Technical Outlook and Review

IC Markets

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Summary:

The chart for DXY (US Dollar Index) displays a bullish overall momentum.

DXY

The chart for DXY (US Dollar Index) displays a bullish overall momentum. Potential price action suggests a bullish bounce off the 1st support.

The 1st support at 103.17 is identified as a pullback support. It's a significant level where buying interest may emerge, potentially propelling the DXY towards further gains.

The 2nd support at 102.46 is another support level, characterized as a swing low support, reinforcing its importance as a potential area of buying interest.

On the resistance side, the 1st resistance at 104.00 is categorized as a pullback resistance, serving as a significant barrier where selling interest could intensify, potentially slowing the DXY's upward movement.

The 2nd resistance at 104.80 is noted as another pullback resistance, further reinforcing potential resistance factors for the currency index.

EUR/USD

The EUR/USD chart exhibits a bullish overall momentum, indicating potential for a bullish continuation towards the 1st resistance.

The 1st support at 1.0882 is identified as an overlap support, a significant level where buying interest may emerge, providing essential backing for the currency pair.

The 2nd support at 1.08 is categorized as pullback support, reinforcing its importance as a potential area of buying interest.

On the resistance side, the 1st resistance at 1.1007 is a swing high resistance, serving as a substantial barrier where selling interest could intensify, potentially slowing EUR/USD's upward movement.

Additionally, there is an intermediate resistance at 1.0956, characterized as pullback resistance, further reinforcing potential resistance factors for the currency pair.

EUR/JPY

The analyzed instrument is EUR/JPY, and the overall momentum of the chart is currently bearish.

There is a potential for the price to make a bearish reaction off the 1st resistance and drop to the 1st support.

The 1st support level is identified at 160.64, and its favorable characteristic is attributed to being an overlap support.

The 2nd support level is situated at 159.96, and its favorable aspect is derived from being a pullback support.

On the resistance side, the 1st resistance is positioned at 161.51, and it is considered significant due to being an overlap resistance.

The 2nd resistance is located at 162.24, and its significance is derived from being an overlap resistance and aligning with the 50% Fibonacci Retracement.

EUR/GBP

The analyzed instrument is EUR/GBP, and the overall momentum of the chart is currently bullish.

There is a potential for the price to make a bullish continuation towards the 1st resistance.

The 1st support level is identified at 0.8617, and its favorable characteristics include being a multi-swing low support.

The 2nd support level is situated at 0.8598, and its favorable aspect is derived from being a swing low support.

On the resistance side, the 1st resistance is positioned at 0.8640, and it is considered significant due to being a pullback resistance and coinciding with the 23.60% Fibonacci Retracement.

The 2nd resistance is located at 0.8663, and its significance is derived from being an overlap resistance.

GBP/USD

The GBP/USD chart maintains a bullish overall momentum, suggesting potential for a bullish continuation towards the 1st resistance.

The 1st support at 1.2585 is identified as an overlap support, featuring a 23.60% Fibonacci retracement, signifying its significance as a level where buying interest may emerge and reinforce GBP/USD's upward movement.

The 2nd support at 1.2451 is another overlap support level, adding to its importance as a potential area for buyer activity.

On the resistance side, the 1st resistance at 1.2727 is characterized as an overlap resistance, representing a notable barrier where selling interest could intensify, potentially limiting the currency pair's upward ascent.

The 2nd resistance at 1.2794 is also noted as an overlap resistance, further strengthening the potential resistance factors for GBP/USD.

GBP/JPY

The overall momentum of GBP/JPY is bullish, suggesting a potential continuation of the upward movement in price. There is a possibility that the price could make a bullish bounce off the 1st support and head towards the 1st resistance.

1st support at 186.72: This level is identified as a pullback support, suggesting that it has previously acted as a significant price level where buyers have shown interest. It's a level to watch for potential bullish reactions or a temporary halt in the bearish momentum.

2nd support at 185.99: The 2nd support level is marked as multi-swing low support, indicating its importance as a potential area of buying interest. Additionally, this level aligns with the 61.8% Fibonacci Retracement, adding strength to the support level. Traders may anticipate potential support around this level.

1st resistance at 188.18: This level is characterised as pullback resistance, as it could indicate a potential pause or correction in the bullish trend.

USD/CHF

The USD/CHF chart exhibits a bearish overall momentum, indicating potential price action where it may initially rise towards the 1st resistance in the short term before reversing off it and moving downward towards the 1st support.

The 1st support at 0.8648 is identified as a pullback support, signifying its importance as a significant level where buying interest may emerge, potentially providing support for USD/CHF.

An intermediate support level at 0.8683, characterized as a swing low support, adds further significance, potentially reinforcing the support for the currency pair.

On the resistance side, the 1st resistance at 0.8758 is categorized as an overlap resistance, serving as a significant barrier where selling interest could intensify, potentially leading to a reversal in the USD/CHF movement.

Additionally, there is a 2nd resistance at 0.8797, noted as a pullback resistance, further strengthening potential resistance factors for the currency pair.

USD/JPY

The USD/JPY chart maintains a bearish overall momentum, suggesting potential for a bearish continuation towards the 1st support.

The 1st support at 146.90 is identified as a multi-swing low support, signifying its significance as a level where buying interest may emerge, potentially providing essential support for USD/JPY.

The 2nd support at 145.89 is characterized as a swing low support, adding to its importance as a potential area for buyer activity.

On the resistance side, the 1st resistance at 148.37 is categorized as a swing high resistance, featuring a 61.80% Fibonacci retracement, representing a notable barrier where selling interest could intensify, potentially limiting the currency pair's upward movement.

The 2nd resistance at 149.66 is also noted as a multi-swing high resistance, further strengthening potential resistance factors for USD/JPY

USD/CAD

The USD/CAD chart currently displays a bullish overall momentum, indicating potential price action where it may experience a bullish bounce off the 1st support and move towards the 1st resistance.

The 1st support at 1.3527 is identified as a pullback support, signifying its importance as a significant level where buying interest may emerge, potentially providing essential support for USD/CAD.

The 2nd support at 1.3488 features a 161.80% Fibonacci extension, adding to its significance as a potential area for buyer activity, strengthening the support.

On the resistance side, the 1st resistance at 1.3607 is categorized as an overlap resistance, representing a notable barrier where selling interest could intensify, potentially hindering USD/CAD's upward movement.

Additionally, there is a 2nd resistance at 1.3663, noted as an overlap resistance, further reinforcing potential resistance factors for the currency pair.

AUD/USD

The AUD/USD chart currently presents a bearish overall momentum, suggesting potential price action where it may undergo a bearish break off the 1st support and move downward towards the 2nd support.

The 1st support at 0.6605 is identified as an overlap support, signifying its importance as a significant level where buying interest may emerge. However, the bearish momentum could potentially overpower this level.

The 2nd support at 0.6569 is characterized as an overlap support, reinforcing its significance as another potential area for buyer activity.

On the resistance side, the 1st resistance at 0.6675 is categorized as a swing high resistance, representing a notable barrier where selling interest could intensify, potentially preventing AUD/USD from making significant upward progress.

Additionally, there is a 2nd resistance at 0.6724, noted as an overlap resistance, further reinforcing potential resistance factors for the currency pair.

NZD/USD

The NZD/USD chart currently exhibits a neutral overall momentum, suggesting potential price action where it may fluctuate between the 1st resistance and the 1st support level.

The 1st support at 0.6130 is identified as an overlap support, signifying its importance as a significant level where buying interest may emerge, potentially providing essential backing for NZD/USD.

The 2nd support at 0.6064 is characterized as an overlap support, adding to its significance as a potential area for buyer activity.

On the resistance side, the 1st resistance at 0.6222 is categorized as a swing high resistance, featuring a 161.80% Fibonacci extension, representing a notable barrier where selling interest could intensify, potentially limiting the currency pair's upward movement.

Additionally, there is a 2nd resistance at 0.6274, noted as an overlap resistance, further reinforcing potential resistance factors for NZD/USD.

DJ30

The DJ30,the momentum of the chart is bullish, suggesting a potential continuation of the upward movement in price. There is a possibility that the price could experience a bullish bounce off the 1st support level and head towards the 1st resistance.

1st support at 35721.77: This level is identified as a multi-swing low support, indicating that it has previously acted as a significant price level where buyers have stepped in. It is a level to watch for potential bullish reactions or a temporary pause in the upward momentum.

2nd support at 35721.77: The 2nd support level is marked as a pullback support, suggesting that if the price experiences a pullback, it may find support at this level. Pullback supports are significant in maintaining the overall upward momentum.

1st resistance at 36218.05: This level is considered a pullback resistance, this level may pose a temporary challenge for the price movement. Traders should monitor how the price reacts around this level, as it could indicate a potential pause or correction in the bullish trend.

2nd resistance at 36540.10: This level is considered as swing high resistance, representing a historical point where the market previously faced selling pressure. Breaking through this resistance could signify a strong bullish move.

GER40

The GER40 overall momentum is bullish, suggesting a potential continuation of the upward movement in price.There is a possibility that the price could experience a bullish bounce off the 1st support and head towards the 1st resistance.

1st support at 16208.8: This level is identified as a pullback support, indicating that it has previously acted as a significant price level where buyers have shown interest.This level is expected to provide support during a potential pullback in the price.

2nd support at 15986.3: The 2nd support level is marked as a multi-swing low support, suggesting that it aligns with historical price data and is likely to be a strong support level. It may serve as a critical level for traders to watch for potential rebounds or consolidation.

1st resistance at 162425.8: This level is considered a pullback resistance, indicating that it could be a point where selling pressure may increase, potentially leading to a temporary halt or correction in the bearish trend.

2nd resistance at 16527.5: The 2nd resistance level is marked as a swing high resistance, suggesting it has previously acted as a barrier to upward price movements. It could serve as a strong resistance level if the price attempts to move higher.

US500

The overall momentum of US500 is bullish, suggesting a potential continuation of the upward movement in price.

1st support at 4538.1: This level is identified as a pullback support, indicating that it has previously acted as a significant price level where buyers have shown interest. It may serve as a potential area of support This level is expected to provide support during potential pullbacks in the price.

2nd support at 4491.0: The 2nd support level is marked as a multi-swing low support, suggesting that it aligns with historical price data and is likely to be a strong support level. It may be considered a critical level for traders to watch for potential rebounds or consolidation.

1st resistance at 4593.8: This level is considered a pullback resistance, indicating that it could be a point where selling pressure may increase, potentially leading to a temporary correction within the bearish trend.

BTC/USD

The analyzed instrument is BTC/USD, and the overall momentum of the chart is currently bullish.

There is a potential for the price to make a bullish continuation towards the 1st resistance.

The 1st support level is identified at 37594, and its favorable characteristic is attributed to being a swing low support.

The 2nd support level is situated at 36746, and its favorable aspect is derived from being a swing low support.

On the resistance side, the 1st resistance is positioned at 38313, and it is considered significant due to being a multi-swing high resistance.

The 2nd resistance is located at 39752, and its significance is derived from coinciding with the 61.80% Fibonacci Expansion and the 100% Fibonacci Projection, indicating Fibonacci confluence.

ETH/USD

The analyzed instrument is ETH/USD, and the overall momentum of the chart is currently bullish.

There is a potential for the price to make a bullish continuation towards the 1st resistance.

The 1st support level is identified at 2026.77, and its favorable characteristic is attributed to being a multi-swing low support.

An intermediate support is also noted at 2091.75, and its significance is derived from being a pullback support.

On the resistance side, the 1st resistance is positioned at 2129.57, and it is considered significant due to being a multi-swing high resistance.

The 2nd resistance is located at 2162.84, and its significance is derived from being an overlap resistance.

WTI/USD

The WTI (West Texas Intermediate) chart currently displays a bearish overall momentum, indicating the potential for a bearish continuation towards the 1st support.

The 1st support at 74.32 is identified as a multi-swing low support, signifying its importance as a significant level where buying interest may emerge, potentially providing crucial support for WTI's price.

The 2nd support at 72.57 is characterized as an overlap support, reinforcing its significance as a potential area for buyer activity.

On the resistance side, the 1st resistance at 77.97 represents a multi-swing high resistance, serving as a notable barrier where selling interest could intensify, potentially hindering further upward movement in the price of WTI.

Additionally, there is a 2nd resistance at 79.94, noted as a pullback resistance, further reinforcing potential resistance factors for the commodity.

Furthermore, an intermediate support level at 75.56 is identified as an overlap support with a 61.80% Fibonacci retracement, adding to its significance as a potential support level. Technical Outlook and Review_17

XAU/USD (GOLD)

The XAU/USD (Gold) chart demonstrates a bullish overall momentum, suggesting potential for a bullish bounce off the 1st support and movement towards the 1st resistance.

The 1st support at 2035.79 is identified as an overlap support, signifying its importance as a significant level where buying interest may emerge, potentially providing essential backing for XAU/USD.

The 2nd support at 2020.50 is categorized as pullback support, reinforcing its significance as a potential area for buyer activity.

On the resistance side, the 1st resistance at 2050.63 is characterized as a swing high resistance, featuring a 61.80% Fibonacci projection, representing a notable barrier where selling interest could intensify, potentially slowing XAU/USD's upward movement.

The 2nd resistance at 2067.05 is also noted as a multi-swing high resistance, further reinforcing potential resistance factors for the precious metal. Technical Outlook and Review_18

Risk Warnings and Disclaimers

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

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Devin

Economic

It's been a strong end to the month for European markets which have seen their best gains this year, with the notable exception of the FTSE100 which has struggled to keep pace with its peers, due to the underperformance of its big caps of BP, Shell, and AstraZeneca.

Europe

On the other hand, the FTSE250 has put in its best month this year with strong gains for the likes of easyJet, Carnival and commercial real estate as interest rates have eased.

Today's gainers have been the likes of BP and Shell in the wake of this afternoon's agreement by OPEC+ to cut another 1m barrels a day off production output, starting next year.

Rolls-Royce is also having another strong session, and is one of the best performers this month, up over 25%, while house builders have also had a strong November with Barratt Developments and Taylor Wimpey leading the gains here.

It's been another bad day for bootmaker Dr Martens shares which have had a dreadful year, starting off badly in January after the company issued a profits warning, with the shares slowly drifting lower over the course of the rest of this year, and getting bookmarked today with another profits warning, falling to new record lows today.

In January the bootmaker blamed supply chain issues in its US operation which it said reduced wholesale revenues by £15m-£25m, and EBITDA by around £20m. Things haven't improved after today's H1 revenues fell short of forecasts of £414m, at £395.8m. Profits before tax also declined by 55% to £25.8m.

Once again, it's the company's US operation which is acting as the main drag led by weakness in its wholesale operation. Consequently, the shares have slipped to new record lows with little likelihood that the company will be able to get anywhere close to matching the £1bn record revenues it generated last year. With respect to profits guidance Dr Martens said it expects to see full year EBITDA to be moderately below the bottom end of consensus expectations.

US markets opened higher after core PCE inflation slowed to 3.5% in October, and weekly jobless claims came in at 218k, both coming in as expected.

We also got some M&A on the news that AbbVie has agreed to pay $10.1bn for ImmunoGen as it looks to expand its cancer drug Elahere.

US automaker Ford has reinstated its full year forecast in the wake of the settlement of its dispute with the autoworkers which the company said will add an extra $8.8bn to its costs, which it said is the equivalent of shaving $900 of profit off the price of a vehicle. The company said it expects annual EBIT of between $10-10.5bn. The strikes are also estimated to have knocked $1.7bn off the company's profits.

Salesforce shares have moved higher after reporting Q3 revenues of $8 72bn, an increase of 11% and profits of $2.25 a share. The company went on to upgrade its full year guidance for revenue to between $34.75bn and $34.8bn, and profits to between $8.18 and $8.19c a share, while nudging operating margins up to 30.5%.

Ohio based supermarket Kroger shares initially slipped lower after the company cut its annual sales forecast to between 0.6% to 1%, from 1% to 2%, although it raised the lower end of its profit forecast to $4.50 a share, from $4.45.

Snowflake shares pushed higher after the cloud software company reported Q3 revenue of $734.2m, comfortably beating forecasts of $714m, while profits came in at 25c a share. For Q4 the company raised its revenue forecast to between $716m and $721m, pushing annual product revenue expectations higher to $2.65bn.

After several days of declines the US dollar appears to be undergoing an end of month rebound, after sinking to 3-month lows earlier this week, and undergoing its worst monthly performance since November last year, while US bond markets have seen their biggest rally since the 1980's.

The pound on the other hand has seen its strongest monthly performance against the US dollar since November last year, and while sterling has slipped back today, that has been more of a function of US dollar strength than any underlying weakness. Today's Lloyds business barometer survey for November came in at its highest level this year and best level since February 2022.

The euro has also finished the month on the back foot after EU CPI slowed more than expected in November, sliding -0.7% month on month, and rising 2.4% year on year, down from 2.9% in October. Core prices also slowed sharply, coming in at 3.6%, reinforcing the sentiment the idea that recent weakness in the economic numbers across the bloc is dragging prices lower. The latest revision to French Q3 GDP to -0.1% would appear to support this, raising the prospect the French economy could well be in recession already.

Commodities

Crude oil prices have continued to rise, pushing up to two-week highs with the OPEC+ meeting reported to have agreed to an extra 1m barrels per day of output cuts, on top of the 1m barrels that the Saudis had already committed to previously during the summer. The additional cuts, starting next year, came against a backdrop of various members haggling over where those output cuts might fall, against a backdrop of concerns over slowing demand. Yesterday inventory levels rose for the second week in a row in a sign that consumers are cutting back, against a backdrop of nervousness over the health of the global economy, which also helps explain why on the month crude prices are lower.

The increasing prospect that rate cuts might come as soon as Q2 next year has prompted a sharp slide in yields this month along with a weaker US dollar which is helping to support gold prices. The downside risk for gold now is the idea that the declines being seen in the pace of inflation starts to slow, and rate cut bets get pared back as inflation becomes stickier.

Volatility

The New Zealand dollar found itself in focus on Wednesday, advancing to four-month highs in the wake of some hawkish tones from the country's central bank. The RBNZ hinted at the possibility of further monetary policy tightening in a bid to calm inflation, lifting the kiwi dollar-dollar contract briefly above the 0.62 level. One day vol stood at 16.13% against 10.85% for the month.

Palladium prices may have found some support mid-month from their longer-term trend lower, but that's now looking short lived. Some modest gains for the greenback against many currencies also served to exacerbate the downside, with the metal trending back towards the $1000 mark. One day vol printed 54.3% against 46.26% for the month.

Keeping with commodities and Soybean prices are seeing moderately elevated levels of price action with reports of a hot summer growing season in South America lending support as expectations of a poor harvest for the year grow. One day vol advanced to 22.6% against 19.94% for the month.

And CMC's proprietary basket of EU Automobile stocks saw interest yesterday, driven by the biggest constituent Stellantis. The company's CEO may have struck a cautionary note at a press conference yesterday, but investors appeared to find optimism in the news, driving the stock to a fresh closing high. One day vol on the EU Autos basket stood at 29.12% against 25.04% for the month.

To stay updated on all economic events of today, please check out our Economic calendar

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Kevin Du

Cryptocurrency

Bitcoin's price remains stagnant despite the Fed's slightly less hawkish tone. In contrast, Bitcoin has outperformed other assets, doubling in price from $16K to nearly $38K this year. Improved fundamentals, including the resolution of Binance concerns and FTX's token performance, boost sentiment. Traders are eagerly awaiting the approval of BlackRock's ETF, a potential catalyst for Bitcoin surpassing $50,000 by year-end. Technically, Bitcoin is in an upward channel, suggesting bullish momentum unless it violates this pattern.

BTCUSD – D1 Timeframe (BEFORE & NOW)

In my article dated 10th of October, I detailed my reasons for expecting a decline in BTC prices, followed by a surge from a technical point-of-view. The chart above shows the outcome of that analysis, which confirms to a large extent the degree of accuracy in such articles as this. So, follow me closely as I expound on my expectations for BTCUSD in the coming days.

BTCUSD – W1 Timeframe

Currently, on the 4-hour timeframe, BTCUSD is trading within a bullish channel, and seems poised to break out of the trendline resistance. This already signifies the likelihood of a bullish outcome. From a larger perspective, we also see that a head-and-shoulder pattern appears to be in formation on the weekly timeframe chart, as attached. This being the case means that we may get to see BTCUSD prices soar all the way to the $45,000 mark. Do note, however, that this is my personal opinion on the matter and not financial advice.

Analyst's Expectations

Direction: Bullish

Target: $45,000

Invalidation: $36,280 Is Bitcoin Set to Drop?_2

CONCLUSION

Trading CFDs comes at a risk. To succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

Source: FBS

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Cohen

Economic

Asia is expected to continue to account for the majority of global growth in 2024 and 2025, as it has in 2023, while global growth overall will remain moderate, according to the Economic Outlook released by the Organization for Economic Cooperation and Development on Wednesday.

Prepared by the OECD's economics department, the outlook provides a twice-yearly comprehensive analysis of global economic trends and prospects for the next two years, encompassing output, employment, government spending, prices and international influences.

The OECD stated in the report that global trade growth has been unexpectedly weak during the past year and is currently moderating due to the persistent impact of monetary policy tightening and lower business and consumer confidence.

It projects global GDP growth of 2.9 percent in 2023, followed by a mild slowdown to 2.7 percent in 2024 and a slight improvement to 3 percent in 2025.

Among G20 economies, China is projected to grow at a rate of 5.2 percent this year, followed by a decrease to 4.7 percent in 2024 and to 4.2 percent in 2025.

India has the highest growth prediction, with 6.1 percent forecast in 2024 and 6.5 percent in 2025.

The area comprising European nations that use the euro for currency is projected to have GDP growth of 0.6 percent in 2023, with subsequent increases to 0.9 percent in 2024 and 1.5 percent in 2025.

France, the United Kingdom, Italy and Germany are all projected to have low growth rates during 2024 of less than 1 percent, with Germany expected to be the lowest at 0.6 percent. The four economies each have the same growth forecast for 2025 of 1.2 percent.

In the US, GDP growth is expected to be 2.4 percent in 2023, slowing to 1.5 percent in 2024, and then showing a slight improvement to 1.7 percent in 2025.

The OECD said countries' monetary policies should remain restrictive until there are clear signs that inflationary pressures have reduced.

It said emerging market economies may have room for rate reductions, but the pace at which these can be implemented will be constrained by worldwide financial conditions.

"The global economy continues to confront the challenges of both low growth and elevated inflation, with a mild slowdown next year, mainly as a result of the necessary monetary policy tightening over the past two years. Inflation has declined from last year's peaks. We expect that inflation will be back at central bank targets by 2025 in most economies," OECD Secretary-General Mathias Cormann said. "Over the longer term, our projections show a significant rise in government debt, in part as a result of a further slowdown in growth.

"Stronger efforts are needed to rebuild fiscal space, also by boosting growth. To secure stronger growth, we need to boost competition, investment, and skills and improve multilateral cooperation to tackle common challenges, like reinvigorating global trade flows and delivering transformative action on climate change."

The OECD said greater emphasis should be placed on keeping markets open to facilitate the digital and green transformations, and that fiscal policy ought to address long-term spending challenges.

"Governments really need to start confronting the mounting challenges that public finances face, particularly from ageing populations and climate change," said Clare Lombardelli, the OECD's chief economist.

"Governments need to spend smarter, and policy makers need to contain current and future fiscal pressures while preserving investment and rebuilding buffers to respond to future shocks."

Source: ChinaDaily

To stay updated on all economic events of today, please check out our Economic calendar

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Economic

Stocks

Wall Street performance was more mixed overnight, with the Nasdaq (-0.2%) seeing some slight profit-taking while more notably, the DJIA has surged 1.5% - a whopping 520 points upmove to trigger a new year-to-date high. A significant 9.4% gain in Salesforce share price may account partly for the surge, with its better-than-expected 3Q earning results fuelling the optimism.

The US core personal consumption expenditures (PCE) price data release overnight showed that US inflation continues to moderate, with both headline and core pricing pressures in line with market expectations at 3% and 3.5% year-on-year growth respectively. But given the dovish pricing for rate expectations already in place (125 basis point (bp) cuts priced through 2024), the data largely served as a validation for inflation progress and failed to trigger much of a positive move in Wall Street.

The US dollar did gain 0.8% overnight, but failure to overcome its key 200-day moving average (MA) ahead may still keep the downward bias intact. The AUD/USD may be on watch, with the pair attempting to bounce off its 200-day MA lately. Further upside may leave the 0.676 level in sight for a retest, where a resistance confluence stands from its weekly Ichimoku cloud zone. The pair has failed to overcome its weekly cloud resistance on at least four occasions since February 2022, leaving any upward break as a key conviction move for a potential trend reversal. China's Caixin PMI Surprises, While Oil Prices Failed at 200-Day MA_1

China's Caixin PMI Surprises, While Oil Prices Failed at 200-Day MA_1

Asia Open

Asian stocks look set for a weaker open, with Nikkei +0.09%, ASX -0.42% and KOSPI -0.69% at the time of writing. A series of manufacturing purchasing managers index (PMI) data in the region may provide an optimistic take on economic conditions, with an improvement seen in Indonesia, Philippines, South Korea, Taiwan and Thailand in November from a month ago.

Following the disappointing read in China's official PMI yesterday, the Caixin PMI data has provided a more optimistic view, with manufacturing PMI registering a 50.7 read versus the 49.8 consensus. The return to expansion may help to calm some nerves around China's on-and-off recovery momentum, although a sustained recovery trend will still need to be seen to provide the conviction that the worst is indeed over.

Aside, the Straits Times Index continue to remain lacklustre, as an initial attempt to bounce at the start of November failed to find much follow-through. A broader descending wedge formation seems to be in place for now, with the series of lower highs and lower lows since July 2023 validating the prevailing near-term downward trend. Further downside may leave the key psychological 3,000 level on watch ahead, while market participants will attempt to seek for any upward break of the wedge formation to find some conviction of greater control from buyers.

On the watchlist: Oil prices failed to sustain above its 200-day MA once more

The conclusion of the recent Organization of the Petroleum Exporting Countries (OPEC+) meeting brought an additional one million barrel-a-day cut to the table but the decision to deepen cuts failed to convince, with oil prices plunging 2.7% overnight. The voluntary nature of additional output cuts may provide less affirmation behind the decision, which may drive some unwinding of previous gains that were pricing for more forceful action.

With the overnight sell-off, Brent crude prices have failed to sustain above its 200-day MA for the third occasions since November this year. The key MA trendline will serve as immediate resistance to overcome, which seems to coincide with the neckline of an inverse head-and-shoulder formation as well. For now, the downside bias seem to remain, with further downside potentially leaving the November low on watch for a retest. China's Caixin PMI Surprises, While Oil Prices Failed at 200-Day MA_3

China's Caixin PMI Surprises, While Oil Prices Failed at 200-Day MA_3

To stay updated on all economic events of today, please check out our Economic calendar

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Titan FX

Forex

USD/JPY Technical Analysis

The US Dollar saw a major decline from well above 149.50 against the Japanese Yen. USD/JPY declined below the 148.50 and 148.00 support levels to enter a bearish zone.

Looking at the 4-hour chart, the pair settled below the 148.00 level, the 100 simple moving average (red, 4 hours), and the 200 simple moving average (green, 4 hours).

It even spiked below the 147.00 level. A low was formed near 146.6 before the pair started an upside correction. There was a minor increase above the 147.20 level. The pair surpassed the 23.6% Fib retracement level of the downward move from the 149.71 swing high to the 146.66 low.

On the upside, immediate resistance is near the 148.00 level. The next key resistance is near the 148.20 level or the trend line. It coincides with the 50% Fib retracement level of the downward move from the 149.71 swing high to the 146.66 low.

A close above the 148.20 zone could open the doors for more upsides. The next stop for the bulls might be 148.80. If not, USD/JPY might resume its decline. Immediate support is near the 147.00 level.

The next key support sits at 146.65, below which the pair could test the 145.00 pivot level in the near term. Any more losses might call for a move toward 143.20.

Looking at Gold, there was a strong increase above the $2,025 resistance but the bears remained active near $2,050.

Economic Releases

Germany Manufacturing PMI for Nov 2023 - Forecast 42.3, versus 42.3 previous.

Euro Zone Manufacturing PMI for Nov 2023 – Forecast 43.8, versus 43.8 previous.

UK Manufacturing PMI for Nov 2023 – Forecast 46.6, versus 46.7 previous.

US Manufacturing PMI for Nov 2023 – Forecast 49.4, versus 49.4 previous.

US ISM Manufacturing PMI for Nov 2023 – Forecast 47.6, versus 46.7 previous.

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Daily News

[Quick Facts]

1. OPEC+ agrees production cuts of 2.2 million bpd early next year.

2. U.S. House passes resolution to block Iran's access to $6 bln from prisoner swap.

3. Yellen says the Fed doesn't need to raise rates again.

4. ECB rate cut pressure increases as Eurozone inflation weakens.

5. Fed officials dampen market expectations for quick rate cuts.

6. U.S. October PCE inflation hits a two-and-a-half-year low.

[News Details]

OPEC+ agrees production cuts of 2.2 million bpd early next year

OPEC+ held an online meeting on Thursday and agreed to voluntarily cut oil production early next year by about 2.2 million barrels per day (bpd), of which Saudi Arabia will extend its current voluntary production cuts. However, no specific details were announced. The above plan includes Saudi Arabia and Russia extending their voluntary supply cuts of 1.3 million bpd. The remaining 900,000 bpd quota includes 200,000 bpd of fuel export reductions from Russia, with the rest divided among the other six member states.

This production cut decision, however, did not send oil prices higher. Instead, oil prices tumbled. The market's reaction implies skepticism about whether the production cuts will take effect.

U.S. House passes resolution to block Iran's access to $6 bln from prisoner swap

The U.S. House of Representatives voted on Nov. 30. The results showed that the U.S. decided to re-freeze the $6 billion Iranian funds that had been unfrozen previously. The measure was approved as part of a new version of the No Funds for Iranian Terrorism Act, which received 307 votes in favor (119 against) in the House.

Under the terms of this act, any financial institution would be sanctioned once it transacts with the Qatari bank where the funds are deposited.

Yellen says the Fed doesn't need to raise rates again

The U.S. economy does not need further drastic monetary policy tightening to stamp out inflationary expectations, said U.S. Treasury Secretary Janet Yellen in an interview on Thursday. The employment is strong and the U.S. economy is expected to achieve a "soft landing."

Unemployment is stabilizing more or less, economic growth is slowing to a sustainable level, and wage gains are really translating into more real income. "So my hope is that Americans gradually will see that things are getting better," Yellen said.

ECB rate cut pressure increases as Eurozone inflation weakens

The preliminary Eurozone CPI for November released on Thursday came in at 2.4% year-on-year, lower than expected 2.7%. It's a significant drop from the 4%-5% inflation rate two months ago. Energy prices continue to be the main driver of bringing inflation down.

The market is now pricing that the European Central Bank (ECB) will cut rates by 25 basis points next April. A month ago, the market expected the ECB to cut rates as soon as June next year.

Fed officials dampen market expectations for quick rate cuts

New York Fed President John Williams said in a speech on Thursday that the Fed's benchmark lending rate is at or near its peak level. At present, the market has strong expectations that the Fed will cut interest rates next year, but it will depend on the evolution of the U.S. economy and inflation, and it is too early to talk about interest rate cuts.

U.S. inflation is expected to fall back to 2.25% in 2024. If inflation remains stubbornly high, the Fed may need to tighten policy further. Interest rate policy action will continue to depend on data.

On the same day, dovish San Francisco Fed President Mary Daly said she is not considering interest rate cuts yet. The Fed's monetary policy is in a very good place and the Fed should remain patient and vigilant. It is premature to determine whether the Federal Reserve has done the current cycle of interest rate increases. It is too early to declare victory in the fight against inflation. The United States will not see a recession in the foreseeable future.

The speeches by Williams and Daly caused traders to lower their bets on a rate cut in 2024. U.S. bond yields picked up briefly after Daly's speech and generally set new daily highs.

U.S. October PCE inflation hits a two-and-a-half-year low

U.S. PCE rose 3% year-on-year in October, flat with the expected 3%. It is coming down at a steady pace. Meanwhile, the annualized rate of core PCE excluding food and energy prices fell to 3.5%, flat with the expected 3.5%. Both figures were the lowest since April 2021.

This was the last PCE data before the Fed's last policy meeting this year. The current markets broadly do not believe that the Fed will raise interest rates again, and their focus has long been turned to "when to cut interest rates". The publication of the PCE data certainly consolidated the market expectations.