Bullish Signals Emerge From a Double Bottom Structure

Economic

Forex

Summary:

Historically, this zone has served as a magnet for price action, providing a potential pivot point for short-term recoveries.

BUY NZDUSD

Close Time

CLOSED

0.58529

Entry Price

0.60900

0.57700

0.56488 +0.00194 +0.34%

82.9

Pips

Loss

0.57700

0.57697

Exit Price

0.58529

Entry Price

0.60900

Last week, the Reserve Bank of New Zealand (RBNZ) delivered a surprising policy decision by slashing its Official Cash Rate (OCR) by 50 basis points, bringing it down to 4.25%. This move underscores the bank's increasing concerns about New Zealand's economic slowdown, opting for a more accommodative monetary stance to spur economic activity.

Inflation data for the second quarter revealed an annual decline to 3.3%, below market expectations.This lower-than-expected inflation suggests the RBNZ's measures are steering inflation closer to its target range. Market speculation has since intensified, with many anticipating that further rate cuts may be on the horizon to support economic recovery efforts.

Simultaneously, the RBNZ revised its GDP growth forecasts downward, projecting slower economic expansion in the coming year. These developments reflect mounting challenges for the New Zealand economy and have weighed heavily on the New Zealand Dollar (NZD). The combination of rate cuts, declining inflation, and downgraded growth expectations has created a bearish backdrop for the NZD. Global markets are pricing in prolonged accommodative policies by the RBNZ, further pressuring the currency in international trading.

On November 7, the U.S. Federal Reserve (Fed) reduced its benchmark interest rate by 25 basis points to a range of 4.50%-4.75%. While the Fed's actions aim to combat inflation, emerging signs of stress in the U.S. labor market could temper their pace of rate adjustments. Despite this, the unemployment rate remains at historically low levels.

Federal Reserve Chair Jerome Powell struck a cautious tone in his latest remarks, hinting that current rate cuts may suffice for now. Echoing this sentiment, FOMC Governor Michelle Bowman advocated for patience in implementing further policy changes. Powell also expressed confidence in the Federal Reserve's independence under the new U.S. administration and emphasized that the resilience of the U.S. economy allows for measured decisions on interest rates.

In addition, the Federal Reserve Bank of New York released its latest survey results, highlighting a shift in consumer expectations. According to the data, U.S. households anticipate an improvement in both their financial situations and federal fiscal conditions. This optimism is linked to the potential re-election of former President Donald Trump, with respondents expressing a sharp reduction in concerns about government debt and personal credit conditions under his leadership. Bullish Signals Emerge From a Double Bottom Structure_1

Bullish Signals Emerge From a Double Bottom Structure_1

Technical Analysis

The NZD/USD pair has established a defined range on the daily chart. The upper boundary sits near 0.6370, a level tested twice—on September 30 and December 28, 2023—before encountering strong bearish resistance. This double-top formation signals a potential reversal at these levels.

On the lower end, the price found support around 0.5797, touched twice—first in October 2023 and then recently on September 26, 2024. This zone could mark the bottom of the channel, suggesting the possibility of a price rebound toward the midpoint of the range.

The 100-period and 200-period moving averages converge near the 0.6050 level, aligning with the 50% Fibonacci retracement level. Historically, this zone has served as a magnet for price action, providing a potential pivot point for short-term recoveries. Additionally, this area coincides with where the price has consolidated for most of the past year, highlighting its significance as a key level of interest.

Trading Recommendations

Trading direction: Buy

Entry price: 0.5848

Target price: 0.6090

Stop loss: 0.5770

Validity: Dec 20, 2024 15:00:00

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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Eva Chen

Economic

Commodity

Summary:

The fall of the Assad regime and the rising uncertainty in the Middle East have led to an increase in oil prices. Despite OPEC+ deciding to postpone the planned production increase by three months as anticipated, crude oil remains weak due to expectations of oversupply.

SELL WTI

EXP

TRADING

69.200

Entry Price

65.000

72.600

69.447 +0.305 +0.44%

0.0

Pips

Flat

65.000

Exit Price

69.200

Entry Price

72.600

Fundamentals

The WTI crude oil price has shown some resilience below the US$67.00 threshold, attracting a number of buyers as the new week commences. Currently, the commodity is trading slightly under US$68.00, reflecting a 1% increase for the day.

Following the recent fall of President Assad's regime in Syria over the weekend, uncertainty in the Middle East has intensified, contributing to a rise in oil prices. It is anticipated that geopolitical risk premiums will continue to play a significant role in the coming days, providing tailwinds for crude oil prices.

However, despite OPEC+'s decision to extend a series of production cuts, ongoing concerns regarding global demand and the impending supply surplus are limiting price increases. Saudi Arabia's decision to reduce crude oil prices for its primary market in Asia for January further underscores the weak demand outlook.

In this week's energy market, crude oil prices may be influenced by inventory data and key metrics such as the U.S. Consumer Price Index (CPI). Strong data and expectations of a less dovish stance from the Federal Reserve could indicate greater potential for a rise in the U.S. dollar, which may lead to a decline in crude oil prices.

More Bears Will Follow as Price Breaks Down_1

Technical Analysis

WTI crude oil has breached the support level of a symmetrical triangle, indicating that bearish sentiment has gained dominance, potentially leading to further declines in the commodity to levels consistent with the height of the chart formation.

However, before additional bearish positions are established, the market will likely retest the previous support-turned-resistance levels. The Fibonacci retracement tool indicates that nearby resistance zones include the 38.2% Fibonacci level at US$68.32 and the 50% Fibonacci level at US$68.75. A more significant pullback could still reach the 61.8% Fibonacci level at US$69.17, which may serve as the lower boundary for bearish retracement.

The 100 SMA is below the 200 SMA, suggesting that the path of least resistance is downward, with selling pressure more likely to gain traction rather than reverse. However, the stochastic indicator has indicated that bearish momentum is waning; thus, any upward movement could signify a return of bullish pressure. The oscillator still has considerable room for upward movement before entering the overbought zone.

The Relative Strength Index has some downward potential before reaching the oversold zone, but the oscillator appears to be trending upward, signaling an impending rebound. Once it reaches the overbought zone, a pullback may occur, potentially intensifying selling pressure.

Trading Recommendations

Trading Direction: Sell

Entry Price:69.20

Target Price: 65.00

Stop Loss: 72.60

Valid until: December 24, 2024 23:55:00

Support: 67.90, 67.12, 66.77

Resistance: 68.32, 68.75, 69.17

Risk Warnings and Disclaimers

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Eva Chen

Commodity

Economic

Summary:

Gold prices remain stable around the US$2,650 threshold, influenced by a combination of geopolitical tensions, the U.S.' easing of interest rate policies, and significant gold purchases by central banks.

BUY XAUUSD

Close Time

CLOSED

2657.20

Entry Price

2706.00

2620.00

2623.41 +28.97 +1.12%

397.8

Pips

Profit

2620.00

2696.98

Exit Price

2657.20

Entry Price

2706.00

Fundamentals

On Monday, gold prices in the European market continued to trend upward, yet remained below the strong resistance level of US$2,660 - US$2,665, oscillating within a familiar range over the past two weeks. The U.S. non-farm payrolls released last Friday painted a complex economic landscape, significantly impacting the gold market, monetary policy, and investor strategies.

The U.S. Bureau of Labor Statistics revealed that the economy added 227,000 new jobs last month, surpassing market expectations of 214,000, and showing a notable improvement from the previous month's addition of 36,000 jobs.

However, this robust employment data coincided with a slight increase in the unemployment rate, which rose from 4.1% to 4.2%, indicating subtle disparities in the labor market environment.

The mixed employment report initially favored the U.S. dollar, but the uptick in the unemployment rate reaffirmed expectations that the Federal Reserve will lower borrowing costs in December; consequently, the precious metals market responded with a measured approach.

As time progresses, influenced by geopolitical risks and central bank purchases, gold prices have once again risen this Monday. This follows the occupation of Damascus by Syrian opposition forces, which has heightened demand for safe-haven assets.

Additionally, after a six-month hiatus, the People's Bank of China (PBOC) resumed its gold purchases for reserves in November. This move is likely to further elevate gold prices, given China's status as a major consumer of gold. By the end of November, China's gold holdings increased from 72.8 million troy ounces a month prior to 72.96 million troy ounces.

Gold prices are projected to reach historic highs in 2024, reflecting the combined effects of geopolitical tensions, the easing of interest rate policies in the U.S., and significant central bank acquisitions of gold.

Market Has Begun to Shift Towards a Bullish Trend_1

Technical Analysis

Since last Friday, gold prices have remained in a significant range-bound trading pattern, showing no clear direction. However, as time progresses and smaller ranges are breached, the market appears to be beginning to make a decision.

The lower range is defined by the time period starting last Monday. Since then, gold prices have not surpassed the US$2,660 threshold, establishing a foundation for a potential decline. Currently, gold prices have slightly exceeded last week's high of US$2,657, signaling an early indication of a bullish market.

Technically, the next resistance level is the supply zone between US$2,659 and US$2,666. A breakout above this range, accompanied by subsequent buying activity, would be viewed as a critical trigger for bullish sentiment, potentially allowing gold prices to recover the key psychological level of US$2,700. This momentum could further extend towards the next relevant level around US$2,722.

Conversely, a drop below the immediate support level of US$2,630 could pull gold prices back into the US$2,620 - US$2,613 range.

Trading Recommendations

Trading Direction: Buy

Entry Price: 2652

Target Price: 2706

Stop Loss: 2620

Valid until: December 24, 2024 23:55:00

Support: 2651, 2634, 2627

Resistance: 2659, 2666, 2672

Risk Warnings and Disclaimers

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Adam

Commodity

Summary:

On December 10, 2024, the price of gold (XAU/USD) was trading around $2,655/oz, with a recovery trend after a recent correction. The move was supported by concerns about global economic risks and expectations of dovish monetary policy from the US Federal Reserve (Fed)....

BUY XAUUSD

Close Time

CLOSED

2657.00

Entry Price

2665.00

2640.00

2623.41 +28.97 +1.12%

80.0

Pips

Profit

2640.00

2665.02

Exit Price

2657.00

Entry Price

2665.00

Gold prices continue to receive support from a stable interest rate environment as the Fed just signaled to keep interest rates unchanged at its policy meeting last week. With US economic data showing the producer price index (PPI) in November falling 0.1%, inflationary pressures appear to have eased, making the possibility of further interest rate hikes less likely.

In addition, the market is reflecting the impact of geopolitical tensions in the Middle East, increasing the demand for safe haven gold. Gold ETFs also recorded a sharp increase in inflows, reaching 12 tons last week, a sign that confidence in this safe asset is increasing.

Market psychology

Current market sentiment is bullish for gold as investors seek safe havens from economic turmoil. A report from the World Gold Council showed that physical gold demand from China and India rose 4% in November from the previous month, supported by the festive season and expectations of price stability.

However, demand from the US market has shown signs of slowing down as the USD maintains its strength. The DXY index is currently fluctuating at 104.3, putting some pressure on gold prices.

Technical analysis

On the H1 chart, gold price has broken above the 20-period moving average, creating a solid bullish base. The Bollinger Bands are expanding, indicating increased volatility. The current price is above a strong support zone at $2645, with the nearest resistance at $2665.

The CCI (14) indicator has just entered the overbought zone (104.26), suggesting a slight correction in the short term. However, the bullish momentum is still maintained as other technical signals such as the uptrend on the MACD are still clear.

Trading strategy

Entry: $2655

Take Profit: $2665

Stop Loss: $2640

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

The EUR/AUD pair is trading around 1.6350, with a strong bearish bias amid strength in the Australian Dollar and pressure on the Euro...

SELL EURAUD

EXP

EXPIRED

1.63500

Entry Price

1.63000

1.64000

1.66779 +0.00693 +0.42%

Pips

EXPIRED

1.63000

1.64555

Exit Price

1.63500

Entry Price

1.64000

The Australian dollar continued to receive support from a rebound in iron ore prices, which rose 2.3% last week to a three-month high of $130/tonne. Iron ore is Australia’s main export, so the rise in prices has driven investment flows back into the AUD. In addition, the Australian consumer confidence index rose to 105.8 in November, suggesting that the Australian economy is still holding on to its recovery momentum.

On the other hand, the euro was pressured by German industrial production data for November, which fell 1.7% compared to the forecast of a 0.8% decline. This reflects the difficulties in the eurozone's leading industry, which has led to a gloomy economic outlook for the region as a whole. The ECB has also recently sent out a cautious signal, highlighting the risk of a recession and the possibility of maintaining a limited tightening policy.

Market psychology

Market sentiment has shifted towards the Australian dollar as capital flows into commodity-related assets. At the same time, a weak economic outlook in Europe has prompted investors to reduce their positions in the euro, shifting to safer or higher-yielding assets.

Recent trading data shows that euro sell-offs increased by 12% over the past week, while Australian dollar buy-outs increased by 15%. This reflects a significant shift in investment strategy as large funds bet on a strong AUD recovery.

Technical analysis

On the M15 chart, EUR/AUD broke the important support zone at 1.6400 and is currently trading around 1.6350. The Bollinger Bands are widening, signaling a strong bearish trend. The price is now below the 20-period moving average, reinforcing the bearish momentum.

The Stochastic (5,3,3) indicator has entered deep into the oversold zone, with the %K value at 5.39. While this usually signals a potential short-term upside correction, the bearish trend remains dominant as the market has not shown any clear reversal signals.

Trading strategy

Entry: 1.6350

Take Profit: 1.6300

Stop Loss: 1.6400

Given the current fundamentals and technicals, EUR/AUD is facing strong downside pressure. Investors should pay attention to economic reports from the ECB and Australian export data this week for further developments.

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

The GBP/JPY pair is trading around 192.620, continuing its strong uptrend on the back of sterling strength and Japanese yen weakness. The rally is supported by positive UK economic data and the prospect of easing by the Bank of Japan (BoJ)...

BUY GBPJPY

Close Time

CLOSED

192.600

Entry Price

192.900

192.400

196.400 -0.357 -0.18%

30.0

Pips

Profit

192.400

192.900

Exit Price

192.600

Entry Price

192.900

The British pound gained significantly after the UK GDP report for November 2024, recording a growth of 0.4% compared to the expectation of 0.3%. In addition, the services PMI index reached 52.7 in November, higher than the forecast of 51.8, reflecting the strong recovery of the UK economy. These signals led the market to expect that the Bank of England (BoE) could pause its tightening policy in the first quarter of 2025, but still maintain a tough stance in the short term.

In Japan, the yen continued to be under pressure as the BoJ made no move to change its negative interest rate policy at its recent meeting. The Japanese bond market recorded a drop in the 10-year yield to 0.84%, widening the yield gap with the UK, where the 10-year bond yield remained around 4.1%.

Market psychology

Sentiment is tilted towards the pound as investors look to the UK economy for strength and capital flows into higher-yielding assets. At the same time, capital continues to leave the yen due to its lack of yield appeal and the prospect of unchanged monetary policy from the BoJ.

Large funds have adjusted their positions on GBP/JPY, with inflows rising 18% over the past week, reflecting confidence in the pair’s upward momentum. The Fear and Greed Index rose slightly to 64, indicating that investors remain bullish on the forex market.

Technical analysis

On the M15 chart, GBP/JPY broke the important resistance at 192.300 and is currently hovering near 192.620. The Bollinger Bands are expanding, signaling increased volatility. The price is also above the 20-period moving average, reinforcing the bullish momentum.

The Stochastic (5,3,3) indicator shows an overbought signal with a %K value of 100. However, this does not rule out the possibility of further upside as the market momentum is strong. The nearest support zone is at 192.400, while the next resistance is at 192.900.

Trading Recommendations

Entry: 192.600

Take Profit: 192.900

Stop Loss: 192.400

Risk/Reward Ratio:

2:1

Conclude

GBP/JPY is showing outstanding strength thanks to a combination of fundamental and technical factors. With positive signals from the UK economic data and a gloomy outlook for the Yen, the pair is expected to continue its uptrend in the short term. Investors should closely monitor the statements from the BoE and BoJ this week for further guidance.

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

On December 9, 2024, USD/JPY is trading around 150.731, continuing its strong rally after breaking through the resistance level of 150.600. Market sentiment is leaning towards placing confidence in the USD, supported by positive US economic data and expectations of interest rates from the Fed....

BUY USDJPY

Close Time

CLOSED

150.750

Entry Price

151.000

150.500

156.302 -1.112 -0.71%

25.0

Pips

Profit

150.500

151.000

Exit Price

150.750

Entry Price

151.000

The US dollar continued to show strength as the market digested the US Non-Farm Payrolls report released on December 8, which beat expectations by adding 223,000 jobs compared to the forecast of 200,000. The unemployment rate remained at 3.7%, indicating that the US labor market remains strong. This reinforced expectations that the Fed will keep interest rates high for longer to control inflation.

In Japan, the Bank of Japan has maintained its stance of maintaining negative interest rates and yield curve control (YCC) policy. This has widened the interest rate gap between the US and Japan, putting downward pressure on the Yen. In addition, the report of Japan's GDP growth in the third quarter was only 0.6%, lower than the expectation of 0.8%, further reducing the attractiveness of the Yen.

Market psychology

The current market sentiment is tilted towards low-risk assets, with money flowing into the US dollar due to the lure of higher interest rates. The DXY (Dollar Index) rose to 105.8, reflecting the greenback’s strength against other major currencies. Meanwhile, the VIX index remained steady at 18.5, indicating investor confidence in the outlook for US financial markets.

On the other hand, investors are concerned about the recovery of the Japanese economy. The yield on 10-year Japanese government bonds fell slightly to 0.88%, reflecting the lack of attractiveness of Japanese assets.

Technical analysis

On the M30 chart, USD/JPY broke through the important resistance zone at 150.600 and is now approaching the next resistance level at 150.900. The Bollinger Bands are widening, indicating increased volatility and a possible continuation of the uptrend. The price is now above the 20-period moving average, reinforcing the bullish momentum.

The Stochastic (5,3,3) indicator is in the overbought zone with a %K value of 91.91, signaling a possible slight correction before continuing to rise. The nearest support level is located at 150.500, while the next important resistance is located at 151.000.

Trading strategy

Overall, USD/JPY continues to maintain a strong uptrend thanks to support from positive US economic data and the weakness of the Japanese Yen. Traders should consider buying strategies at support zones,

Entry: 150.750

Take Profit: 151.000

Stop Loss: 150.500

Risk Warnings and Disclaimers

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Data

Bullish Signals Emerge From a Double Bottom Structure

Technical Analysis

More Bears Will Follow as Price Breaks Down

Fundamentals

Technical Analysis

Trading Recommendations

Market Has Begun to Shift Towards a Bullish Trend

Fundamentals

Technical Analysis

Trading Recommendations

Gold shows continued recovery trend

Market psychology

Technical analysis

Trading strategy

EUR/AUD shows continued bearish momentum

Market psychology

Technical analysis

Trading strategy

GBP/JPY shows strong bullish signals from the British Pound

Market psychology

Technical analysis

Trading Recommendations

Conclude

USD/JPY Shows Strong Upside Momentum With Supporting Data

Market psychology

Technical analysis

Trading strategy

Risk Disclosure