2023-12-05 15:21

US ISM SERVICES KEY POINTS: ISM Services PMI (Nov) Actual Vs Forecast 52. S&P Global Composite PMI Final (Nov) Actual Vs Previous 50.7. S&P Global Services PMI (Nov) Actual Vs Forecast 50.8. JOLTs Job Openings Plunge to 30-Month Lows. To Learn More About Price Action, Chart Patterns and Moving Averages, Check out the DailyFX Education Section. US ISM services PMI remained robust in November, topping estimates coming in at 52.7 in November 2023 from 51.8 in October. Activity in the services sector has now expanded for the 11th consecutive month following todays print. The services sector had a slight uptick in growth in November, attributed to the increase in business activity and slight employment growth. Source: ISM At the same time, new orders remained strong (55.5, the same as in the previous month) and inventories rebounded (55.4 vs 49.5) while price pressures slowed slightly (58.3 vs 58.6). Also, backlog of orders reversed (49.1 vs 50.9) and the Supplier Deliveries Index increased (49.6 vs 47.5), indicating that supplier delivery performance was faster. Respondents’ comments vary by both company and industry. There is continuing concern about inflation, interest rates and geopolitical events. Rising labor costs and labor constraints remain employment-related challenges. JOLTs JOB OPENINGS PLUNGES TO 30-MONTH LOWS The number of job openings decreased to 8.7 million on the last business day of October, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations changed little at 5.9 million and 5.6 million, respectively. On the last business day of October, the number of job openings decreased to 8.7 million (-617,000). The job openings rate, at 5.3 percent, decreased by 0.3 percentage point over the month and 1.1 points over the year. During the month, job openings decreased in health care and social assistance (-236,000), finance and insurance (-168,000), and real estate and rental and leasing with the only increase coming from the information sector. THE US ECONOMY AND DOLLAR OUTLOOK Another batch of key data out of the way ahead of the FOMC Meeting with the NFP report still due on Friday. The Dollar for its part has continued its upward trajectory in light of renewed safe haven demand and tapering of rate cut bets. The continuous repricing of the Fed rate cut expectations for 2024 continues to rumble on with a slight tapering this week not being inspired by any particular data releases. This may be in line with the mixed comments and messages we continue to get from Fed policymakers many of whom are happy with the progress but believe market participants are getting ahead of themselves on the rate cut front. The ISM Services is not ideal for the Fed as it has been cited as one of the sticky areas in relation to inflation. However, another drop-off in the Jols job openings number may overshadow the ISM data as we do have the NFP on Friday. This week's jobs data could see more of the same with wild swings in expectations until Fed Chair Powell takes the podium at the FOMC meeting. MARKET REACTION Dollar Index (DXY) Daily Chart Source: TradingView, prepared by Zain Vawda The Initial reaction to the data saw a sharp selloff in the DXY but since then we have seen abit of a recovery. The DXY retested the 200-day MA before bouncing and may have a challenge piercing through the MA and support resting just below at the 103.50 mark. I expect DXY downside to remain limited ahead of the NFP report on Friday, however we could be in for a slight pullback ahead of the report as traders may eye some profit taking following the early week USD gains. Key Levels to Keep an Eye On: Support levels: 103.56 103.30 102.50 Resistance levels: 104.00 104.28 105.00 https://www.dailyfx.com/news/ism-services-tops-estimates-job-openings-plunge-weighing-on-the-us-dollar-20231205.html

2023-12-05 13:36

Brent Crude Oil News and Analysis Oil unable to arrest the decline despite imminent SPR purchases Saudi Arabia issues support for additional supply cuts and a slow withdrawal of the policy to keep prices stabilized The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Oil Unable to Arrest the Decline Despite Imminent SPR Purchases The US Department of Energy has stepped up efforts to refill its stockpile after a record withdrawal last year to control inflation. The DoE is now due to receive 4 million barrels back into its reserves by February instead of the summer and appears to show a new urgency to take advantage of lower oil prices. The chart below shows the slight uptick in SPR stocks after the US added 300,000 barrels in the second last week of November. Source: EIA, prepared by Richard Snow In addition, Saudi Arabia has welcomed the subsequent voluntary cuts and clarified that the withdrawal of any cuts will happen at a managed pace. Oil Technical Levels of Consideration Oil now tests the lesser observed 50% Fibonacci retracement at $77 after the three day sell-off which is currently on track for a fourth. Oil markets have remained bearish despite the announcement of the supply cuts with markets unconvinced that the cabal is unified. Some African nations had raised objections to lower production quotas delaying the date of the original meeting and it would appear that there are still dissenting nations after the decision. There is little standing in the way of a move towards $71.50 – a prior level of support that halted price declines. The RSI will be crucial to observe over the coming days as it nears oversold conditions. The global growth slowdown is also not helping matters as market participants factor in lower future oil demand. Furthermore, the US has achieved record levels of production for a second month in a row, adding to global oil supplies which counteracts the latest OPEC move to cut production further. Brent Crude Oil Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/oil-struggles-to-reverse-course-as-us-production-hits-record-levels-20231205.html

2023-12-05 11:57

EUR/USD Forecast - Prices, Charts, and Analysis ECB’s Isabel Schnabel – ‘inflation developments have been encouraging’. The single currency remains under pressure as rate-cut expectations grow. Learn How to Trade EUR/USD with our Complimentary Guide Most Read: Euro (EUR) Forecast: EUR/USD, EUR/GBP Crumble as Rate Cut Talk Gets Louder In a recent interview with Reuters, Isabel Schnabel, a member of the executive board of the ECB, said that the central bank’s monetary policy is working and that they remain on track to get inflation back to target (2%). What is notable is that before today’s dovish interview, Ms. Schnabel has been a known hawk, giving her strong backing when the ECB was hiking interest rates. The interview started on a telling note. When Ms. Schnabel was asked if she was surprised by the recent benign inflation reading, she quoted Keynes saying’ ‘When the facts change, I change my mind, what do you do sir?’ During the interview, Ms. Schnabel added that ‘inflation developments have been encouraging’, the recent inflation number has made a ‘further rate increase rather unlikely’, and that underlying inflation is now ‘falling more quickly than we had expected’. Euro Zone annual inflation fell to 2.4% in November, below market forecasts and sharply lower than October’s reading of 2.9% Financial markets took note of Ms. Schnabel’s comments and priced in deeper rate cuts in 2024. The latest market forecast is for over 140 basis points of rate cuts next year with the first 25bp cut seen at the March ECB meeting. German government bond yields – the ECB proxy – continue their recent sell-off this morning, making a fresh multi-month low. The yield on the rate-sensitive 2-year touched 2.60%, a level last seen in mid-May and around 80 basis points lower than the early July high. German 2-Year Schatz Yield An increasingly dovish outlook and lower government bond yields have left the Euro struggling against a range of currencies. The Euro has fallen for seven days in a row against the Japanese Yen, another currency with a dovish background, while EUR/GBP has fallen by around two big figures in the last two weeks. EUR/USD is also moving lower, despite growing rate cut expectations in the US. The pair currently trade a fraction above the 200-day simple moving average and a break below would see EUR/USD trading with a 1.07 handle. Support is seen at 1.0787 before 1.0750 comes into view. EUR/USD Daily Chart All Charts via TradingView IG Retail trader data 50.01% of traders are net-long with the ratio of traders long to short at 1.00 to 1.The number of traders net-long is 5.19% higher than yesterday and 24.92% higher than last week, while the number of traders net-short is 1.77% higher than yesterday and 25.16% lower than last week. What is your view on the EURO – 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/euro-eur-latest-dovish-ecb-commentary-weighs-on-eur-usd-yields-slump-20231205.html

2023-12-05 10:00

Article by IG Chief Market Analyst Chris Beauchamp Dow Jones, Nasdaq, Hang Seng - Analysis and Charts Dow consolidates after surge Last week saw the index surge to its highest level since January 2022.A 12% gain in the space of a month does arguably leave the index looking vulnerable in the short-term, though for the moment there is little sign of any pullback. A close back below 35,700 might indicate some fresh short-term weakness was developing. Additional gains cannot be ruled out, and the next level to watch is 36,560, and then to the record high at 36,954. Dow Jones Daily Chart Nasdaq 100 at three-week low The index briefly hit a three-week low on Monday, continuing to edge back from the recent highs. Further gains seem to have been halted for the time being, and it would need a close back above 16,000 to indicate that a new leg higher had commenced. In the event of more losses, a drop towards the late August high of around 15,550 may find support. Nasdaq 100 Daily Chart Hang Seng hits a one-year low Unlike other indices, the Hang Seng has seen its gains from the October low slip away in November. Monday witnessed fresh losses that took the index to its lowest level in thirteen months. A move towards 15,890 now looks likely, with the price continuing to eat into the gains made since the end of October 2022. In the short-term, a close back above 16,800 might suggest a rebound towards the 50-day SMA has begun. Hang Seng Daily Chart https://www.dailyfx.com/news/dow-holds-gains-while-nasdaq-100-slips-lower-and-hang-seng-slumps-to-one-year-low-20231205.html

2023-12-05 08:30

Gold (XAU/USD) Analysis Bullish impetus reflects the positive outlook for gold into 2024 Gold volatility spikes but follow-through remains uncertain The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Bullish Impetus Reflects the Positive Outlook for Gold in 2024 The gold market attempted to catch its breath after a phenomenal day of trading yesterday. Registering a 5.42% round trip, the price of gold obliterated the prior swing all-time-high around $2081 only to retrace the move and end the day significantly lower. The RSI surged into overbought territory and has already recovered – highlighting the massive amount of volatility experienced yesterday. Today, however, trading has been more moderate, trading below the $2050 level but the uptrend remains well intact and well above the 200-day simple moving average (SMA). Gold bulls appear to be in the driving seat after US yields topped and markets continue to price in interest rate cuts in 2024. Lower interest rates typically deflate the value of the dollar which provides a relative discount for foreign (non-US domiciled) purchases of the dollar-based commodity. The safe-haven appeal also remains as Israel continued its aggression on Hamas targets after the ceasefire had come to an end. Support resides at $2010 with immediate resistance at $2050, followed by $2081.80. Gold Daily Chart Source: TradingView, prepared by Richard Snow The chart below pertains to expected 30-day gold volatility and shows just how much of a move we saw yesterday, sending the GVZ index massively higher. In the lead-up to yesterday, gold volatility has subsided as the initial impact of the Israel-Hamas war dragged on. Gold Volatility Index (GVZ) https://www.dailyfx.com/news/gold-price-update-xau-usd-calmer-after-massive-same-day-reversal-20231205.html

2023-12-05 06:04

AUD/USD ANALYSIS & TALKING POINTS RBA holds off on rate hike with 4.35% the possible peak. US ISM services PMI under the spotlight later today. AUD/USD bears testing 200-day MA. AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP The Australian dollar was subject to the Reserve Bank of Australia’s (RBA) interest rate decision earlier this morning where the central bank expectedly decided to keep rates on hold at 4.35%. A quick recap to the previous meeting saw the RBA hike rates as inflationary pressures, increasing housing prices and a tight labor market played a key role in the assessment. Since then, softening monthly CPI indicator data and the lagged influence restrictive monetary policy has weighed on housing prices alongside a slightly weaker labor market. Overall, the robust jobs market could be the most concerning variable for the RBA – similar to that of the US economy and the Federal Reserve. Money markets have added roughly 13bps (refer to table below) of additional cumulative rate cuts by December 2024 in a week but with room for an additional hike should it be required. I forecast the RBA to remain data dependent but we could well be at the peak of the cycle and may look to follow the path of other major central banks in 2024. With many banks looking to cut around mid-2024, the RBA outlook may be ‘dovishly’ repriced once again leaving the AUD vulnerable to the downside. RBA INTEREST RATE PROBABILITIES Source: Refinitiv Judo Bank PMI”s were released prior to the rate announcement and highlighted the slowing Australian economy by fading further into contractionary territory reaching yearly lows on both services and composite metrics. The current account for Q3 also moved into negative figures for the first time since Q3 of 2022, once again suggestive depressed growth. Later today, the AUD/USD pair will be firmly focused on US ISM services PMI’s and JOLTs data as markets prepare for Non-Farm Payrolls (NFP) on Friday. TECHNICAL ANALYSIS AUD/USD DAILY CHART Chart prepared by Warren Venketas, TradingView AUD/USD daily price action above shows bulls being limited by trendline resistance (black) coinciding with a push off the overbought one on the Relative Strength Index (RSI). Current support now comes from the 200-day moving average (blue) but could easily break below should ISM and JOLTs come in stronger. Remember, escalating tensions in the Middle East have also contributed to souring risk sentiment which could supplement USD upside. 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: BEARISH (AUD/USD) IGCS shows retail traders are currently net LONG on AUD/USD, with 61% of traders currently holding long positions. https://www.dailyfx.com/news/forex-aud-breaking-news-rba-holds-rates-aussie-dollar-slips-wv-20231205.html