Bearish Pressure Persists

Forex

Central Bank

Summary:

Despite finding some support following the Reserve Bank of Australia (RBA)'s meeting minutes indicating cooled expectations for near-term rate cuts, the Australian Dollar (AUD) faces ongoing pressure against the strengthening US Dollar (USD). While the RBA's cautious stance on inflation provides a floor for AUD, the prevailing trend of USD strength weighs heavily on the currency pair.

SELL AUDUSD

EXP

TRADING

0.65186

Entry Price

0.63800

0.65900

0.64968 -0.00135 -0.21%

0.0

Pips

Flat

0.63800

Exit Price

0.65186

Entry Price

0.65900

Fundamentals

On November 9th, the RBA released its meeting minutes, revealing continued vigilance over rising inflation. The central bank noted that core inflation remains elevated, projecting it will take until 2026 for underlying prices to reach the 2%-3% target range sustainably.

This suggests a reduced likelihood of rate cuts before inflation is adequately contained, tempering market anticipation for immediate easing measures, thereby lending some support to AUD.

However, the USD's ascending trajectory has become a dominant force. Market forecasts indicate that the incoming Trump administration could stoke inflationary pressures, potentially curtailing the Fed's path toward rate cuts, and further bolstering the USD's upward momentum. Consequently, downward pressure on AUD/USD persists.

Technical Analysis

Based on the monthly chart, AUD/USD remains beneath a downtrend. After approaching the trendline, the price action was met with renewed weakness, suggesting that the bearish trend may persist. This implies that AUD/USD might test lower levels again, potentially reaching fresh lows.

The daily chart illustrates AUD/USD's ongoing descent within a bearish channel, hinting at further declines. Coupled with the RSI below 50, this increases the probability of continued depreciation.

Presently, AUD/USD has retreated below the resistance level of 0.6550, signaling a resumption of the downtrend. The initial target could be the monthly support at 0.6350, suggesting a bearish bias. Therefore, selling at highs is recommended.

Trading Recommendations

Trading direction: Sell

Entry price: 0.6520

Target price: 0.6380

Stop loss: 0.6590

Validity Till: Dec 05, 2024 15:00:00

Support: 0.6484/0.6442/0.6348

Resistance: 0.6543/0.6570/0.6687

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Warren Takunda

Economic

Summary:

GBP/JPY faces increasing downward pressure, with technical indicators aligning to confirm a bearish trend.

SELL GBPJPY

Close Time

CLOSED

195.800

Entry Price

189.560

198.000

193.708 -0.840 -0.43%

167.7

Pips

Profit

189.560

194.123

Exit Price

195.800

Entry Price

198.000

The GBP/JPY currency pair is experiencing mounting selling pressure, with the daily chart revealing a bearish undertone. As of Thursday’s European session, the pair trades around 195.80, paring earlier gains and staying within a descending channel pattern that has defined its trajectory in recent sessions. This price action reflects a market still grappling with a broader downturn fueled by weakening technical indicators and a risk-averse sentiment.

A deep dive into the technical landscape paints a grim picture for GBP/JPY bulls. The nine-day Exponential Moving Average (EMA) remains firmly below the 14-day EMA, signaling persistent weakness in short-term momentum. This alignment underscores a market where bearish forces are maintaining control, leaving little room for optimism in the near term.

The Relative Strength Index (RSI), a critical momentum oscillator, hovers just below the neutral 50 mark. This subtle but crucial positioning further reinforces the pair’s bearish inclination, suggesting that sellers are likely to dominate unless a strong catalyst emerges.

Additionally, GBP/JPY has settled near the lower boundary of its descending channel at the 193.50 level. This zone serves as the immediate support and a critical juncture for price action. A decisive break below this support could accelerate losses, potentially dragging the pair toward the two-month low of 189.56, last seen on September 30.

On the upside, immediate resistance is evident at the nine-day EMA of 196.46, followed closely by the 14-day EMA at 196.63. These levels represent hurdles for any potential recovery attempts, as sellers are likely to defend these zones vigorously.

Should the pair manage to breach the upper boundary of the descending channel, located around 197.70, the bearish bias could be nullified, paving the way for a retest of the four-month high at 199.81, recorded on October 30. However, given the prevailing market dynamics, such a scenario seems increasingly improbable without a significant shift in sentiment.

The pair’s recent price behavior further substantiates the bearish outlook. GBP/JPY briefly tested the 197.78 resistance earlier this week but failed to sustain gains, retreating to its current levels. This inability to hold higher ground confirms the dominance of sellers, who have effectively capped upward momentum.

Adding to the bearish narrative, the pair is consolidating near the 55-day Moving Average (MA55), which acts as a dynamic resistance. Stochastic oscillators also indicate a downward bias, suggesting that fresh bearish momentum could drive the pair lower in the coming sessions.

The immediate focus is on the 193.50 mark, aligning with the lower boundary of the descending channel. A breach of this level could expose GBP/JPY to further declines, with 194.10 and 194.80 acting as interim targets. Beyond this, the two-month low at 189.56 becomes a realistic downside target.

On the flip side, resistance at 196.46 (nine-day EMA) and 196.63 (14-day EMA) serves as initial barriers. The upper boundary of the descending channel at 197.70 represents a more significant hurdle, and only a decisive breakout here could signal a shift in trend.

TRADE RECOMMENDATION

SELL GBPJPY

ENTRY PRICE: 195.80

STOP LOSS: 198.00

TAKE PROFIT: 189.56

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

Gold prices have risen for the fourth consecutive session, hitting a one-and-a-half-week high at $2,660.

BUY XAUUSD

EXP

TRADING

2665.00

Entry Price

2800.00

2560.00

2716.16 +46.71 +1.75%

0.0

Pips

Flat

2560.00

Exit Price

2665.00

Entry Price

2800.00

Gold prices (XAU/USD) have extended their rally into a fourth straight day, climbing to a one-and-a-half-week high near $2,660 during Thursday's European session. The yellow metal has garnered strength as escalating geopolitical tensions surrounding the Russia-Ukraine war drive investors toward safe-haven assets. Despite these gains, elevated U.S. bond yields and a resilient U.S. dollar are capping the upside for gold, reflecting a complex interplay of risk factors influencing market dynamics.

The Russia-Ukraine conflict remains a dominant force behind gold's bullish momentum. Recent developments, including Russian President Vladimir Putin's alarming shift in nuclear strike policies, have heightened global uncertainty. As geopolitical risks intensify, gold’s allure as a hedge against systemic risks grows, underscoring its role as a critical component of diversified portfolios during periods of heightened volatility.

On the other hand, the gold market is contending with significant headwinds. Elevated U.S. Treasury yields, which reflect investor expectations of tighter monetary conditions, continue to exert pressure. The benchmark 10-year U.S. Treasury yield surged on Wednesday, marking its largest weekly advance, as inflationary concerns take center stage.

Complicating matters further is the persistent strength of the U.S. dollar, supported by resilient economic data and hawkish undertones from Federal Reserve officials. Although the dollar experienced a modest pullback in the latest session, it remains near year-to-date highs, limiting gold's upside potential as a non-yielding asset.

The Federal Reserve's monetary policy outlook remains pivotal for gold’s trajectory. While a cautious tone from Fed officials suggests a pause in interest rate cuts, market participants remain divided. Recent comments from key policymakers such as Fed Governor Michelle Bowman and Boston Fed President Susan Collins highlight concerns over inflation’s persistent nature and the potential need for additional rate hikes.

According to the CME Group’s FedWatch Tool, traders are pricing in just over a 50% probability of a rate cut at the Fed’s December meeting. This uncertainty has kept market participants on edge, as any deviation from current expectations could trigger sharp moves in both the dollar and gold prices.

Technical Analysis

From a technical perspective, gold remains on solid footing, supported by its position above the 50-day Exponential Moving Average (EMA50). The precious metal successfully breached the $2,655 level, opening the door for further gains toward $2,800. However, a break below $2,620 could introduce downside risks, with initial targets at $2,560 and extended declines potentially reaching $2,513.

The immediate trading range is expected to lie between $2,640 as support and $2,675 as resistance. While the broader trend remains bullish, traders should exercise caution given the potential for volatility stemming from geopolitical and macroeconomic developments.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 2665

STOP LOSS: 2560

TAKE PROFIT: 2800

Risk Warnings and Disclaimers

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Winkelmann

Commodity

Summary:

The lingering shadow of weak global oil demand refuses to dissipate, and there is limited support from geopolitical tensions. Oil prices struggle to rise.

SELL BRENT

Close Time

CLOSED

72.673

Entry Price

69.000

74.500

74.527 +0.687 +0.93%

182.7

Pips

Loss

69.000

74.502

Exit Price

72.673

Entry Price

74.500

Fundamentals

Recently, with the U.S. election results settled and tensions in the Middle East significantly reduced, the crude oil market briefly returned to a downtrend. However, a series of escalating conflicts between Russia and Ukraine, coupled with Moscow's lowering of the threshold for the use of nuclear weapons, have heightened tensions again, providing additional support for crude oil prices.

Nevertheless, the crude oil market is still dominated by supply and demand fundamentals. The impact of short-term geopolitical tensions on oil prices is limited. With the resumption of production at Norway's Johan Sverdrup oilfield, concerns about supply disruptions due to geopolitical tensions have been offset. Furthermore, the latest increase in U.S. crude oil inventories by 4.75 million barrels indicates that demand for crude oil remains weak, echoing the recent downward revisions of global oil demand forecasts by major energy agencies and investment banks. Even if OPEC+ postpones production increases again, it is difficult to change the current oversupply situation in the crude oil market. The outlook for oil prices is worrisome.

Technical Analysis

Converging Trendlines Indicate Imminent Market Shift_1

In the daily chart, oil prices continue to hover in the lower region of the year, with lower highs and converging trendlines. A new market turning point is getting closer. Once the key support around 70.7 is effectively broken, oil prices may accelerate their decline, potentially reaching the 2021 low of around 65.0.

Converging Trendlines Indicate Imminent Market Shift_2

Looking at the 1-hour chart, BRENT maintains a volatile pattern, presenting an expanding megaphone shape. After touching the upper edge of the megaphone, oil prices have retraced. Due to the weak short-term rebound, bears may make a comeback.

Traders are advised to focus on shorting BRENT at higher levels and may consider placing short orders around 72.8 once the price stabilizes. Targets can be at around 69.0, with the stop-loss placed above 74.0.

Trading Recommendations

Trading Direction: Sell

Entry Price: 72.8

Target Price: 69.0

Stop Loss: 74.5

Support: 70.7/69.0

Resistance: 73.0/74.0

Risk Warnings and Disclaimers

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Eva Chen

Economic

Forex

Summary:

Due to the decline in gasoline prices being less than last month, Canada's annualized inflation rate accelerated in October, exceeding expectations and reaching 2.0%. This may reduce the likelihood of the Bank of Canada (BOC) implementing significant interest rate cuts again in December.

SELL USDCAD

EXP

PENDING

1.40800

Entry Price

1.38300

1.41790

1.39734 -0.00004 0.00%

Pips

PENDING

1.38300

Exit Price

1.40800

Entry Price

1.41790

Fundamentals

In October, inflation in Canada accelerated, with the overall CPI rising by 2.0% for the year, slightly above the anticipated 1.9% and higher than September's 1.6%. The primary driver was a slowdown in the decline of gasoline prices, which fell by 4.0% YoY, compared to a 10.7% drop in September. Excluding gasoline, the CPI for all categories increased by 2.2%, remaining consistent with August and September.

Commodity prices experienced a mild rebound, rising by 0.1% after a YoY decrease of 1.0% in September. The inflation rate for services decreased to 3.6%, marking the smallest increase since January 2022. On a monthly basis, the CPI rose by 0.4% MoM, reversing a similar downward trend observed in the previous month.

Core inflation indictors also exceeded expectations. The median CPI increased from 2.3% YoY to 2.5%, the adjusted CPI rose from 2.4% to 2.6%, and the average CPI climbed from 2.1% to 2.2%. All three figures surpassed general market expectations.

MARKET WATCH: Due to the historic rise in gasoline prices and property taxes, inflation in Canada accelerated in October, with the inflation rate rebounding to 2%. After seasonal adjustments, the inflation rate increased by 0.3% compared to the previous month; while this is not alarming, it certainly does not provide reassurance.

Considering other factors (such as the uptick in real estate activity, the depreciation of the Canadian dollar, and the uncertainty surrounding a potential interest rate cut by the Federal Reserve in December), this October report is likely to diminish calls for the BOC to implement a 50 basis point rate cut, shifting the focus towards a 25 basis point rate cut instead.

Furthermore, although the inflation rate has remained at or below the BOC's target level of 2% for three consecutive months and has stayed within the BOC's desired range of 1%-3% for ten months, policymakers will still need to consider employment and GDP data before the next policy meeting, as these data could significantly influence the anticipated magnitude of any rate cuts.

Technical Analysis

The USDCAD has recently demonstrated impressive performance, even garnering new buying interest last Friday, reaching a four-year high of 1.4105, which has sparked optimism regarding the onset of a new bull market cycle. However, given that both the Relative Strength Index and the Stochastic Oscillator are hovering in the overbought zone, some consolidation may occur, indicating that the current bull market may be overstretched.

Currently, the USDCAD has retraced from the four-year peak of 1.4105, and it is anticipated to rise again. A break above 1.4105 would restore a more significant upward trend, targeting a 61.8% retracement from 1.3841 to 1.3958 at 1.4175. However, a drop below 1.3958 would lead to prolonged consolidation and could potentially result in a further pullback to 1.3841.

Overall, after testing the four-year high of 1.4105, the USDCAD has experienced a pullback, and it is expected that any rebound will not surpass this level, potentially forming a double top pattern that could lead to further downside.

Trading Recommendations

Trading Direction: Sell

Entry Price: 1.4080

Target Price: 1.3830

Stop Loss: 1.4179

Deadline: December 5, 2024 23:55:00

Support: 1.3958, 1.3931, 1.3879

Resistance: 1.4037, 1.4075, 1.4105

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

The AUD/USD pair is trading at 0.64928, marking a slight recovery after a series of losses. Technical indicators combined with shifting market sentiment suggest a short-term buying opportunity, especially as the AUD receives support from expectations of improved economic data in the near term and a slowing USD...

BUY AUDUSD

Close Time

CLOSED

0.64919

Entry Price

0.65100

0.64700

0.64968 -0.00135 -0.21%

18.1

Pips

Profit

0.64700

0.65100

Exit Price

0.64919

Entry Price

0.65100

AUD/USD has had a mixed day as morning selling pressure eased in the US session. The AUD has been hit by recent weak Australian economic data, including weaker-than-expected employment figures and slowing consumer spending. However, with expectations that the Reserve Bank of Australia (RBA) may maintain a steady monetary policy rather than continue to raise interest rates, the AUD is slowly finding some traction.

The US dollar also showed signs of losing momentum after US Federal Reserve officials sent a dovish signal, reducing the possibility of further interest rate hikes in 2024. This increased the attractiveness of commodity currencies, including the AUD, in the short term.

Market psychology

Current market sentiment suggests increased expectations for a recovery in the AUD as investors gradually withdraw funds from the USD and shift to riskier currencies. A recent report from the CFTC (US Commodity Futures Trading Commission) showed that net short positions in the AUD have decreased slightly, suggesting that investors are reconsidering the short-term outlook for the currency.

Flows into risk assets also showed positive signs, with the Australian stock market rising slightly, reinforcing confidence in the economic recovery in the region.

Technical analysis

AUD/USD thể hiện tín hiệu mua ngắn hạn nổi bật trong bối cảnh đồng AUD có cơ hội phục hồi_1

Based on the M15 chart, technical signals indicate a short-term bullish trend:

Stochastic (5,3,3): This indicator has crossed above 20 from the oversold zone, currently at 52.68, reinforcing the buy signal as bullish momentum begins to build.

Bollinger Bands: Price has bounced off the lower band of the Bollinger Bands and is approaching the moving average, indicating a potential further increase.

Ichimoku Cloud: Price has started to break above the thin Kumo cloud, confirming a short-term recovery trend. Tenkan-Sen has also crossed above Kijun-Sen, which is a strong bullish signal.

If the price sustains above 0.64850, there is a high possibility of approaching the resistance level of 0.65100 in the coming sessions.

Trading Recommendations

Based on the analysis factors, the trading strategy for AUD/USD is BUY in the short term with the following parameters:

Entry: 0.64920, when price stays above the Bollinger Bands moving average.

Take Profit: 0.65100, near next resistance level.

Stop Loss: 0.64800, below the nearest support zone to minimize risk.

Risk Warnings and Disclaimers

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Eva Chen

Central Bank

Forex

Summary:

The GBPJPY rose on Wednesday, as data revealed that consumer inflation in the UK accelerated in October at a pace exceeding expectations. This supports the view that the Bank of England (BOE) may implement gradual interest rate cuts in the coming months. Technical indicators also suggest a potential reversal for the GBPJPY.

BUY GBPJPY

Close Time

CLOSED

196.581

Entry Price

203.650

193.000

193.708 -0.840 -0.43%

358.1

Pips

Loss

193.000

192.987

Exit Price

196.581

Entry Price

203.650

Fundamentals

On Wednesday, the Office for National Statistics reported that the UK's inflation rate increased from 1.7% in September to 2.3% in October, surpassing market expectations of 2.2%.

The core Consumer Price Index (CPI), which excludes energy, food, alcohol, and tobacco, rose by 3.3% YoY, up from 3.2% the previous month and exceeding the anticipated 3.1%.

In terms of monthly data, the CPI increased by 0.6% MoM, higher than the expected 0.5%.

The acceleration of consumer inflation in the UK for October exceeded expectations, reinforcing the view that the BOE may implement gradual interest rate cuts in the coming months; as a result, the GBPJPY rose by 0.66% to 197.78 during the day.

MARKET WATCH: The overall and core CPI in the UK have both exceeded market expectations, with this acceleration largely attributed to factors such as airfare and rent. The BOE believes these elements do not adequately reflect persistent inflation.

We contend that this is still insufficient to prompt the BOE to lower interest rates in December. Even if another inflation report is released before the next BOE meeting, we believe a significant deceleration in service sector inflation will be necessary to reconsider a rate cut.

We anticipate that service sector inflation will continue to rebound around 5% over the next four months, and it is only expected to decline significantly starting in the second quarter of 2025, at which point we expect the BOE to accelerate its monetary easing measures.

Bulls Break Above Key Levels to Set the Stage for Further Gains_1

Technical Analysis

The UK's Consumer Price Index data for October exceeded expectations, leading investors to believe that the BOE may maintain interest rates in December. The GBPJPY has broken its downward trend and is beginning to reverse.

The strong upward movement of the GBPJPY indicates that the bullish pattern initiated in August is still in play.

Momentum indicators reveal that both the Relative Strength Index and the Stochastic Oscillator support the current market optimism. However, if prices fail to close above the resistance level around 197.35, short-term downside risks may still persist. If the bulls manage to hold above this level, the next target will be the October level of 199.70; beyond that lies a strong resistance zone between 202.00 and 202.80.

Overall, the GBPJPY appears to be forming a potential new bullish trend, but a pullback that does not break yesterday's low of 193.56 would establish a solid foundation for further gains.

Trading Recommendations

Trading Direction: Buy

Entry Price: 196.30

Target Price: 203.65

Stop Loss: 193.00

Deadline: December 5, 2024 23:55:00

Support: 196.22, 193.56, 192.94

Resistance: 198.53, 199.56, 200.89

Risk Warnings and Disclaimers

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