Spreads
Spreads
Spreads
Spreads
Spreads
EURUSD (4-Hour Chart)
The EURUSD extends its rally above the 1.0500 level following the release of US annual PCE inflation data and the ISM Manufacturing PMI. The data from the US showed the annual Core PCE Price Index declined to 6% in October and the ISM Manufacturing PMI dropped to 49.0 compared to the previous 50.2, triggering a fresh leg of US dollar selloff. Moreover, the US Federal Reserve Chair Jerome Powell dropped the hawkish rhetoric on monetary policy at a private event. Powell acknowledged that moderating the pace of rate hikes is the path to take and may come as soon as December, as progress towards “sufficiently restrictive” police has already been made. The dovish speech undermined the US Dollar situation, which, in turn, provide support for the pair. In the eurozone, German Retail Sales fell by 2.8% MoM in October, much worse than anticipated. Additionally, S&P Global released the final version of its November Manufacturing PMIs, which were downwardly revised. The German index was confirmed at 46.2, while the Euro Area one came down to 47.1 from the previously estimated 47.3. Despite discouraging news for the EUR, the upbeat mood keeps the pair afloat.
From the technical perspective, the four-hour scale RSI indicator surged to 68 figures as of writing, suggesting that the pair was surrounded upbeat market mood. As for the Bollinger Bands, the euro was pricing along with the upper band, and the size between upper and lower bands became larger, which is a signal that the pair would persist in its positive traction in the near term.
Resistance: 1.0604, 1.0774
Support: 1.0315, 1.0228, 0.9961
GBPUSD (4-Hour Chart)
The GBPUSD has preserved its upside traction and was trading around the 1.2250 level as of writing, with the softer-than-expected PCE inflation data and the disappointing ISM Manufacturing PMI weighing heavily on the US Dollar, fueling the pair’s upside. The monthly Core PCE price index declined to 0.3% in October and the annual fell to 6%, compared to the previous of 0.5% and 6.3%. Moreover, the ISM Manufacturing PMI in November fell below the 50 figure to 49.0. The economic data released on Thursday showed easing inflation signs and weakening conditions in the Manufacturing sector, which triggered mounting speculation about less hawkish rate hikes, pushing the greenback further lower. Apart from this, after the FOMC Chairman, Jerome Powell, reaffirmed that smaller rate hikes could come as early as December, the CME FedWatch Tool’s probability of a 50 basis points rate hike at the next policy meeting jumped to 80% from 66%. Powell further added that they have made substantial progress toward a “sufficiently restrictive policy,” further weighing on the USD. The US Dollar index was trading at 104.8 at the moment of writing.
From the technical perspective, the four-hour scale RSI indicator jumped to 70 figured as of writing, which has entered into an overbought zone, suggesting that a corrective pullback could be expected in the near term. As for the Bollinger Bands, the pair was priced above the upper band, and the size between the upper and lower bands get larger, meaning the bullish momentum would persist in the near future.
Resistance: 1.2400, 1.2600
Support: 1.2154, 1.1927, 1.1765
XAUUSD (4-Hour Chart)
The XAUUSD jumped above a critical psychological level of $1800, the highest since early August. The precious metal benefited from an extended USD sell-off as US macroeconomic figures fueled Powell’s triggered slump. On Wednesday, the Dollar fell on the back of a dovish message from Fed’s Powell.
The US Dollar remained under pressure throughout all day, extending its losses during the US trading session. On the one hand, the Personal Consumption Expenditures (PCE) Price Index rose by 6% YoY in October, easing from 6.3% in the previous month. In addition, core PCE inflation came in at 5% in the same period, down from 5.2% in September. On the other, the ISM Manufacturing PMI fell to 49 in November, down from the previous 50.2, being the first time the indicator signals contraction since the early stages of the pandemic. The events reflect the high risk of an economic setback after the US central bank aggressively hiked rates to tame inflation. In fact, price pressures give signs of receding, although the risk of an economic downturn has increased.
From the technical perspective, the four-hour scale RSI indicator rose above 75 figures as of writing, suggesting that the pair was surrounded by strong upside momentum and the market mood. As for the Bollinger Bands, the pair was priced above and along with the upper band, and the gap between upper and lower bands became larger, signalling that the pair was more favoured to the upside path in the near future.
Resistance: 1785, 1800
Support: 1740, 1704, 1671
