Spreads
Spreads
Spreads
Spreads
Spreads
Last week, the market movement was mainly waiting for the fundamental data.
For this weekly movement, the market mainly focused on data, which may give more clear direction regarding the inflation and Fed rate decision.
(All data taken from MT4 VT Markets)
(Picture taken from forexfactory.com)
The financial markets will focus on the US CPI figures as they could impact the US Fed interest rate decision. The CPI data is expected to show a rise of 0.3% in November, which might depict another slowing inflation.
The UK Consumer Price Index is also expected to increase in November, with annual inflation to rise to 11.3%.
Meanwhile, the Swiss National Bank, the Bank of England, and the European Central Bank are scheduled to make their monetary policy decisions this week.
Here are key market events for the week ahead:
UK Gross Domestic Product | 12 December 2022
UK GDP contracted by 0.6% month-on-month in September of 2022, following a downwardly revised 0.1% decline in August.
Analysts expect that UK GDP to be higher by 0.4% in October.
US Consumer Price Index | 13 December 2022
The Consumer Price Index in the US increased 0.4% month-on-month in October, showing that the annual inflation rate in the US slowed for a 4th month to 7.7% in October, the lowest since January 2022.
Analysts expect November CPI to increase by 0.3%, which might show another slowing inflation to 7.6%.
UK Consumer Price Index | 14 December 2022
The yearly Consumer Price Index in the UK shows that the annual inflation rate jumped to 11.1% in October of 2022 from 10.1% in September.
Analysts expect that in November, UK yearly CPI will further increase, with annual inflation to rise to 11.3%.
Fed Interest Rate Decision | 15 December 2022
The Federal Reserve raised the fed funds rate by 75bps to 3.75%-4% in November, marking a sixth consecutive rate hike and the fourth straight three-quarter point increase.
According to Fed Chair Jerome Powell, the Fed may scale back the pace of its interest rate hikes already in December.
Analysts expect the Fed to raise the rate by 50bps for this month.
Australian Employment Change | 15 December 2022
The Australian employment reading increased by 32,200 to a fresh record high of 13.62 million in October, from a revised 3,800 fall a month earlier.
The unemployment rate unexpectedly went down to 3.4% in October.
Analysts forecast employment in November to rise by 25,000, and the unemployment rate to decline to 3.3%.
Swiss National Bank (SNB) Policy Rate | 15 December 2022
SNB increased its benchmark interest rate in September by 75bps to a positive rate of 0.50%. Analysts predict that SNB will increase the interest rate by another 50bps to 1% this December.
Bank of England Official Bank Rate | 15 December 2022
The Bank of England (BoE) voted 7-2 to raise interest rates by 75bps to 3% in November, the most significant rate hike since 1989.
Policymakers voiced concerns about inflation, which hit a 40-year high in September. Analysts expect the BoE to raise its interest rate by 50bps to 3.5%.
ECB Main Refinancing Rate | 15 December 2022
European Central Bank policymakers agreed that the central bank should continue normalising and tightening monetary policy to combat high inflation. Even during a shallow recession, the ECB raised its key interest rate by 75bps, the highest since early 2009.
Analysts forecast ECB to raise its interest rate by another 50bps for December.
US Retail Sales | 15 December 2022
US retail sales surged 1.3% month-on-month in October, the most robust increase in eight months after a flat reading in September.
For November, analysts expect US Retail Sales to be flat at 0.0% or even lower by 0.1%.
Eurozone, UK, and US Flash Services and Manufacturing PMI | 16 December 2022
The Flash Services PMI in France and Germany declined in November, while their manufacturing PMI increased.
Meanwhile, UK Flash Services and Manufacturing PMI are unchanged in November from the previous month, while US Flash Services PMI is lower than in October.
Analysts expect the Flash Services PMI in France and Germany to decline in December, while they forecast a rise in the UK and the US. Manufacturing PMI in the UK, France, and Germany is expected to fall.
Last week, gold moved higher and was able to reach our resistance level but was unable to break as expected. Gold closes the week at the same open price of $1,797.
On a weekly timeframe, we can see that the Stochastic Indicator shows a higher movement inside the overbought level. Gold price is moving above the 20, 50 and 200-period moving averages.
Our Weekly resistance levels are at $1,830 and $1,874, with the support levels at $1,763 and $1,721.
Meanwhile, in the daily timeframe, the Stochastic Indicator is crossing back higher in the middle to end the week stronger after a weak start. Price is still moving above the 20, 50 and 200-period moving averages.
Our Daily resistance levels are at $1,806 and $1,837, with the support levels at $1,736 and $1,696.
Conclusion: The market is waiting for this week’s inflation data and the Fed rate decision. We can expect high volatility from gold. The higher probability is that US inflation is lower, and the Fed will hike the interest rate only by 50bps. Gold might move higher to reach our weekly resistance level of $1,830.
Last week, EURUSD moved slightly higher to surpass our resistance level but could not reach it. EURUSD closed the week at 1.0534.
In our weekly timeframe, the Stochastic Indicator rises inside the overbought level. The price continues to trade below the 200-period moving average and above the 20-period moving average while just around the 50-period moving average.
Our Weekly resistance levels are at 1.0599 and 1.0780, with the support levels at 1.0360 and 1.0095.
In our daily timeframe, we can see that our stochastic indicator is moving in the middle with an unclear direction. Price is moving above the 20, 50 and 200-period moving averages.
Our Daily resistance levels are at 1.0614 and 1.0772, while the support levels are at 1.0486 and 1.0365.
Conclusion: Other than US inflation data and the Fed rate decision, which will be released this week, we can also expect market volatility from the ECB rate decision to know where the market is heading in 2023, as this will be the last meeting for the year. We can expect more movement from the EURUSD for this week. EURUSD might move higher and keep trying to reach our resistance levels at 1.0599 (Weekly) and 1.0614 (Daily).
Last week, DJ30 could not move higher as the market weighs inflation data ahead of the Fed meeting. DJ30 is moving lower to close the week around our daily and weekly first support level in 33485.
On the Weekly timeframe, we can see that the Stochastic Indicator is inside the overbought level and starting to cross. The price is now above all the 20, 50, and 200-period moving averages.
Our Weekly resistance levels are now at 34785 and 35627, with the support levels at 32922 and 32217.
In our daily timeframe, we can see that our stochastic indicator is moving lower, entering the oversold level. The price is moving above the 50 and 200-period moving averages but just below the 20-period moving average.
Our Daily resistance levels are now at 34796 and 35338, while the support levels are at 32500 and 31783.
Conclusion: The market is waiting for this week’s inflation data and the Fed rate decision. We can expect high volatility from DJ30. We expect that DJ30 will increase to reach our resistance levels at 34785 (weekly) and 34796 (daily).
Last week, we expected the USOUSD to move lower to reach our daily support, yet it broke our support level to reach our weekly lowest resistance from last week and closed the week at 71.66.
In the Weekly timeframe, we can see that the Stochastic Indicator is entering the oversold level. The price is moving below the 20 and 50-period moving averages and just around the 200-period moving average.
Our Weekly resistance levels are now at 75.92 and 82.43, with the support levels at 70.11 and 64.93.
In our daily timeframe, we can see that our stochastic indicator is moving inside the oversold level. Price moves below the 20, 50 and 200-period moving average.
Our Daily resistance levels are at 76.31 and 79.83, while the support levels are at 69.55 and 67.21.
Conclusion: With the market still weighing on the demand outlook with unclear China pandemic decision and recession fear, we expect that USOUSD can move lower to break our weekly support to move below the 70.00 price level.
Last week, NAS100 could not move higher as the market weighed inflation data ahead of the Fed meeting. NAS100 are moving lower to close the week around our weekly first support level in 11545.
In the Weekly timeframe, we can see that the Stochastic Indicator is moving higher near the overbought level. The price is still moving below the 20 and 50-period moving averages and moving around the 200- period moving averages.
Our Weekly resistance levels are at 12159 and 12714, with the support levels at 11057 and 10695.
Our daily timeframe shows that our stochastic indicator moves lower, entering the oversold level. Price is now moving below the 20, 50 and 200-period moving averages.
Our Daily resistance levels are at 12179 and 12575, while the support levels are at 11314 and 10902.
Conclusion: The market is waiting for this week’s inflation data and the Fed rate decision. We can expect high volatility from NAS100. We expected that NAS100 would move higher to reach our resistance levels at 12159 (weekly) and 12179 (daily).
Last week, we expected GBPUSD to move higher to reach our daily resistance level at 1.2324 and were able to do so. GBPUSD closes the week at 1.2262.
In the Weekly timeframe, we can see that the Stochastic Indicator is inside the overbought level and not showing any sign of crossing lower. The price moves above the 20-period moving average and 200-period moving averages but reaches around the 50-period moving average.
Our Weekly resistance levels are at 1.2644 and 1.2818, with the support levels at 1.2162 and 1.1867.
On the daily timeframe, we can see that our stochastic indicator is moving in the middle with no clear direction ending the week. Price is moving above the 20, 50 and 200-period moving averages.
Our Daily resistance levels are now at 1.2324 and 1.2407, while the support levels are at 1.2132 and 1.1953.
Conclusion: Other than US inflation data and the Fed rate decision, which will be released this week, we can also expect market volatility from the BoE rate decision to know where the market is heading in 2023, as this will be the last meeting for the year. We can expect more movement from the GBPUSD. We expect GBPUSD to move higher, at least to touch our daily resistance level at 1.2407.
Last week, USD Index was unable to move lower as expected and got boosted by a positive note from Fed members as they mentioned doing anything to cover inflation. USD Index moved higher and closed the week at 104.89.
On the Weekly Time Frame, we can see that the Stochastic Indicator is moving inside the oversold level. Price is moving below the 20-period moving average but still above the 50 and 200-period moving averages.
Our Weekly resistance levels are at 105.45 and 107.94, with the support levels at 103.64 and 101.62.
Meanwhile, on the daily timeframe, the Stochastic Indicator is moving in the middle with no clear direction. Price is now trading below the 20, 50 and 200-period moving averages.
Our Daily resistance levels are at 105.68 and 107.04, with the support levels at 103.91 and 103.14.
Conclusion: The market is waiting for this week’s inflation data and the Fed rate decision. We can expect high volatility from the USD. The higher probability that US inflation is lower, and Fed will hike the interest rate only by 50 bps. If this happens as forecasted, we can expect more volatility, and the USD Index may move lower to touch our support levels at 103.91 and 103.64.
Last week, we expected to see USDJPY move lower, but a stronger USD brought USDJPY a little bit higher, and USDJPY closed the week at 136.57.
On the Weekly timeframe, we can see that the Stochastic Indicator is moving inside the oversold level. While the price just moves below the 20-period moving average but remains above the 50 and 200-period moving averages.
Our Weekly resistance levels are 139.39 and 142.33, with the support levels at 133.39 and 130.80.
On the daily timeframe, the stochastic indicator is moving strongly higher. Price is moving below the 20 and 50-period moving averages and back above the 200-period moving average.
Our Daily resistance levels are 137.58 and 140.05, while the support levels are 132.53 and 130.84.
Conclusion: The market is waiting for this week’s inflation data and the Fed rate decision. We can expect high volatility from the USD. The higher probability is that US inflation is lower, and Fed will hike the interest rate only by 50 bps. We expected that USDJPY would move lower for this week and try to reach our support levels at 133.39 (weekly) and 132.53 (daily).
