2023-12-13 11:30

Article by IG Senior Market Analyst Axel Rudolph FTSE 100, DAX 40, Russell 2000 - Analysis and Charts FTSE 100 under pressure as UK GDP shrinks The FTSE 100 briefly made a new two-month high at 7,609 on Tuesday, along the September-to-December downtrend line, before falling back to its 200-day simple moving average (SMA) at 7,562 as UK GDP disappoints. The services sector was the largest faller, followed by production and construction. Further sideways trading ahead of this evening’s Federal Open Market Committee (FOMC) and Thursday’s Bank of England (BoE) meetings is likely to be seen. A fall through Tuesday’s 7,541 low may lead to Monday’s low and the 55-day simple moving average (SMA) at 7,493 to 7,478 being revisited. Minor resistance above Friday’s 7,583 high comes in at this week’s 7,609 peak. FTSE 100 Daily Chart See how daily and weekly changes in retail sentiment can affect the FTSE 100 DAX 40 consolidates below a new record high The DAX 40’s strong advance from its October low over six consecutive bullish weeks led to a new record high being made above the 16,850 mark on Tuesday but did so in low volume and volatility despite better-than-expected German ZEW consumer morale. All eyes are now on Thursday’s European Central Bank (ECB) monetary policy meeting and the press conference which will follow it. A rise above Tuesday’s all-time high at 16,853 would eye the 16,900 mark whereas a slip through Monday’s 16,735 low could lead to a drop back towards the October-to-December uptrend line at 16,544 being witnessed. DAX 40 Daily Chart Russell 2000 trades at three-month highs but looks potentially toppish The Russell 2000, the great underperformer of US stock indices with only a 7.5% gain year-to-date, hit a three-month high at 1,902 on Tuesday ahead of Wednesday’s Federal Reserve (Fed) meeting and rate announcement. Since this week’s high has been accompanied by negative divergence on the daily Relative Strength Index (RSI), there is a potential for a bearish reversal soon rearing its head. A fall through Tuesday’s 1,866 low would eye the October-to-November uptrend line at 1,856 as well as last week’s low at 1,844. Further down meanders the 200-day simple moving average (SMA) at 1,817 which may act as support, if reached. A rise above 1,902 would put the September peak at 1,931 on the cards, though. Russell 200 Daily Chart https://www.dailyfx.com/news/ftse-100-dax-40-and-russell-2000-consolidate-ahead-of-fomc-meeting-20231213.html

2023-12-13 09:58

AUD/USD ANALYSIS & TALKING POINTS Aussie bulls hoping for bullish continuation. US PPI & FOMC under the spotlight later today. AUD/USD trades within falling wedge formation. AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP The Australian dollar could not eek out any gains against the USD this week despite some positive consumer confidence data for the December period. US CPI rattled markets yesterday but swiftly pulled back to normality today. The US disinflation rate may be slowing and may make the latter leg of the push towards 2% that much more difficult. Coupled with a resilient Non-Farm Payrolls (NFP) report, significant rate cut expectations by the Federal Reserve may be premature. US PPI is set to tick higher and being touted as a leading indicator for CPI, any upside surprise could weigh negatively on the Aussie dollar. TECHNICAL ANALYSIS AUD/USD DAILY CHART Chart prepared by Warren Venketas, TradingView AUD/USD daily price action above shows a steady decline since testing the long-term trendline resistance zone (black), now trading below the 200-day moving average (blue). That being said, there is no real directional bias with the Relative Strength Index (RSI) favoring neither bullish nor bearish momentum and prices forming a falling wedge type chart pattern (dashed black line) A breakout above wedge resistance could bring the 0.6596 swing high once more – potentially via a dovish outcome from the FOMC later this evening. 0.6700 Trendline resistance 0.6596 Wedge resistance 200-day MA Key support levels: Wedge support 0.6500 0.6459/50-day MA 0.6358 IG CLIENT SENTIMENT DATA: BEARISH (AUD/USD) IGCS shows retail traders are currently net LONG on AUD/USD, with 65% of traders currently holding long positions. https://www.dailyfx.com/news/forex-aud-forecast-fomc-communication-pivotal-for-australian-dollar-wv-20231213.html

2023-12-13 08:13

UK GDP, Pound Sterling News and Analysis UK GDP reveals further signs of concern ahead of final central bank meetings for 2023 Pound sterling depreciates ahead of FOMC later this evening Will the Bank of England acknowledge weaker growth data and notable progress on inflation or will a hawkish message help stabilise the pound? UK GDP Reveals Further Signs of Concern Ahead of Major Central Bank Meetings UK GDP disappointed across multiple measures of GDP growth, coming in at 0.3% compared to October last year and printing flat on average over the last 3-months. Growth has been a major concern in the UK, something that the UK government has attempted to address via its Autumn Statement where it outlined its plans to reinvigorate the UK economy. However, with interest rates expected to remain in restrictive territory for a prolonged period, strain in the economy was inevitable. The Bank of England meets tomorrow to set monetary policy and provide an update on the monetary policy committees thinking as we close out 2023. UK GDP Growth, Year on Year (October) Source: Refinitiv, prepared by Richard Snow Inflation showed drastic improvement in October (orange line), the first substantial drop since the BoE anticipated large price declines all the way back in the first half of the year. The difficulty now for the BoE is to assess whether determinants of price pressures like those in the services sector (red line) are dropping at a satisfactory rate to be able to alter their hawkish tone. Thus far progress has been limited. Source: Refinitiv, prepared by Richard Snow Immediate Market Response EUR/GBP rose, marking a second day of gains should we close in positive territory today. The pair has suffered a massive sell-off as markets anticipate drastic interest rate cuts for the euro area next year on the back of the worsening economic outlook. A marginal recovery in EU sentiment data and German manufacturing PMI data suggests the euro may get a little bit of help if the worst appears to be behind us. EUR/GBP 5-minute chart Source: TradingView, prepared by Richard Snow Are you new to FX trading? The team at DailyFX has curated a collection of guides to help you understand the key fundamentals of the FX market to accelerate your learning: GBP/USD eased after the GDP print, heading towards the significant 200-day simple moving average as a dynamic level of support. The FOMC statement and press conference is due later today where there is a fair amount of repricing risk should the Fed stick to its prior forecast of only 50 basis points worth of cuts in 2024, which could see USD strength and a move lower in GBP/USD. GBP/USD Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/uk-breaking-news-gdp-misses-forecasts-sterling-dips-ahead-of-fomc-20231213.html

2023-12-12 23:00

NASDAQ 100 FORECAST: The Nasdaq 100 consolidates higher and reaches its best level since January 2022 after staging a bullish breakout in recent days While the index’s technical outlook remains positive, the Fed could end the party on Wall Street The FOMC is seen holding interest rates steady at its December meeting, but policy guidance may be hawkish Most Read: US Dollar on Edge Before Fed Decision, Technical Setups on EUR/USD & GBP/USD The Nasdaq 100 and S&P 500 consolidated higher and settled at their best levels since early 2022 on Tuesday, continuing their upward trajectory after breaking key resistance thresholds earlier in the week in a context of falling U.S. Treasury yields. Although stocks maintain a constructive profile from a technical standpoint, their good fortune could soon end if the Federal Reserve moves in to crush exuberance on Wall Street to limit the counterproductive and steady relaxation of financial conditions, which is jeopardizing efforts to restore price stability. The FOMC will announce its last decision of the year on Wednesday afternoon, when it ends its two-day meeting. In terms of estimates, the central bank is seen holding borrowing costs unchanged for the third straight gathering, but could adopt a hawkish position, pushing back against the aggressive rate cut wagers accumulated by investors. Over the past month, interest rate expectations have shifted in a dovish direction, with traders discounting more than 100 basis points of easing through 2024. This scenario appears extreme and inconsistent with the current economic reality of strong job growth and sticky inflation, so it would not be surprising to see policymakers go entirely in the opposite direction. If the Fed comes out swinging, retains a tightening bias in its communication and signals that it will not slash rates as much as financial markets contemplate, Treasury yields could shoot higher as traders unwind dovish bets on the monetary policy outlook. This would be bearish for the S&P 500 and Nasdaq 100. NASDAQ 100 TECHNICAL ANALYSIS The Nasdaq 100 extended its advance on Tuesday, pushing past trendline resistance at 16,500. If this bullish breakout is sustained, the tech index is likely to consolidate upwards in the coming days, paving the way for a retest of its record. On further strength, a new high above 17,000 could materialize before the year is over. On the other hand, if sentiment swings back in favor of sellers and downside pressure picks up steam, initial support is positioned near 16,500, followed by 16,150/16,050. The latter range may provide some stability for the market on a pullback, but a clean breakdown could open the door for a retracement towards 15,700. NASDAQ 100 TECHNICAL CHART Nasdaq 100 Chart Created Using TradingView https://www.dailyfx.com/news/ndx-nasdaq-100-consolidates-higher-after-breakout-will-the-fed-end-exuberance-20231212.html

2023-12-12 20:39

GOLD (XAU/USD) PRICE FORECAST: Gold (XAU/USD) Remains Vulnerable to Further Downside Below the $2000 Handle. FOMC Meeting and Economic Projections Hold the Key for the Precious Metal. Silver (XAGUSD) at a Key Inflection Point as Retail Traders Ramp up Long Positioning. To Learn More About Price Action, Chart Patterns and Moving Averages, Check out the DailyFX Education Section. MOST READ: US Inflation in Line with Estimates but MoM CPI Rises, DXY Ticks Higher Gold prices attempted a recovery today and reached a high of around $1997/oz before sellers took control in the aftermath of the US CPI release. The CPI print appeared positive at first glance but the uptick in the monthly inflation figures mean the Fed are unlikely to commit to any rate cuts at tomorrow’s meeting. This saw the DXY rise temporarily and push Gold prices back to a key support area. Supercharge your trading prowess with an in-depth look at how to trade Gold. FOMC MEETING AND SAFE HAVEN APPEAL As geopolitical tensions remain on a knife edge Gold is likely to remain supported and attract buyers on significant dips. The appeal of the precious metal remains high and with the inevitability of rate cuts at some point in 2024 Gold will likely remain above the $1800/oz mark for the foreseeable future. Heading into the FOMC meeting tomorrow and all eyes will be fixed on the Economic Projections and how they might differ from the current market expectations. Comments by Fed Chair Powell will also hold a significant amount of sway tomorrow and I do expect some form of push back by the Fed Chair regardless of what the Economic Projections reveal. The immediate direction for Gold prices will rest on the reaction of the US Dollar and US Yields to the meeting tomorrow. Any significant deviations between market participants and the Fed could be the catalyst needed for Golds next move. Push back from the Fed and significant repricing regarding cuts in 2024 could give the US Dollar legs and push Gold closer the $1950/oz support area. If the Fed do adopt a more dovish approach and hint at rate cuts in 2024 in line with current market expectations, then we could see Gold bulls rejuvenated and push back above the $2000/oz. All in all, the US Dollar still holds the key as markets wait with bated breath. TECHNICAL OUTLOOK GOLD Form a technical perspective, Gold is resting in a key support area of its own heading into tomorrow's FOMC meeting. The range between $1977-$1984 remains a key area as it has consistently shifted between support and resistance of late. The daily candle today does not inspire confidence but the failure to print a fresh low may be indicative of the buying pressure still evident in the precious metal. A break lower from here faces a raft of support before the psychological $1950 area is reached with 50-day MA resting around the $1968 support area while the 200-day MA rests just above the $1950 handle. Below this the $1940 and $1930 handle both provide some support and could come into play should we see an aggressive selloff tomorrow. A ush higher here needs to gain acceptance back above the $2000 an ounce mark if the precious metal is looking to kick on and head back toward the recently created all-time high. Key Levels to Keep an Eye On: Resistance levels: 2000.00 2007.00 2025.00 Support levels: 1968.00 1950.00 1941.00 Gold (XAU/USD) Daily Chart – December 12, 2023 Source: TradingView, Chart Prepared by Zain Vawda SILVER The technical outlook for silver is intriguing as price rests at a key inflection point heading into the FOMC meeting. Silver has fallen aggressively from recent highs with 8 consecutive dys of losses leading it back to the ascending trendline. This will be the third touch which would usually lead to a potential bullish pattern and fresh highs above the 26.00. A daily candle close below the 22.00 will see structure broken and invalidate a bullish continuation and could see recent lows at the 20.500 mark come into play over the coming weeks. This just highlights the importance of the FOMC meeting tomorrow. Silver (XAG/USD) Daily Chart – December 12, 2023 Source: TradingView, Chart Prepared by Zain Vawda IG CLIENT SENTIMENT Taking a quick look at the IG Client Sentiment, Retail Traders are Overwhelmingly Long on Silver with 89% of retail traders holding Long positions. Given the Contrarian View to Crowd Sentiment Adopted Here at DailyFX, is this a sign that Silver may break through the trendline and change structure? https://www.dailyfx.com/news/gold-price-forecast-sellers-in-control-following-failed-2000-retest-fomc-next-20231212.html

2023-12-12 17:30

Most Read: Gold Price Outlook Rests on Fed’s Guidance, Nasdaq 100 Breaks Out The Federal Reserve will announce its December monetary policy verdict on Wednesday. Officials are expected to retain the status quo for the third consecutive gathering, keeping borrowing costs in their current range of 5.25% to 5.50%. In terms of forward guidance, Chairman Powell has indicated that “it would be premature to conclude” that the Fed has achieved a sufficiently restrictive stance, so the institution may be inclined to maintain a tightening bias in its communication for now. Aside from the official statement, traders should carefully examine the updated “Summary of Economic Projections” to assess whether the central bank’s policy outlook aligns with market’s dovish expectations, which currently envision about 100 basis points of easing over the next 12 months. In light of the stubbornly sticky inflation profile and the necessity to prevent a further relaxation in financial conditions, the Fed may decide to push back against the aggressive rate cuts discounted for 2024. This scenario could spark a hawkish repricing the central bank’s path, exerting upward pressure on yields and the U.S. dollar. EUR/USD TECHNICAL ANALYSIS EUR/USD exploded higher in November, but has weakened moderately this month, with the exchange rate settling below its 200-day simple moving average in recent days– a bearish technical signal. If the pullback extends, a potential retest of the 50-day SMA could materialize soon. Continued weakness might draw focus towards trendline support, currently traversing the 1.0640 region. In contrast, if EUR/USD stages a resurgence and trek upwards, technical resistance looms at 1.0830, just around the 200-day SMA. Overcoming this barrier might prove challenging for the bulls, but a breakout could steer the pair towards 1.0960, the 61.8% Fibonacci retracement of the July/October decline. On further strength, the focus shifts to November’s peak. EUR/USD TECHNICAL CHART EUR/USD Chart Prepared Using TradingView Keen to understand the role of retail positioning in GBP/USD’s price action dynamics? Our sentiment guide delivers all the essential insights. Get your free copy now! GBP/USD TECHNICAL ANALYSIS GBP/USD has trended lower in recent days after failing to clear a key ceiling at 1.2720, which represents the 61.8% Fibonacci retracement of the July/October slump. If this downtrend persists, technical support lies near 1.2500, where the 200-day simple moving average converges with a short-term ascending trendline. Further losses could expose the 1.2450 zone. Conversely, if cable manages to recover from current levels, initial resistance appears at 1.2590. To rekindle bullish sentiment, breaching this technical barrier is crucial – such a move could attract new buyers into the market and drive the pair towards 1.2720. On further strength, attention turns to the 1.2800 handle. GBP/USD TECHNICAL CHART GBP/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-on-edge-before-fed-decision-technical-setups-on-eur-usd-gbp-usd-20231212.html