2023-12-08 11:32

Article by IG Senior Market Analyst Axel Rudolph FTSE100, DAX40, S&P 500 Analysis and Charts FTSE 100 grinds higher The FTSE 100 once more tries to reach this and last week’s six-week high at 7,543 as traders await US non-farm payrolls data.The UK blue chip index is being supported by the 55-day simple moving average (SMA) and Thursday’s low at 7,480 to 7,476. While this area underpins, upside pressure should be maintained. Above 7,543 meanders the 200-day simple moving average (SMA) at 7,567. Support below the 7,480 to 7,476 sits at Tuesday’s 7,459 low. FTSE 100 Daily Chart DAX 40 is beginning to see bullish fatigue The DAX 40’s near 14% advance from its October low is slowing down amid bullish fatigue ahead of today’s US unemployment data. The German stock index hit a new all-time record high above its 16,532 July peak at 16,729 on Wednesday, getting ever closer to the minor psychological 17,000 level. Immediate upside pressure is on the wane, though, as traders adopt a wait-and-see stance. Minor support below Thursday’s 16,594 low sits at Wednesday’s 16,544 low, ahead of last Friday’s 16,463 high. DAX 40 Daily Chart Learn from Other Trader's Mistakes S&P 500 awaits US NFP data The S&P’s advance took it to 4,599 last week, to marginally below the July peak at 4,607, both of which remain in sight as traders await the publication of US unemployment data later today. While last and this week’s lows at 4,544 to 4,537 hold, the recent uptrend remains intact. Once the current sideways trading range has ended, the March 2022 peak at 4,637 would be in focus on a bullish breakout. Immediate support can be seen at the 22 November high of 4,569. Failure at 4,544 to 4,537 would lead to the 4,516 mid-September high being targeted, though. S&P 500 Daily Chart https://www.dailyfx.com/news/ftse-100-grinds-higher-while-dax-40-and-s-p-500-stall-ahead-of-us-employment-data-20231208.html

2023-12-08 11:30

Gold (XAU/USD) Analysis and Charts Will the US Jobs Report spark another gold price shock? Gold’s daily chart remains positive, for now. Most Read: XAU/USD Breaking News: Gold Reaches an All-Time High Learn How to Trade Gold with our Complimentary Guide A busy pre-Christmas for traders starts today with the latest US Jobs release at 13:30 UK. This week’s US labor data has been weak with Tuesday’s JOLTs Job Openings at the lowest level in nearly two-and-a-half years, while Wednesday’s private sector ADP release showed job and pay growth moderating further. US ADP Monthly Stats Today’s Nonfarm Payroll report is expected to show 180k new jobs created in November compared to 150k in October, while the unemployment rate is expected to remain unchanged at 3.9%. A lower-than-expected number will underpin expectations that the Fed will start cutting interest rates at the end of Q1/start of Q2 next year. The latest CME Fed Fund probabilities see a total of 125 basis points of rate cuts in the US next year. CME Fed Fund Probabilities The gold market started with a bang this week when the precious metal soared to a record high in Asia trade on Monday. The wider market however didn’t trust the move and sent gold back towards $2,000/oz. before XAU/USD stabilized over the last few days to its current level on either side of $2,030/oz. The technical set up remains positive with gold above all three simple moving averages, while the 50-/200-day crossover at the end of last week signaled a bullish ‘golden cross’. Initial support is seen at $2,009/oz. followed by $2,000/oz. A break above $2,032/oz. and $2,043/oz. is needed to consolidate bullish momentum. Gold Daily Price Chart – December 8, 2023 Chart via TradingView Retail trader data shows 61.39% of traders are net-long with the ratio of traders long to short at 1.59 to 1.The number of traders net-long is 3.79% higher than yesterday and 26.55% higher than last week, while the number of traders net-short is 3.11% lower than yesterday and 26.92% lower than last week. See how changes in IG Retail Trader data can affect price action. What is your view on Gold – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/gold-xau-usd-primed-for-us-nfps-is-another-price-shock-on-the-cards-20231208.html

2023-12-08 10:10

Japanese GDP and JPY Analysis Japanese Q3 GDP revised lower as inflation weighs on spending Japanese government bond yields recover sharply, buoying the yen Non-farm payrolls could extend recent moves on weaker jobs data The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Japanese Q3 GDP revised lower as inflation weighs on spending Japanese (final) Q3 data was revised lower as inflation appeared to be negatively impacting spending in the region. Inflation has been above the Bank of Japan’s (BoJ) 2% target for more than a year but officials require more convincing before putting an end to years of stimulus, spearheaded by negative interest rates. BoJ Governor Kazuo Ueda has often listed the preconditions that inflation needs to be stably and consistently above the 2% target and expected to continue in such a manner going forward. The other condition concerns wage growth, which likewise needs to show persistence. Previously, Ueda was confident the bank will have enough data by year end to make a decision on possibly withdrawing negative interest rates, however, recent comments suggest this may be delayed to Q1 of next year, after wage negotiations have taken place. Markets now see credible signs of a BoJ rate hike which has resulted in a notable rise in expectations via interest rate futures. Therefore, the yen has benefitted from the prospect of future rate hikes and stronger Japanese Government bond yields, particularly the 5 and 10 year. Markets see credible signs of BoJ rate hikes on the horizon (basis points priced in) Source: Bloomberg The chart below shows the sharp recovery in Japanese Government bond yields (10-year). The rise is in contrast with the US which is witnessing cooling yields on the basis of increasing rate cut expectations for the world's largest economy. The widening yield differential helps prop up USD/JPY. Japanese 10-year government bond yields rise Source: TradingView, prepared by Richard Snow Non-farm payrolls could extend recent moves on weaker jobs data This week has shown us that US job openings are fewer than anticipated, people are less likely to quit and ADP private payrolls disappointed expectations. All of these signs point to a potentially disappointing NFP print but with that said, the above-mentioned data points have proven lousy predictors of the NFP print. A strong NFP figure could help stall the decline in USD/JPY temporarily but the winds of change are clearly upon us (US expecting cuts, Japan to hike in 2024). A worse than expected number could easily reengage USD/JPY sellers, potentially retesting the 200-day simple moving average (SMA) or even the 141.50 prior low before the week is up. A surprise to the upside in US labor data could see an imminent test of 145 but any longer lasting dollar strength looks unlikely. Another statistic to monitor is the unemployment rate and the market reaction if we are to finally see a tag of the 4% mark as this could cause a greater level of concern that the job market may be easing a little too fast for comfort. USD/JPY Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/japanese-gdp-strained-by-rising-inflation-as-boj-spurs-hawkish-bets-20231208.html

2023-12-08 06:58

AUD/USD ANALYSIS & TALKING POINTS RBA Brischetto lauds Australians, AUD bid. Will NFPs echo recent ADP employment change? AUD/USD patiently awaits NFP data. AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP From an Australian perspective, the Reserve Bank of Australia’s (RBA) Andrea Brischetto issued an alert around Australians risk of financial stress due to the current high interest rate environment and increasing unemployment. Although early days, the seed has been planted for households to adopt more cautious pending habits to meet their financial obligations. Overall, households are coping well and highlight the resilience of the Australian economy – net positive for the AUD. Money market pricing below may be a positive sign for Australian households with expectations showing a dovish repricing this week by around 12bps (December 2024) as well as little hope for an additional rate hike. We have seen this trend ripple across central bank forecasts as the lagged impact of tight monetary policy takes effect. RBA INTEREST RATE PROBABILITIES Source: Refinitiv Option expiries for today for AUD/USD are shown below with preference to the upside relative to current levels. AUD/USD: 0.6700 (AUD727.9M), 0.6850 (AUD642.3M), 0.6525 (AUD505.4M) TECHNICAL ANALYSIS AUD/USD DAILY CHART Chart prepared by Warren Venketas, TradingView AUD/USD daily price action above shows hesitancy by traders to favor a directional bias at this point with NFPs looming. It would be wise to remain cautious and potentially look for opportunities post-NFP. A beat could see AUD/USD bulls breach the long-term trendline resistance (black) and look to test July swing highs. On the contrary, a miss may push the Aussie dollar below the 200-day moving average (blue) once more and retest the 0.6500 psychological handle. 0.6700 Trendline resistance 0.6596 Key support levels: 200-day MA 0.6500 0.6459 50-day MA 0.6358 IG CLIENT SENTIMENT DATA: MIXED (AUD/USD) IGCS shows retail traders are currently net LONG on AUD/USD, with 58% of traders currently holding long positions. https://www.dailyfx.com/news/forex-aud-forecast-australian-households-managing-tough-financial-conditions-rba-s-brischetto-wv-20231208.html

2023-12-07 23:55

GOLD, YIELDS, US DOLLAR, NASDAQ 100 FORECAST Gold prices, Treasury yields, the U.S. dollar and the Nasdaq 100 will be quite sensitive to the November U.S. nonfarm payrolls report, as jobs data can have a direct impact on market pricing of the Fed’s policy path Strong employment growth will be bullish for yields and the U.S. dollar, but negative for gold and the Nasdaq 100 Weak job creation is likely to be bearish for rates and the greenback, but positive for precious metals and tech stocks Most Read: Gold Prices on Edge Ahead of Key US Jobs Data, Trade Setups on XAU/USD The U.S. Bureau of Labor Statistics will release the November employment report on Friday morning, an event that could bring significant volatility to financial markets and give rise to attractive trading setups heading into the weekend. According to consensus estimates, the U.S. economy generated 180,000 jobs last month after an increase of 150,000 payrolls in October. With this result, the unemployment rate is expected to remain unchanged at 3.9%. Elsewhere, average hourly earnings, a powerful inflation gauge closely followed by the central bank, are forecast to have risen 0.3% m-o-m, bringing the 12-month reading from 4.1% to 4.0%, a positive, albeit small, directional improvement for policymakers. UPCOMING US JOBS REPORT To sustain recent market dynamics—keeping Treasury yields and the U.S. dollar biased lower while maintaining the broader bullish momentum going for risk assets and precious metals, incoming data will have to validate overly dovish interest rate expectations by showing that the economy is starting to slow down sharply. In the chart below, which displays the implied yield on all 2024 Fed funds futures contracts, we can see that rate-cut bets have risen aggressively in recent weeks, with traders discounting over 100 basis points of easing by the end of next year. Markets may be sniffing trouble on the horizon, or they may be dead wrong. Stay ahead of the curve! Request your complimentary gold forecast for a thorough overview of the precious metal’s technical and fundamental outlook 2024 FED FUNDS FUTURES CONTRACTS (IMPLIED YIELDS) Source: TradingView Any data from the November employment report that contradicts the premise of broadening economic weakness and is inconsistent with too much easing over the next 12 months, such as robust job creation or extremely hot wage growth, could push traders to unwind extremely dovish monetary policy wagers, boosting yields and this U.S. dollar. This scenario would weigh on gold and the Nasdaq 100. Conversely, disappointing NFP figures that surprise to the downside by a wide margin could have the opposite effect on markets by justifying concerns about brewing economic challenges and by supporting the case for several rate cuts in the coming quarters. This scenario, likely to apply downward pressure on yields and the U.S. dollar, could prove beneficial for gold prices and the Nasdaq 100. If you're looking for an in-depth analysis of U.S. equity indices, our quarterly stock market trading forecast is packed with great fundamental and technical insights. Get a free copy now! https://www.dailyfx.com/news/nfp-us-jobs-report-preview-what-s-next-for-gold-us-dollar-yields-nasdaq-100-20231207.html

2023-12-07 21:00

EUR/USD, EUR/GBP PRICE, CHARTS AND ANALYSIS: The Euro Enjoyed a Positive Day Despite GDP Revision and Stagnation. Goldman Sachs Sees a Quicker than Expected Drop in Inflation and the First ECB Rate Cut in April. Can EUR/USD and EUR/GBP Continue to Rise Ahead of the ECB Meeting? To Learn More About Price Action, Chart Patterns and Moving Averages, Check out the DailyFX Education Section. Most Read: Oil Price Forecast: $70 a Barrel Holds Firm as China Adds to Demand Concerns EURO GDP REVISION AND FUNDAMENTAL BACKDROP The Euro outlook continues to look bleak despite a resilient day against the Greenback. EUR/GBP as well seems to be setting up for a bounce following a massive selloff since November 20. The Euro Area GDP 3rd estimate was out this morning confirming stagnation in Q3 as the Euro area economy feels the pinch. The YoY print managed to avoid a contraction being revised lower to 0% with many sectors struggling in the Euro Area which has prompted market participants to aggressively reprice rate cut expectations. This has weighed on the Euro of late with many believing the ECB may have to cut the most in 2024 to potentially stimulate a sluggish economy. Earlier today Goldman Sachs stated their belief that they see rate cuts as early as April by the ECB. The Bank cited a stronger than expected drop in inflation in the months ahead, which could in part be driven by a serious drop-off in demand. Heading into next week Central Bank meetings it will be interesting to gauge the updated economic projections by the ECB and if there any clues as to potential rate cuts. PRICE ACTION AND POTENTIAL SETUPS EUR/USD EURUSD finally arrested its slide in the US session in particular bouncing back above the 1.0800 handle. Not surprising given the key area of support around the 1.0760-1.0750 area, the question now being whether the recovery can continue. US Jobs data may play a key role tomorrow but let’s take a look at key areas of support and resistance that may provide some opportunity. Immediate resistance for EURUSD rests at the 200-day MA which was tapped today and rests around the 1.0821 handle. A break above this may face some opposition at 1.0840 and 1.0900 respectively. A continued push back toward and potentially below support at the 1.0750 mark may see EURUSD drop toward the 1.0700 handle where the 50-day MA rests. Key Levels to Keep an Eye On: Support levels: 1.0760 1.0700 1.0656 Resistance levels: 1.0821 1.0840 1.0900 EUR/USD Daily Chart Source: TradingView, prepared by Zain Vawda EUR/GBP EURGBP has been caught in a 40-pip range for the last 4 days as you can see by the pink/purple box on the chart below. A breakout of the box could be a sign of further upside. There are conflicting signals however as we have just seen a death cross take place with the 20-day MA crossing below the 200-day MA. This of course hints at bearish momentum while the candlesticks themselves tell a different story, hence my confusion. There is of course every chance that EURGBP may remain rangebound heading into next week. The ECB Central Bank meeting may provide some clarity for the pair. Key Levels to Keep an Eye On: Support levels: 0.8550 0.8500 0.8487 Resistance levels: 0.8587 0.8636 0.8668 EUR/GBP Daily Chart Source: TradingView, prepared by Zain Vawda IG CLIENT SENTIMENT IG Client Sentiment datatells us that 73% of Traders are currently holding LONG positions on EURGBP. Given the contrarian view to client sentiment adopted here at DailyFX, does this mean we are destined to revisit the lows at the 0.8500 mark? https://www.dailyfx.com/news/euro-price-action-setups-eur-usd-eur-gbp-post-gdp-revision-20231207.html