2023-12-06 13:00

British Pound - GBP/USD and EUR/GBP Analysis and Charts ECB may slash rates by 150 basis points next year. US Jobs Report the next GBP/USD driver. Most Read: Euro (EUR) Latest: Dovish ECB Commentary Weighs on EUR/USD, Yields Slump Interest rates are set to be slashed in the Euro Area and the US next year as inflation in the two economies looks set to fall further. Current market expectations show the ECB cutting rates by nearly one-and-a-half percentage points from their current 4% level, while the US is seen cutting 125 basis points from the current 525-550 Fed Fund range. Both central banks may announce their first rate cuts at the end of Q1 2024. ECB Rate Probabilities CME FedFund Expectations As rate cut expectations are increased and brought forward, the underlying strength of both the Euro and US dollar reduces. The major move over the last two weeks has been in the Euro and this is noticeable against a range of other currencies. As the Euro weakens, the US dollar index (DXY) gains – the Euro makes up around 60% on the index – and this can be seen clearly on the daily DXY chart over the last week. US Dollar Index (DXY) Daily Chart The Bank of England in contrast is expected to trim rates by 75 basis points next year, underpinning the British Pound against the US dollar and the Euro. Cable is currently trading on either side of 1.2600, propped up by Sterling and weighed on by the US dollar. The daily chart setup remains positive but the current strength of the US dollar is likely to make further upside in the pair limited over the coming days. Support is seen at 1.2547 and resistance at 1.2742. GBP/USD Daily Price Chart A clearer picture of the Euro weakness/Sterling strength can be seen in EUR/GBP. This pair has fallen by over two big figures over the last two weeks and is heading towards a prior zone of support all the way down to 0.8492. This looks set to hold in the short term. EUR/GBP Daily Price Chart Charts using TradingView Retail trader EUR/GBP data show 74.50% of traders are net-long with the ratio of traders long to short at 2.92 to 1.The number of traders net-long is 3.34% higher than yesterday and 24.64% higher than last week, while the number of traders net-short is 2.27% higher than yesterday and 19.64% lower than last week. What Does Changing Retail Sentiment Mean for Price Action? At the end of the week, we have the latest US Jobs Report that is expected to show 180k new jobs created in November. The labor market remains near the top of the Fed’s priorities in its fight against inflation and any major deviation from this market forecast will steer the US dollar, and US Dollar pairs, going into the weekend. What is your view on the British Pound – 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/british-pound-latest-shifting-rate-expectations-move-gbp-usd-and-eur-gbp-20231206.html

2023-12-06 11:30

Article by IG Senior Market Analyst Axel Rudolph FTSE 100, DAX 40, Russell 2000 - Analysis and Charts FTSE 100 resumes ascent The FTSE 100 is heading back up towards last week’s six-week high at 7,543 as traders await more data this week to guide the economic and monetary policy outlook.The index is now trading once more above its 55-day simple moving average (SMA) at 7,485 and targets the November and current December highs at 7,535 to 7,543. Above this resistance area meanders the 200-day simple moving average (SMA) at 7,571. Support below the 55-day SMA at 7,485 and the early November high at 7,484 comes in at Tuesday’s 7,459 low. FTSE 100 Daily Chart DAX 40 trades in record highs The DAX 40 continues to rally despite German factory orders falling for the first time in three months. The index hit a new record high above its 16,532 July peak around the 16,600 mark on Tuesday. Further up beckons the minor psychological 17,000 level. Immediate upside pressure will be maintained while no slip through Friday’s low at 16,237 is seen. Above it minor support can be found around the 1 December high at 16,463 and at Tuesday’s 16,391 low. DAX 40 Daily Chart Russell 2000 trades near three-month highs The Russell 2000, the great underperformer of US stock indices with only a 6% gain year-to-date, has now reached levels last traded in mid-September and so far risen to 1,885 despite much weaker-than-expected US JOLTS job openings. Today’s ADP employment data and, more importantly, Friday’s Non-Farm Payrolls should give investors a better indication of the state of the US labor market. A rise above 1,885 would aim for the September peak at 1,931 whereas a fall through Tuesday’s 1,854 low may lead to the mid-November high, the 200-day simple moving average (SMA), and the November-to-December uptrend line at 1,833 to 1,817 being revisited. Russell 2000 Daily Chart https://www.dailyfx.com/news/ftse-100-resumes-ascent-dax-40-hits-record-high-and-russell-2000-nears-three-month-highs-20231206.html

2023-12-06 10:16

USD/JPY News and Analysis BoJ deputy governor Himino highlights benefits of ending ultra-loose monetary policy USD/JPY consolidates ahead of Friday’s NFP print Major risk events: US services PMI and NFP data, Japan GDP Q3 (final) The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library BoJ Officials Downplay Imminent Decisions around Policy Pivot Recent comments from Bank of Japan (BoJ) officials have highlighted the uncertainty around when the BoJ will be in a position to withdraw from decades of ultra-loose monetary policy despite inflation breaching the 2% target for over a year now. BoJ deputy governor Himino earlier expressed that stepping away from negative interest rates will be beneficial for households as well as firms. BoJ officials have generally expressed positive sentiment around an eventual shift in policy, something that continues to support the yen. BoJ Governor Kazuo Ueda has mentioned before that it is crucial for determinants of inflation to transition from supply side shocks to more demand driven effects. Two key areas in focus are inflation breaching the 2% target in a stable and consistent manner, as well as sufficient wage growth. Wage negotiations are set to get underway early next year after 2023 revealed the fastest salary growth in years. A broad look at the Japanese yen via the equal-weighted average of selected currencies below reveals a resurgent yen that is slightly lower today. Japanese Yen Index (GBP/JPY, USD/JPY, EUR/JPY, AUD/JPY) Source: TradingView, prepared by Richard Snow The eventuality of a policy pivot from the BoJ is supporting the yen which is also being helped by a weaker dollar as economic data softens and inflation improves. Markets are increasingly pricing in rate cuts in the US which is lowering borrowing costs and overall financial conditions in the US. US yields are declining at a faster pace than in Japan, providing relative support for the yen. US and Japan 10-Year Government Bond Spread Source: TradingView, prepared by Richard Snow USD/JPY Consolidates Ahead of Major US Jobs Data In the month of October, US Nonfarm Payrolls (NFP) hinted at a potential easing in the job market, as a lower 150k new jobs were added. NFP numbers have generally been in decline but remain above zero – underscoring resilience in the labour market. NFP, CPI, growth and sentiment data have all turned lower in recent weeks, weighing on the dollar but a 180k estimate for November might pose a challenge to further USD selling heading into the weekend, although, keep an eye on the unemployment figure estimated to remain unchanged at 3.9% but could weigh on the dollar if the print surprises to the upside and tags the 4% mark. 146.50 is the current level of support where price action appears content to trade around in anticipation of the next catalyst. Since this week is heavily focused on US jobs keep an eye on ADP private payrolls data today after the JOLTs report registered fewer job openings than expected in November. In the event of a bearish continuation, 145 flat is the next level of support. Upside markets appear at the blue 50-day simple moving average and the 150 mark. USD/JPY Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/yen-price-update-officials-mum-on-policy-overhaul-usd-jpy-consolidates-20231206.html

2023-12-06 07:43

EUR/USD ANALYSIS Sharp repricing on ECB rate forecasts keep euro on offer. Euro area retail sales and US jobs data under the spotlight later today. EUR/USD vulnerable to further downside. EURO FUNDAMENTAL BACKDROP The euro has opened flat this morning after a slew of daily closes in the red. Weak economic data from the euro area including yesterday’s composite and services PMI’s that remain in contractionary territory as well as increasingly negative economic growth over the next 12 months (European Central Bank (ECB) survey). Adding to EUR downside was the fact that US ISM services PMI’s surprised to the upside although JOLTs openings did miss to the downside reaching its lowest level for 2023. ECB officials have been become increasingly dovish of recent and this reflects in money market pricing of the ECB’s rate path (refer to table below): ECB INTEREST RATE PROBABILITIES Source: Refinitiv Markets see the first round of rate cuts around March 2024 and could really weigh negatively on the euro should we continue to see weak euro area economic data. The significant repricing occurred after the ECB’s Schnabel (known hawk) stated that “INFLATION DEVELOPMENTS ARE ENCOURAGING AND THE FALL IN CORE PRICES IS REMARKABLE.” Later today, eurozone retail sales will come into focus while the main volatility driver is likely to stem from ADP employment change ahead of Friday’s Non-Farm Payrolls (NFP). The ECB’s Nagel is also scheduled to speak and will give some additional insight into the ECB’s thinking. TECHNICAL ANALYSIS EUR/USD DAILY CHART Chart prepared by Warren Venketas, IG The daily EUR/USD chart above has the pair below both the 200-day moving average (blue) and the 1.0800 psychological handle. The Relative Strength Index (RSI) now suggests a preference towards bearish momentum which brings into consideration the 50-day moving average (yellow), 1.0700 and trendline support (black). Resistance levels: 1.1000 1.0900 200-day MA 1.0800 Support levels: 1.0700/50-day MA/Trendline support IG CLIENT SENTIMENT DATA: BEARISH IGCS shows retail traders are currently neither NET LONG on EUR/USD, with 55% of traders currently holding long positions (as of this writing). https://www.dailyfx.com/news/forex-euro-price-forecast-eur-threatened-by-dovish-ecb-bleak-forecasts-wv-20231206.html

2023-12-05 23:20

NASDAQ 100, GOLD PRICES (XAU/USD) FORECAST: The Nasdaq 100 rose modestly on Tuesday, supported by falling U.S. Treasury yields Despite the pullback in rates, gold prices trended slightly lower during the trading session Attention will be on the U.S. nonfarm payrolls later in the week Most Read: US Dollar Setups - USD/JPY Gains as GBP/USD Trends Lower, AUD/USD Hammered The Nasdaq 100 rebounded modestly on Tuesday following a subdued performance at the start of the week, supported by a significant drop in U.S. Treasury yields in the wake of unfavorable economic data. When it was all said and done, the equity index climbed 0.25%, settling above the 15,900 mark and approaching its 2023 highs. To provide background information, bond rates fell across the board after October's U.S. job openings figures, reported in the JOLTS survey, surprised to the downside by a wide margin. The disappointing results raised fears that the once indestructible labor market is beginning to crumble under the weight of aggressive monetary policy, which, in turn, boosted Fed easing wagers for 2024. US JOLTS DATA Although the pullback in yields benefited the tech index, gold struggled to leverage the situation, with prices falling for the second day in a row. While the precious metal maintains a constructive outlook, bulls are not yet ready to re-engage long positions after getting caught on the wrong side of the trade on Monday when the Asian session’s breakout quickly transformed into a large sell-off. Looking ahead, we may see measured moves in gold and the Nasdaq 100 over the next couple of days as investors avoid making large directional bets ahead of the release of the November U.S. employment numbers on Friday. The upcoming jobs report will provide valuable insight into the health of the economy and, therefore, may help guide the Fed's next steps. 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! NASDAQ 100 TECHNICAL ANALYSIS The Nasdaq 100 dropped sharply on Monday but selling pressure abated when the tech index failed to break below support at 15,700. From those levels, prices have mounted a moderate rebound, consolidating above the 15,900 mark. If gains accelerate in the coming days, resistance is visible in the 16,080 to 16,200 band. On continued strength, the focus shifts to the all-time high near 16,800. Conversely, if sentiment swings back in favor of sellers and prices head south, the first important floor to watch is located around 15,700. Although this region might provide stability on a retracement, a breakdown could set the stage for a drop toward trendline support at 15,500. Moving lower, the next downside target would be the 100-day simple moving average. NASDAQ 100 TECHNICAL CHART Nasdaq 100 Chart Created Using TradingView Eager to gain insights into gold's future path? Discover the answers in our complimentary quarterly trading guide. Request a copy now! GOLD PRICES TECHNICAL ANALYSIS Gold (XAU/USD) surpassed its previous record and briefly hit a fresh all-time high on Monday, but was quickly slammed lower, signaling that the long-awaited bullish breakout was nothing more than a fakeout. Although the bulls may have thrown in the towel for now, bullion retains a constructive technical outlook. This means that the path of least resistance remains to the upside. That said, if the precious metal resumes its advance, the first barrier to watch looms at $2,050, and $2,070/$2,075 thereafter. Beyond this zone, attention turns to $2,150. On the flip side, if losses intensify in the near term, initial support is positioned around $2,010. This area could act as a floor in case of additional losses, but a drop below it may be a signal that a deeper pullback is in gestation, with the next downside target situated near $1,990. GOLD PRICE TECHNICAL CHART Gold Price Chart Created Using TradingView https://www.dailyfx.com/news/nasdaq-100-up-after-support-rejection-gold-down-despite-collapse-in-us-yields-20231205.html

2023-12-05 17:45

US DOLLAR FORECAST – USD/JPY, GBP/USD, AUD/USD The U.S. dollar extends its advance despite the pullback in U.S. Treasury yields Attention will be on the November U.S. employment report later this week This article focuses on the technical outlook for USD/JPY, GBP/USD and AUD/USD, taking into account recent price action as well as prevailing market sentiment Most Read: Euro (EUR) Latest - Dovish ECB Commentary Weighs on EUR/USD, Yields Slump The U.S. dollar, as measured by the DXY index, was a tad firmer on Tuesday, up about 0.3% to 103.95, despite the pullback in U.S. Treasury yields following disappointing JOLTS data, which revealed a much lower number of job openings in October than anticipated. While bulls may be encouraged by the greenback's rebound since late November, the move may be driven by technical factors rather than changing underlying dynamics; after all, fundamentals have deteriorated somewhat of late, with the U.S. economy showing more signs of slowing down materially this quarter. We’ll get more clues about the broader outlook and health of the economy on Friday when the U.S. Bureau of Labor Statistics releases its latest nonfarm payrolls report. In terms of estimates, U.S. employers are forecast to have added 170,000 jobs last month, after hiring 150,000 workers in October. Weak employment growth is likely to increase rate-cut bets, paving the way for the U.S. dollar to resume its downward correction. Conversely, strong job creation may have the opposite effect on markets, prompting traders to unwind excessive monetary easing wagers. This could reinforce the U.S. currency’s recovery. In this article, we’ll focus on the technical outlook for USD/JPY, GBP/USD and AUD/USD, analyzing critical price levels that could come into play in the coming trading sessions. USD/JPY TECHNICAL ANALYSIS USD/JPY sank and closed below its 100-day moving average last Friday. However, the downward momentum faded this week when prices were unable to breach the lower limit of a rising channel in play since March. Rejection of support sparked a modest rebound, with the exchange rate consolidating above the 147.00 handle over the past two days. If gains accelerate in the coming trading sessions, resistance can be spotted in the 147.15/147.00 range. Successfully piloting above this technical barrier can open the door for a rally towards 149.70. On continued strength, the focus shifts to the psychological 152.00 region. On the other hand, if sellers return and trigger a bearish reversal, the first floor to monitor extends from 146.30 to 146.00, but further losses may be in store on a push below this area, with the next downside target situated at 144.50, followed by 144.00. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView For a comprehensive assessment of the British pound’s medium-term outlook, make sure to request a copy of the quarterly forecast! GBP/USD TECHNICAL ANALYSIS GBP/USD fell on Tuesday, extending its drop for a second consecutive day after failing to clear a key ceiling near 1.2720, which corresponds to the 61.8% Fibonacci retracement of the July/October slump. Should losses deepen this week, it is important to watch how prices behave around the 1.2590-1.2570 support zone, bearing in mind that a breakdown could expose the 200-day simple moving average. Conversely, if cable manages to rebound from current levels, technical resistance is positioned at 1.2720. Cementing the underlying bullish outlook requires the pair to take out this hurdle on daily closing prices, with a decisive breakout likely to draw fresh buyers into the market and foster conditions conducive to a rally above 1.2800. GBP/USD TECHNICAL CHART GBP/USD Chart Created Using TradingView AUD/USD TECHNICAL ANALYSIS AUD/USD extended its pullback on Tuesday, falling for the second straight day and slipping below its 200-day SMA, a bearish technical signal. If the pair is unable to reclaim this moving average over the course of the next few trading sessions, sentiment could deteriorate sharply, setting the stage for a drop towards 0.6525. On further weakness, attention transitions to 0.6460. On the flip side, if the bulls regain the upper hand and propel the exchange rate above its 200-day simple moving average, upward impetus could pick up steam, paving the way for a possible retest of trendline resistance near 0.6665. Pushing past this technical barrier will be difficult, yet a breakout could signal a potential move towards the 0.6800 handle. AUD/USD TECHNICAL CHART AUD/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-setups-usd-jpy-gains-as-gbp-usd-trends-lower-aud-usd-hammered-20231205.html