EUR/USD Pair Started a Steady Recovery from 1.1260 Support

The Euro found support near the 1.1260 level against the US Dollar. The EUR/USD pair started a steady recovery wave above the 1.1280 and 1.1300 levels.

It is now moving higher above 1.1320 and the 50 hourly simple moving average. An immediate resistance near the 1.1325 level. There is also a key bearish trend line with resistance near 1.1335 on the hourly chart.

The next major resistance is near the 1.1350 level. A break above the 1.1335 and 1.1350 resistance levels could lead the pair towards the 1.1388 zone, above which the pair could even break the 1.1400 level.

On the downside, an initial support is near the 1.1310 level. The key support is near 1.1300, below which there is a risk of a move towards 1.1280 on FXOpen. The next major support is near the 1.1260 level.

December 24, 2021 at 10:32PM
FXOpen
https://ift.tt/32uGpC0

WTI Oil Futures Meet December’s Bar; Bullish Bias Still in Play

WTI oil futures (February delivery) paused their two-day advance near December’s resistance zone of 73.10. Although some consolidation is likely around that ceiling, the bulls could soon recharge their batteries according to the momentum indicators.

The RSI has breached its previous highs, stretching its uptrend slightly above the 50 neutral mark. The MACD continues to gain ground above its red signal line, while the rising Stochastics have yet to reach their 80 overbought level, all reflecting improving sentiment in the market.

Should the 73.10 bar give way, with the price closing clearly above the 50% Fibonacci of the 61.27 – 85.39 upleg too, the bullish action could pick up steam towards the 38.2% Fibonacci of 76.37. A tentative descending trendline drawn from the seven-year high of 85.39 could add some downside pressures around the same region. However, if it fails to act, the way will clear towards the 23.6% Fibonacci of 79.82.

On the downside, the 61.8% Fibonacci of 69.28 will be on guard for any bearish corrections along with the short-term tentative ascending trendline. A violation at this point could trigger a steeper decline towards the three-month low of 62.25 unless the 66.25 support area manages to calm selling pressures earlier.

Meanwhile in the medium-term picture, the neutral status remains intact as long as the price trades between 61.77 and 85.39.

In brief, despite today’ stabilization, WTI oil futures probably have more bullish fuel in their tank, with the confirmation likely coming above 73.10.

December 24, 2021 at 02:59AM
XM.com
https://ift.tt/32kSUQU

EURJPY’s Ascent Slows, and Neutral Tone Strengthens

EURJPY is struggling to extend its latest rally, which began around 127.50, beyond the December 16 high of 129.63. The converging simple moving averages (SMAs) are hinting that a more neutral price development may evolve confined now between a lower limit of 127.30-127.50 and an upper limit of 129.53.

The horizontal blue Kijun-sen line and the stalling in the ascent of the red Tenkan-sen line are together signalling feeble upside pressures, while the short-term oscillators are reflecting that buyers are losing command. The MACD, in the positive region, is fading above its red trigger line, while the RSI is dipping in bullish territory. The stochastic oscillator has turned bearish promoting the surge in negative price action.

If selling interest increases, an initial zone from the 129.08 low until the 200-period SMA at 128.93 could prevent the negative trajectory from gaining pace. However, if the price moves lower, a reinforced support area from 128.57 until the 100-period SMA at 128.32 may draw traders’ attention. If sellers manage to steer the pair below this obstacle too, the 128.00 handle could come into focus before sellers target the 127.30-127.50 support boundary.

Alternatively, if bullish forces return, the intraday high of 129.53 could delay the test of the 129.63 high, acting as the fresh ceiling of a near four-week trading range. Conquering this key barrier, the bulls may then challenge the 129.97-130.22 resistance border before eyeing the November 15 high of 130.60.

Summarizing, EURJPY’s bullish tone is diminishing and a price pullback beneath the 200-perod SMA would confirm this. Furthermore, a move like this would endorse an extension of the current trading range.

December 24, 2021 at 02:58AM
XM.com
https://ift.tt/3FqSkzt

What’s In Store For EUR/USD Into Yearend?

End of year markets can be extremely difficult to trade. EUR/USD is no exception. On one hand they can be extremely quiet as many big money funds have wrapped up trading for the year. Why risk losing profits as we head into the last two trading weeks of the year? These funds may have even been out of the market before the central bank meetings last week due to the uncertainty! However, on the other hand, there can also bursts of volatility due to the illiquid markets. If someone, such as a trader for a pension fund, needs to get a position on in a product, he or she can move the markets, as there may not be many traders on the opposite side of the trade. Therefore, when trading at year end, it is best to take a longer-term view of the markets. If traders use smaller positions and wider stops, they are less likely to get taken out by any volatility.

EUR/USD has been moving in a downward sloping channel since reaching May 26th. However, the pair posted a false breakdown at the bottom trendline of the channel in late November near the 61.8% Fibonacci retracement level from the low of March 2020 to the high of January 2021, at 1.1292. However, since bouncing back into the channel, EUR/USD has been moving sideways between 1.1222 and 1.1383.

On a 240-minute timeframe, EUR/USD is consolidating in a symmetrical triangle. This makes sense given the quiet nature of trading at this time of year. However, if there is a burst of volatility higher or lower, below are some important levels to watch for price to pause or reverse:

Resistance

• 1.1383/1.1395: This level horizontal resistance from the top of the triangle and the 50% retracement from the highs of November 9th to the lows of November 24th.
• 1.1420: 50 Day Moving Average (see daily)
• 1.1446: 61.8% Fibonacci retracement from the recently mentioned timeframe
• *1.1490/1.1500:Strong long-term resistance and psychological round number resistance (See daily)

Support

• 1.1182: November 24th lows
• *1.1145: long-term horizontal support dating back to March 2020 (see daily)
• *1.1020: long-term horizontal support dating back to May 2020 (see daily)

When trading at the end of year, best risk management practices should be to trade smaller size and have wider stops than at other times of the year. Trading EUR/USD is no exception. Watch for quiet price action with possible busts of volatility which could move the pair quickly to resistance or support!

December 23, 2021 at 04:21PM
Forex.com
https://ift.tt/3EkROle

Gold Eases Below 1,800 and Short-Term SMAs

Gold could not find enough buyers to overcome the 1,800 level during the previous sessions, with the spotlight shifting again towards the 1,784 support zone and the Ichimoku cloud.

The RSI and the MACD continue to flatten, while the former has also slipped back below its neutral threshold of 50, feeding pessimism that the bulls may gave up the battle.

An extension below 1,784 could activate a stronger bearish wave towards the 1,7661 level. Failure to hold above that floor could see a continuation towards the 1,745-1,750 restrictive region.

The 1,800 round number, could challenge any bullish attempts towards the 200-day SMA, which stands near the 1,809 barrier. Any breakout above this region may gather extra interest, with the price likely speeding up to 1,815. Yet, only a rally above 1,850 would violate the neutral trajectory and hence add credence to the bullish run.

In brief, despite the latest rebound off 1,750, dowside risks continue to linger in the background for gold. A break below 1,784 could trigger the next bearish round.

December 23, 2021 at 01:44AM
XM.com
https://ift.tt/3eedEMv

GOLD Respects Moving Averages

The price for gold passed the support of the 100-hour simple moving average near 1,790.00 on Tuesday afternoon. However, the price almost immediately found support in the 200-hour simple moving average, which kept the rate up until the middle of Wednesday. At mid-day on Wednesday, the price was approached by the resistance of the 50-hour SMA.

If the 50-hour SMA causes a decline, the price would need to pass the 200-hour simple moving average near 1,787.00, before aiming at the lower trend line of a channel down pattern near 1,775.00.

On the other hand, a recovery of the bullion would have to reach above the 50-hour SMA near 1,792.00. Afterwards, the upper trend line of the channel down pattern could act as resistance near 1,793.50. Close nearby, note the 100-hour simple moving average at 1,795.70.

December 23, 2021 at 12:20AM
Dukascopy Swiss FX Group
https://ift.tt/3Eo5KL4

USD/JPY Reaches New High Level

The USD/JPY succeeded at its second attempt to reach a new December high level. By the middle of Wednesday’s European trading hours, the rate had reached above the 114.30 level.

If the USD continues to gain against the Japanese Yen, the pair would have no technical resistance as high as the weekly R2 simple pivot point at 114.86. However, the pair needs to clearly pass the weekly R1 simple pivot point at 114.30.

A potential decline of the rate might look for support in the 114.00 mark and the zone at 113.88/113.95. Slightly below, take into account the 50, 100 and 200-hour simple moving averages and the weekly simple pivot point at 113.85/113.72.

December 23, 2021 at 12:05AM
Dukascopy Swiss FX Group
https://ift.tt/3srLTbz

GBP/USD Extends Its Surge

The GBP/USD currency exchange rate has continued to move higher. At mid-day on Wednesday, the rate left below it the hourly simple moving averages, the weekly simple pivot point and the high level resistance zone near 1.3280. By 12:00 GMT, the GBP had reached the 1.3320 mark against the USD.

A continuation of the surge of the Pound against the US Dollar could result in the rate reaching the weekly R1 simple pivot point at 1.3357 and the December high level at 1.3375.

Meanwhile, a decline of the pair might look for support in the previously passed technical levels. Namely, note the 50, 100 and 200-hour simple moving averages, the weekly simple pivot point and the previous high level zone. All of these levels and indicators are located in the 1.3240/1.3290 zone.

December 23, 2021 at 12:04AM
Dukascopy Swiss FX Group
https://ift.tt/3mq9dTe

EUR/USD Ignores Previous Levels

During late Tuesday hours and early Wednesday’s trading, the EUR/USD reached both below support and above resistance. The pair reached two times below the support of the weekly simple pivot point at 1.1276. At mid-day on Wednesday, the pair had recovered and moved above the 1.1302/1.1305 resistance zone.

In the case that the pair surges, it could reach for the resistance of the weekly R1 simple pivot point at 1.1329. Above the pivot point, note the December high level resistance zone near the 1.1360 level.

On the other hand, a potential decline of the Euro against the USD would need to pass the recent low levels and the 1.1260 mark, before aiming at the December low level zone at 1.1228/1.1236.

December 23, 2021 at 12:03AM
Dukascopy Swiss FX Group
https://ift.tt/3sqVFKZ

GBP/USD Outlook: Cable Rises For The Second Day Despite Downbeat UK GDP Data

Cable keeps bullish tone for the second straight day and hit weekly high above 1.33 mark, following minor negative impact from weaker than expected.

UK GDP and improved sentiment on expectations that Omicron may cause limited damage to the economy that revived risk appetite.

Fresh bulls eye pivotal barrier at 1.3337 (50% retracement of 1.3513/1.3161 bear-leg/Daily Kijun-sen), close above which would sideline larger bears and open way for a stronger correction.

Broken 20DMA offers solid support at 1.3266, with close above here required to keep near-term bias with bulls.

Rising 14-d momentum is breaking into positive territory and supporting the action.

Res: 1.3337, 1.3353, 1.3379, 1.3430.
Sup: 1.3266, 1.3240, 1.3197, 1.3164.

December 23, 2021
Windsor Brokers Ltd
https://ift.tt/3edAdks

US 500 Rebounds After Sharp Sell-Off, Bullish Bias Arises

The US 500 stock index (cash) is trying to stage a full rebound after its short-term downtrend ceased at the 4,530 level in the four-hour chart. Although the index has already recouped half of its recent losses, its upside move is meeting some resistance near the 50-period simple moving average (SMA).
The index’s recent recovery is likely to resume as the momentum indicators reinforce the positive near-term picture. Specifically, the MACD histogram is found well above its red signal line in the negative area, while the RSI has flatlined above its 50-neutral mark.

Should the bullish momentum intensify further, immediate resistance could be encountered at the recent high of 4,652, which overlaps with the 50-period simple moving average (SMA). Overcoming this barrier, the price might ascend towards the 4,674 region. Conquering this barricade, buyers could send the price to challenge 4,713 or higher to test the 4,732 obstacle.

On the flipside, bearish actions could meet initial support at the recent low of 4,630. Piercing through this level, the price may decline towards the 4,600 psychological mark. If that barrier fails as well, the spotlight might turn to 4,585 before 4,530 appears on the radar.

Overall, the US 500 index is on recovery mode and only a profound dip beneath 4,530 would alter its short-term outlook back to negative.

December 22, 2021 at 09:29PM
XM.com
https://ift.tt/32tfqqA

USD/JPY Pair Is Now Correcting Lower From The 114.20 High

The US Dollar started a fresh increase from the 113.10 zone against the Japanese Yen. The USD/JPY pair broke the key 113.40 resistance zone to move into a positive zone.

The pair even broke the 113.65 resistance and settled above the 50 hourly simple moving average. A high was formed near 114.20 and it is now correcting lower. An immediate resistance is near the 114.20 level.

The first major resistance is near the 114.40 level, above which the pair could rise steadily. The next major resistance is near the 114.80 level.

An initial support on the downside is near 114.00 on FXOpen. There is also a key bullish trend line forming with support near 113.85 on the hourly chart, below which USD/JPY might drop towards the 113.50 support zone. The next major support sits near the 113.20 level.

December 22, 2021 at 09:14PM
FXOpen
https://ift.tt/3yMVJGh

Risk Sentiment Flip-Flops, Canadian Dollar Shrugs Retail Sales

Dec 21 21, 13:47 GMT

Risk sentiment continues to flip-flop in pre-holiday markets. Major European indexes and US futures are trading slightly higher. Swiss Franc, Yen and Dollar are all trading generally lower, while Kiwi and Aussie are trading higher with Sterling. Canadian Dollar appears to be getting little support from better than expected retail sales data.

Technically, gold appears to be supported by 4 hour 55 EMA and recovers. It has yet recaptured 1800 handle yet. For now, further rise is in favor as long as 1781.99 minor support holds. Break of 1814.06 will target 1877.05 resistance. However, below 1781.99 will bring retest of 1752.32 support instead.

In Europe, at the time of writing, FTSE is up 0.99%. DAX is up 1.14%. CAC is up 1.06%. Germany 10-year yield is up 0.0462 at -0.320. Earlier in Asia, Nikkei rose 2.08%. Hong Kong HSI rose 1.0%. China Shanghai SSE rose 0.88%. Singapore Strait Times rose 0.39%. Japan 10-year JGB yield rose 0.0163 to 0.055.

Canada retail sales rose 1.6% mom in Oct, to rise further 1.2% in Nov

Canada retail sales rose 1.6% mom to CAD 57.6B in October, above expectation of 1.2% mom. Growth was led by higher sales at motor vehicle and parts dealers (+2.2%), as new car dealer sales (+2.8%) rebounded. Sales increased in 7 of 11 subsectors, representing 59.9% of retail trade. Core retail sales, excluding gasoline stations and motor vehicle and parts dealers, rose 1.5% mom.

According to advance estimate, retail sales rose 1.2% mom in November.

Germany Gfk consumer confidence dropped to -6.8, down on Omicron and prices

Germany Gfk consumer confidence for January dropped sharply from -1.8 to -6.8. In December, economic expectations dropped from 31.0 to 17.1, lowest since April. Income expectations dropped from 12.9 to 6.9. Propensity to buy dropped from 9.7 to 0.8.

Rolf Bürkl, GfK consumer expert said: “Consumer sentiment continues to be under a lot of pressure from two sides as the year draws to a close. High case numbers due to the fourth wave of the Corona pandemic with further restrictions, as well as significantly increased prices, are putting more and more pressure on consumer sentiment…. The outlook for the beginning of next year is also muted against the backdrop of the rapid spread of the Omicron variant.”

Also releaesd in Europaen session, Swiss trade surplus widened to CHF 6.16B in November, versus expectation of CHF 5.43B. UK public sector net borrowing rose to GBP 16.6B in November, versus expectation of GBP 12.0B.

Japan government: economy shows movements of picking up

In the latest Monthly Economic Report, Japan’s Cabinet Office upgraded economic assessment for the first time in 17 months. It said, “the Japanese economy shows movements of picking up recently as the severe situation due to the Novel Coronavirus is gradually easing.” Back in November, it said the economy “continues to show weakness in picking up”.

Private consumption is “picking up”, dropping “while some weakness remains”. However, business investments “appears to be pausing for picking up”. Exports are “almost flat”. Industrial production continues to appear to be “pausing for picking up”. Corporate profits are “picking up”. Employment situations shows “picking up in some components”, comparing to November’s “shows steady movement”. Consumer prices continues to “show steady movements.

RBA minutes laid three options on QE, patient on rates

In the minutes of December 21 meeting, RBA reiterated that decision about the bond purchases program will be made in February. The criteria to consider include “progress towards the Board’s goals for employment and inflation, the actions of other central banks and the functioning of the Australian bond market.” Information include December CPI, December and January labor market data, and overall impact of Omicron.

Three possible options were also discussed.

• The first option was to reduce the pace of purchases from mid February with an expectation of a likely end point in May 2022. This option is consistent with November forecasts for employment and inflation.
• The second option was to reduce the pace of purchases and review it again in May 2022. This option is stronger if progress was slower than expected.
• The third option was to cease purchases altogether in mid February. In case of better-than-expected progress, the third option would become more appropriate.

Regarding interest rate, “the Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range.” And, “this is likely to take some time and the Board is prepared to be patient.”

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 0.9188; (P) 0.9220; (R1) 0.9246; More ….

USD/CHF is still bounded in range trading above 0.9156 and intraday bias remains neutral. On the downside, below 0.9156 will target 0.9084 support. Firm break there should confirm that choppy rise from 0.8925 has completed, and suggests that fall from 0.9471 is resuming. Deeper decline would be seen through 0.8925. On the upside, break of 0.9293 will suggest that the pull back from 0.9372 is finished. Intraday bias will be turned back to the upside for 0.9372.

In the bigger picture, the corrective structure of the rebound from 0.8925 argues that fall from 0.9471 is not complete yet. It could either be the second leg of pattern from 0.8756 (2021 low), or resuming larger down trend from 1.0237 (2018 high). We’d pay attention to the downside momentum and assess the odds later. But for now, medium term outlook will be neutral at best as long as 0.9471 resistance holds.

Economic Indicators Update

GMT	Ccy	Events	Actual	Forecast	Previous	Revised
00:30	AUD	RBA Minutes
07:00	EUR	Germany Gfk Consumer Confidence Jan	-6.8	-2.5	-1.6	-1.8
07:00	CHF	Trade Balance (CHF) Nov	6.16B	5.43B	5.65B
07:00	GBP	Public Sector Net Borrowing (GBP) Nov	16.6B	12.0B	18.0B	11.6B
13:30	USD	Current Account (USD) Q3	-215B	-204B	-190B
13:30	CAD	Retail Sales M/M Oct	1.60%	1.20%	-0.60%
13:30	CAD	Retail Sales ex Autos M/M Oct	1.30%	0.80%	-0.20%
15:00	EUR	Eurozone Consumer Confidence Dec P	-8	-7

Featured Analysis

Load more

Learn Forex Trading

A Complete Guide to Fundamental Analysis in Forex

Jul 13 17, 16:56 GMT

What Currency Pair is the Most Difficult to Trade?

Jan 15 19, 09:32 GMT

Using Expert Advisors to Improve Your Trading

Jul 11 17, 11:20 GMT

Inside the Forex Market: Fake News, Currency Wars & Corruption

Jul 11 17, 03:07 GMT

Five Common Trading Mistakes and How to Overcome Them – Part...

Aug 01 17, 16:52 GMT

Some Considerations For Moving Stop-Losses

Dec 09 18, 13:04 GMT

December 22, 2021 at 01:47AM
ActionForex.com
https://ift.tt/3peX0Te

EUR/USD Finds Support In Pivot Point

Since mid-Monday, the EUR/USD has been fluctuating between the support of the weekly simple pivot point at 1.1276 and the resistance of the 1.1302/1.1305 zone.

In the case that the rate drops below the weekly simple pivot point at 1.1276, a potential decline would have no support as low as the December low level zone at 1.1228/1.1236.

However, if the Euro surges against the US Dollar, a move above the 1.1302/1.1305 zone could aim at the weekly R1 simple pivot point at 1.1329. Higher above, note the December high level zone below 1.1360.

December 21, 2021 at 11:31PM
Dukascopy Swiss FX Group
https://ift.tt/3efBEip

AUD/USD Recahes Below 0.7100

On Monday morning, the AUD/USD currency exchange rate reached below the 0.7100 level. However, after shortly trading below 0.7100, the rate recovered.

By the middle of the day’s trading, the pair had no resistance as high as the 0.7140 level, where a resistance zone was located at. Above the zone, the 50 and 200-hour simple moving averages and the weekly simple pivot point are located near 0.7150.

Meanwhile, a decline of the pair is most likely going to find support in the weekly S1 simple pivot point at 0.7070.

December 20, 2021 at 11:45PM
Dukascopy Swiss FX Group
https://ift.tt/3EkjpmE

EUR/JPY Reaches Low Level Zone

The EUR/JPY currency exchange rate has reached the December low level zone at 127.40/127.65. The zone provided enough support for a recovery to start. By the middle of Monday’s trading hours, the pair had reached the 128.00 mark.

If the rate continues to surge, resistance could be met at the 128.40 level, where the 50 and 200-hour simple moving averages, the weekly simple pivot point and a previous low level zone are located at. Higher above, the 129.00 mark might act as resistance.

On the other hand, a potential decline of the Euro against the Japanese Yen might once again look for support in the 127.40/127.65 zone, before reaching the weekly S1 simple pivot point at 127.18.

December 20, 2021 at 11:44PM
Dukascopy Swiss FX Group
https://ift.tt/32kDwDC

German Economy May Shrink This Quarter on Covid, Bundesbank Says

Forex 51 minutes ago (Dec 20, 2021 06:54AM ET)

© Reuters. German Economy May Shrink This Quarter on Covid, Bundesbank Says

(Bloomberg) -- Germany’s economy, Europe’s largest, may contract this quarter as resurgent coronavirus infections trigger fresh curbs and keep shoppers at home, according to the Bundesbank.

Activity in some service sectors is “significantly hampered,” the central bank said Monday in its monthly report. While the hit to sales should be smaller than a year ago as current restrictions are less severe and only cover a comparatively short period of time, a persistent squeeze on supplies is adding extra strains.

Business confidence slipped for a sixth month in December, with gauges for current conditions and expectations both worsening. The Bundesbank last week lowered its economic-growth forecasts for this year and next, warning of a winter setback.

It predicted a strong pickup in momentum in the spring with private spending to rise “substantially,” and sees supply bottlenecks being resolved by the end of 2022. At the same time, it raised its inflation outlook and urged the European Central Bank to be vigilant of upside risks.

On Monday, the Bundesbank said it expects annual consumer-price gains in Germany to remain above 4% over the coming months, citing a steep increase in natural gas prices that’s likely to reach consumers at the start of 2022.

German Economy May Shrink This Quarter on Covid, Bundesbank Says

Related Articles

Dollar Edges Higher; Hawkish Fed Helps, While Omicron Hurts Europe By Investing.com - Dec 20, 2021

By Peter Nurse Investing.com - The dollar rose in early European trade Monday, climbing close to its recent high, as the Federal Reserve pointed to early rate hikes while Europe...

Dollar Up As the Fed Signals An Earlier Interest Rate Hike By Investing.com - Dec 19, 2021

By Gina Lee Investing.com – The dollar was up on Monday morning in Asia the U.S. Federal Reserve signaled an earlier interest rate hike of March 2022, while Europe grapples with...

Hawkish Fed, Dovish PBOC Diverge in New Phase of Pandemic Policy By Bloomberg - Dec 19, 2021

(Bloomberg) -- The U.S. and China are set to spend 2022 diverging on monetary policy, marking a new phase in the struggle to deal with the fallout of the pandemic and setting up a...

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

December 20, 2021 at 11:54PM
Bloomberg
https://ift.tt/3FfKIQe

Dollar Stands Tall after A Week of Central Bank Surprises

Dec 18 21, 12:06 GMT

It was a very volatile week full of central bank surprises. Fed indicated that there would be as many as three rate hikes next year. BoE surprised by raising the Bank Rate. Even ECB turned out to be less dovish as expected. But in the end, if was the late selloff in the stock markets that finalized that over tone.

We would like to point out that in the background, there were still some worries over the fast spread of Omicron. Risk of return to tougher restrictions, prolonged supply bottlenecks and more persistent high inflation are realistically there. At the same time, major central banks are clearly turning more hawkish on inflation. Hence, the stock markets were indeed rather resilient in this context. Friday’s selloff was probably more because of “quadruple witching”. But we’ll have to see how it goes in January.

In the currency markets, Dollar ended as the strongest one, followed by Sterling and Yen. Canadian Dollar was the worst performer, followed by Kiwi and then Euro.

S&P 500 extending the corrective pattern from 4743.83

S&P 500 failed to break through 4743.83 high last week and has indeed closed lower. The development wasn’t a surprise, as we’re envisage that the corrective move from 4743.83 would be unfolded as a three wave pattern. Deeper fall is now mildly in favor for the near term to 4495.12 support.

The main question is whether the SPX is indeed correcting whole up trend from 3233.94. Firm break of 4495.12 would favor this case and bring deeper fall to 38.2% retracement of 3233.94 to 4743.83 at 4167.05 before completing the correction. But keeping 4495.12 intact would maintain the chance of extending the record run before forming a medium term top.

10-year yield’s near term outlook mixed

Outlook is 10-year yield is unchanged that it’s seen as being in the third leg of the corrective pattern from 1.765. Last week’s decline and prior rejection by 55 day EMA are both suggesting more downside for the near term. Yet, at the same time, TNX is also trying to draw support from 55 week EMA (now at 1.381). So, the near term outlook is relatively mixed.

On the upside, break of 1.537 resistance will argue that the fall from 1.693 is finished and bring stronger rebound. But firm break of 55 week EMA could open up deeper fall to 1.128 support. The next move in TNX will be a certain impact on USD/JPY.

Dollar index extending near term consolidation with bullish bias

Dollar index is still bounded in a sideway pattern after a few weeks of volatility. Near term outlook remains bullish with 95.51 support intact. Rise from 89.20 is still in favor to continue to 61.8% retracement of 102.99 to 89.20 at 97.72. However, break of 95.51 will open up the chance for deeper correction to 55 week EMA (now at 93.49) before bottoming.

Gold rebounded strongly but couldn’t stay above 1800

Gold staged impressive rebound to as high as 1814.06 last week. But it’s disappointing that it could close above 1800 handle. Further rise is mildly in favor for the near term as long as 1781.99 minor support holds. Break of 1814.06 will target 1877.05 resistance next. However, break of 1781.99 will argue that fall from 1877.05 is still not complete as another leg inside the larger sideway pattern from 1676.65. Deeper fall could be seen through 1752.32 to 1721.46 support and below. We’d continue to use gold to help confirm Dollar’s next move.

GBP/CAD eyeing 1.7111 resistance as bullish case builds up

GBP/CAD was among the top movers last week as rebounded from 1.6636 extended. The chance of near term bullish reversal is increasing considering bullish convergence condition in daily MACD. But this is not confirmed yet as GBP/CAD would still need to break through 1.7111 resistance decisively to confirm. If happens, such development would also argue that whole decline from 1.7884, as a falling leg inside the long term range pattern, has completed with three waves down to 1.6636. Further rise would be seen towards 1.7623 resistance next. However, rejection by 1.7111 will retain near term bearishness for another fall through 1.6636 at a later stage.

NZD/JPY ready to resume fall from 82.49 after brief recovery

Despite recovering further 77.96 last week, subsequent sharp fall in NZD/JPY suggests that near term outlook is staying bearish. Break of 76.43 minor support will argue that fall from 82.49 is ready to resume through 75.95. Such decline is seen as a correction to whole up trend from 59.49. Break of 75.95 will target 38.2% retracement of 59.49 to 82.49 at 73.70. Though, break above 77.96 will extend the recovery pattern from 75.95 first before staging another decline.

EUR/USD Weekly Outlook

EUR/USD stayed in consolidation between 1.1185/1382 last week and outlook is unchanged. Further decline will remain in favor as long as 1.1382 resistance holds. Break of 1.1185 will resume larger decline from 1.2348. Next target is 161.8% projection of 1.2265 to 1.1663 from 1.1908 at 1.0934. On the upside, firm break of 1.1382 resistance should confirm short term bottoming at 1.1186. Intraday bias will be turned back to the upside for 55 day EMA (now at 1.1432).

In the bigger picture, there are various ways of interpreting the fall from 1.2348 (2021 high). It could be a correction to rise from 1.0635 (2020 low), the fourth leg of a sideway pattern from 1.0339 (2017 low), or resuming long term down trend. In any case, outlook will now stay bearish as long as 1.1703 support turned resistance holds. Sustained break of 61.8% retracement of 1.0635 to 1.2348 at 1.1289 would pave the way back to 1.0635.

In the long term picture, EUR/USD has possibly failed 1.2555 cluster resistance (38.2% retracement of 1.6039 to 1.0339 at 1.2516) again. Long term outlook will remain neutral as sideway pattern from 1.0339 (2017 low) is extending with another medium term fall. For now, we’d hold back from assessing the chance of downside breakout, and monitor the momentum of the decline from 1.2348 first.

Featured Analysis

Load more

Learn Forex Trading

How to Write a Trading Plan

Aug 13 18, 14:28 GMT

Getting What You Really Want

Mar 13 19, 15:50 GMT

What is the Best Forex Day Trading System?

Sep 25 18, 09:32 GMT

Range Trading Explained

Jul 11 17, 17:17 GMT

Everything You Need To Know About The Bank Of England

Mar 16 21, 02:11 GMT

The First Rule of Forex Trading: FX Market Types

Aug 01 17, 17:07 GMT

December 19, 2021 at 12:06AM
ActionForex.com
https://ift.tt/3mgKwsh