push prices lower, initial support could be tested at a recent low of 137.66. If that level collapses, bears could aim for a low of 135.57. This level was both resistance and support in the previous few months. If bears fail to stop there, the August low of 130.40 could provide further downside protection.

On the bright side, the bullish momentum could face resistance in the near term at 142.50. Beyond this range, bulls could further test the resistance at 145.10 of the 50-day SMA.

Overall, the USDJPY's recent rebound seems to be losing momentum. Therefore, a break below 140.30 could lead to a short-term downward trend at 137.66. It is recommended to go short at the highs.

Trading Recommendations

Trading direction: Short

Entry price: 141.31

Target price: 137.66

Stop loss: 143.20

Deadline: 2022-12-07 23:55:00

Support: 140.70, 140.30, 139.68

Resistance: 141.50, 142.03, 142.26

Risk Warnings and Investment Disclaimers

Gold Holds Below 1730, Will Start a New Downtrend

Jason

Summary:

SELL XAUUSD

Close Time

CLOSED

1746.52

Entry Price

1730.00

1756.79

2015.00 +0.97 +0.04%

89.6

Pips

Loss

1730.00

1755.48

Exit Price

1746.52

Entry Price

1756.79

Fundamentals

Gold oscillated yesterday and closed slightly up 0.1%. This was mainly because the US 2-year and 10-year Treasury bonds have inverted to the greatest extent in 40 years, and the inverted curve has long been seen as a sign of an economic recession. The duration and the extent of this inversion are so profound that the market is deeply concerned. The market is also betting that the recession will force the Fed to cut interest rates earlier than expected, and the dollar will fail to continue the trend of the previous few trading days and close on the decline.

Gold's sharp rally since Nov. 4 has benefited from two factors, one being influenced by short covering trades and the other by the market's overheated expectations of a slowdown of interest rate hikes by the Fed. But both factors are now absent. The reason for the former is that the latest CFTC data from the last reporting week showed the market shifting to the net speculative long position; while the latter is that overheated market expectations were dampened by Fed officials' speeches for several successive trading days. This means that this deep retracement in gold is likely to continue.

The minutes of the Fed's November meeting will be released during the day. From the previous attitude of the Fed officials suppressing market expectations, the minutes may not be as dovish as the market expected. Although the Fed is still heading toward a hawkish slowdown, it is not a "hawkish top". The Fed is likely to raise its estimate of the terminal rate in December at the earliest, partly because high inflation is likely to persist. And this is also in line with the Fed's "slower, higher, longer" policy path. However, this is clearly in conflict with the market's expectations of an accelerating recession in the US economy forcing the Fed to immediately slow down rate hikes, suspend rate hikes or even cut rates on aggressive expectations. In other words, the dollar may therefore rise and put gold under pressure.

Technical Analysis

In the 4H chart, the gold oscillates in a narrow range of 1749.52 - 1732.5 in the short term. In the vicinity of 1730, there are both the W bottom neckline and the top of the historical trend 1617.123 - 1730 oscillation range, and the 50.0% Fibonacci Retracement, which is the key support, a break below this line means that gold will open a new round of downtrend. The key resistance above is the 61.8% Fibonacci Retracement (1774.80). As for the indicators, Stoch and Ichimoku both show that gold will rise in the short term; +DI in DMI shows signs of going up through -DI, indicating that there is an accumulation of downside risk in gold in the short term. Overall, it is recommended to continue shorting after the gold rises.

XAUUSD: Gold Holds Below 1730, Will Start a New Downtrend_1

Trading Recommendations

Trading direction: Short

Entry price: 1746.52

Target price: 1730.0

Stop loss: 1756.79

Support: 1737.19/1730.0/1723.85

Resistance: 1749.52/1768.74/1784.33

Risk Warnings and Investment Disclaimers

Might Re-test 0.6540 as the Retracement Continues

Winkelmann

Forex

Summary:

Thanks to the weakness of the USD, the AUD has rebounded strongly in the near term. It turned upward in the middle term, but the rebound is suppressed in the short term, and there is the possibility of repeated adjustments.

SELL AUDUSD

Close Time

CLOSED

0.66404

Entry Price

0.65500

0.67500

0.66138 +0.00066 +0.09%

109.6

Pips

Loss

0.65500

0.67500

Exit Price

0.66404

Entry Price

0.67500

Fundamentals

Recently, expectations that the Federal Reserve will slow down the pace of interest rate hikes have been rising. An increasing number of investors are beginning to believe that the USD has peaked and market risk appetite has rebounded, providing non-US currencies with an opportunity to rise in the medium to long term.

However, Fed officials seem to be deliberately suppressing the market's enthusiasm, frequently making hawkish remarks and reiterating their determination to fight inflation again, to prevent the market from forming "loose expectations" prematurely. The Fed's interest rate hike is not over yet, and the rise in terminal interest rates is still supporting the USD. Even if the USD has turned downward, it is not yet ready for a sustained sharp drop. Moreover, the Reserve Bank of Australia (RBA), as the leading central bank to slow down the rate increase in the current interest rate increase cycle, is significantly different from the aggressive rate increase pace of central banks such as the Federal Reserve, which could limit the upward movement of AUDUSD.

In addition, concerns about the sharp increase in the COVID-19 outbreak in China and the potential economic headwinds that may result from the implementation of the new lockdown measures have dampened market optimism. Given high inflation and the prospect of continued interest rate hikes by the global central banks, the risk of a global economic downturn has intensified and commodity currency, the AUD, has also continued to be under pressure.

Technical Analysis

AUDUSD: Might Re-test 0.6540 as the Retracement Continues_1

In the 1D timeframe, the bottom of AUDUSD shows a double dip with a bullish trend, but it needs to be fully adjusted in the short term before it can rise further.

AUDUSD: Might Re-test 0.6540 as the Retracement Continues_2

In the 4H timeframe, the AUDUSD is making a technical adjustment. Next, it will step back to confirm the support of 0.6540 near the neckline. It is restricted by the resistance of 0.6675 in the short term, so there is room for further adjustment.

It is recommended to go short at the highs, namely, try to go short with small positions when the price rebounds to near 0.6675 while setting the target near the support of 0.6540 below and stop loss above 0.6730.

Trading Recommendations

Trading direction: Short

Entry price: 0.6650

Target price: 0.6550

Stop loss: 0.6750

Support: 0.6600/0.6540

Resistance: 0.6800/0.6675

Risk Warnings and Investment Disclaimers

RMB Has Not Appreciated, and Keep Buying the Dip

King Ten

Forex

Summary:

The domestic pandemic has deteriorated in stages, and pessimism about economic fundamentals has re-emerged. Coupled with the hawkish statements of Fed officials, the depreciation trend of the RMB in the short term can hardly change.

BUY USDCNH

Close Time

CLOSED

7.14000

Entry Price

7.32000

7.01000

7.16077 +0.00359 +0.05%

1300.0

Pips

Loss

7.01000

7.00947

Exit Price

7.14000

Entry Price

7.32000

Fundamentals

Published data from China's National Bureau of Statistics: China's value-added industrial output expanded by 5% year-on-year in October, in line with expectations, and the previous is up 6.3%. Retail sales of consumer goods fell 0.5% year-on-year in October, beyond the expected 1.7% and up 2.5% in September. From January to October, fixed asset investment rose 5.8% from a year ago, slightly below the expected and the previous value of 5.9%. Meanwhile, the national real estate development investment fell by 8.8% year-on-year from January to October, of which the residential investment fell by 8.3%.

U.S. retail sales rose 1.3% month-on-month in October, the highest level since February, beating market expectations of 1% versus 0% in September. And the Core retail sales, excluding automobiles and gasoline, rose 0.9% month-on-month, the highest since May, and above market expectations of 0.2% versus 0.3% in September.

Overall, China's GDP growth rate for the whole year maybe around 3.3%. Although real estate policies are frequently released at present, the long-tail effect of the sequelae of COVID-19 continues, and it will take a while for the confidence to recover.

However, the pandemic now has experienced a phase of deterioration, which is another blow to the economy, and the Politburo meeting in the early next year may trigger the onset of the fundamental improvement. In addition, hawkish statements from Fed officials further confirmed that the pace of rate hikes can hardly slow down until the beginning of next year. In terms of RMB, there is still pressure to depreciate in the short term, but the process will be more tortuous, and there will be no unilateral appreciation and depreciation as fierce as last time. Therefore, oscillations in prices will be the norm we see next.

Technical Analysis

Trading at the monthly chart, November shows a Long Black Body, but the potential for depreciation has not yet been exhausted. And the depreciation still needs to build a top smoothly to resolve, which will take at least a quarter.

USDCNH: RMB Has Not Appreciated, and Keep Buying the Dip_1

Trading Recommendations

Trading Direction: Long

Entry Price: 7.1400

Target Price: 7.3200

Stop Loss: 7.0100

Support: 7.1010/7.0130

Resistance: 7.2620/7.3280

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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Price Cap Undecided, Oil Prices May Maintain a Sideways Trend

Fundamentals

Technical Analysis

Trading Recommendations

To Buy Low as a Slower U.S. Rate Hike Has Been Fully Digested

Fundamentals

Technical Analysis

Trading Recommendations

Follow the Fluctuating Trend for the Less Satisfying Retracement

Fundamentals

Technical Analysis

Trading Recommendations

Go Short at Any High in Face of the Bull-baiting Rebound and Downward Death Cross in 4H Timeframe

Fundamentals

Technical Analysis

Trading Recommendations

Gold Holds Below 1730, Will Start a New Downtrend

Fundamentals

Technical Analysis

Trading Recommendations

Might Re-test 0.6540 as the Retracement Continues

Fundamentals

Technical Analysis

Trading Recommendations

RMB Has Not Appreciated, and Keep Buying the Dip

Fundamentals

Technical Analysis

Trading Recommendations

Risk Disclosure