Last week, the RBA's decision to increase the cash rate by 25 basis points to 4.35% aligned with market expectations, with approximately 80% of the rate reflected in the currency market. RBA Governor Michele Bullock's statement summarized information received since August's official forecasts, indicating that "the risk of inflation remaining higher for longer has increased". Economic growth and inflation both being higher than expected are causes for concern.

While this statement was largely anticipated by the market, there was a reaction to an unexpected change in the wording of the final paragraph, shifting from "may need to further tighten monetary policy" (used in the past 6 meetings) to "whether further tightening of monetary policy." This change clearly does not rule out the possibility of future rate hikes.

RBA Assistant Governor Marion Kohler confirmed this expectation in today's speech, stating that the anticipated decline in inflation is expected to be a "more gradual process than previously thought." This outlook stems from the current economic environment characterized by a "still-high level of domestic demand," "strong labour," and other cost pressures, with these factors expected to keep the inflation rate hovering just below 3% by the end of 2025.

Kohler pointed out that the recent trend of declining inflation is mainly driven by "lower goods price inflation," contrasting sharply with "domestic inflation," especially in the services sector, showing resilience. Domestically sourced inflation has been "widespread and slow to decline".

Kohler also emphasized the delicate challenges faced in managing future inflation in the next stage, predicting this stage to be "more drawn out than the first phase," aligning with the experiences of other developed economies facing similar inflation patterns.

Furthermore, she warned of potential unforeseen challenges, citing the recent rise in fuel prices as an example, where supply shocks could unpredictably impact overall inflation.

Kohler highlighted the uncertainty of the road ahead in managing inflation, stating, "The road ahead could be bumpy."

Given the significant risk still priced into the currency market for further RBA tightening, the surprising underperformance of the Australian dollar against many major currencies is notable. With limited current data, there is a general perception that the likelihood of a rate hike on December 5th is low. However, by May 2024, the cash rate is expected to rise by another 20 basis points (with an 80% probability of a rate hike). Therefore, in terms of short-term yield differentials, the support for the Australian dollar has significantly improved in the past few weeks.

Last week, the AUDUSD posted declines for five consecutive days, with a drop exceeding 2%, erasing much of the gains from the previous week.

The recent hawkish shift by the Fed has exerted increased pressure on the Australian dollar, simultaneously offsetting the Reserve Bank of Australia's re-emergence of a hawkish stance due to concerns about persistent inflation (as evidenced by the rate hike last week).

Currently, the technical structure of the AUDUSD in the daily chart has significantly weakened. The price has fallen below the crucial support level at 0.6370, and the moving averages have turned into a bearish pattern. The RSI is declining but still remains in positive territory.

On the other hand, the stochastic oscillator, deeply oversold, may slow down the pace of the bearish momentum. If the downward speed is constrained, and the bearish trend remains intact, it should provide better selling opportunities. The initial downside target range is below 0.6300, followed by a pause, maintaining a bearish bias. In terms of trading, the strategy leans towards going short at highs.

Trading Direction: Short

Entry Price: 0.6400

Target Price: 0.6287

Stop Loss: 0.6520

Valid Until: 2023-11-27 23:55:00

Support: 0.6329, 0.6314, 0.6285, 0.6270

Resistance: 0.6366, 0.6396, 0.6408, 0.6426

Fundamentally on this pair, we will witness data release in the Australian this week the unemployment rate with negative expectation of 3.7% which will give weakness to the Australian dollar On the other hand we have coming news in Europe ZEW Economic sentiment with positive expectation to increase to 4.6 Usually this will give strength for the euro.   

Prev: 3.6% Fcst: 3.7%

Prev: 2.3 Fcst: 4.6

In this 4 - hour diagram chart, the market price is 1.67921 we expect the price to move down to the previous demand zone at 1.67000 to create a new Higher low and from there we expect the price to turn back up to the old supply zone at 1.68500 (Daily chart resistance) to create uptrend with Higher highs and higher lows Following the daily chart uptrend with 20 moving average pointing up.

Trading Direction: Long

Entry Price: 1.67001

Target Price: 1.68439

Stop Loss: 1.66290

Fundamentally on this pair, We will witness data release in the Australian business confidence index and consumer confidence index with negative expectations If the actual result comes as the market expected this will be negative for the AUD and we might see AUD gain weakness, on the other hand, we don't have that much news for the Canadian dollar the next few days.    

Prev: 1 Fcst: -1

Prev: 2.9% Fcst: 0.7%

In this 4 - hour diagram chart, the market price is 0.87757 we expect the price to move up To the previous supply zone at 0.88300 to create a new lower high and from there we expect the price to keep falling to the old demand zone at 0.86800 creating downtrend with lower high and lower low with 20 moving average pointing down.

Trading Direction: Short

Entry Price: 0.88299

Target Price: 0.86810

Stop Loss: 0.89030

During Monday's (November 13th) Asian session, WTI crude oil edged down, and it is currently trading at 76.5 dollars/bbl. Last Friday, WTI crude oil rebounded from the bottom and reached 77.6. It closed the chart higher, but the upside momentum was insufficient. In addition, Saudi Arabia and Russia reiterated their commitment to voluntarily cut crude oil supply by the end of the year, so oil prices rose slightly. However, as fears of supply disruptions from the Israeli-Palestinian conflict receded and crude inventories piled up, oil prices dropped quickly, realizing 3 consecutive weeks of losses. Meanwhile, the overall news of the weekend was more negative than positive. For example, the Fed officials continued to make hawkish remarks, and a resolution on the Palestinian issue was made at the extraordinary joint Arab-Islamic summit (though it stays in the condemnation without substantive plans of action). All these would have negative impacts on WTI except for the U.S.-China talk which is likely to be another lie made by the U.S. With the weakening supply and demand, investors can expect that next month, Saudi Arabia and Russia may extend or expand their production cuts. It can support the oil price, but inventory and economic fundamentals will determine the price at last. If there is a surplus in the crude oil market, production cuts are only passive. They can stop oil prices from falling but cannot drive them higher.

Macro: U.S. initial jobless claims rose to 217,000 for the seventh consecutive week as of the week of November 4th. At the same time, China's CPI fell 0.2% YoY in October, recording a negative figure after two months, which is also lower than the forecast -0.1%. This figure remained flat in September. In October, China's total exports of goods and services also shrank faster than expected, and the trade account totaled 56.53 billion dollars in October while the forecast was 77.71 billion dollars versus the previous $82 billion dollars. Moreover, October exports came in at an annualized rate of -6.4% versus the forecast of -3.3%.

Today's focus: No important data, and investors should focus on the U.S.-China talks. 

Last Friday, WTI crude oil stabilized and rebounded to 77, closing the daily chart positively. However, the weekly chart closed lower for 3 consecutive weeks, indicating a weak momentum, which is hard to reverse. Technically, MACD forms a death cross in the 1H chart, and there are continuous long-upper-shadows in the candlestick chart, suggesting a possible depreciation at the 1H time frame. Nonetheless, MACD dropped to the oversold area, meaning that the momentum was released effectively. Also, a bull candle appeared after the doji star last Thursday, suggesting a possible growth in WTI. Therefore, WTI will not decline continuously in the daily chart, and investors should focus on the support near 73.8. For aggressive investors, try to go long with small positions, and buy in after a plunge.

Today's trading recommendations: Buy at lows. If WTI plunges to 74.8, try to go long with small positions and set the stop-loss at 74.3. To take profits, the first target will be at 77.4, where investors can reduce the position size and move the stop-loss to breakeven, and put the second target at 80.0. If WTI plummets to 73.8 again, investors should enter and go long, and stop loss by 0.5 dollars. The target to take profits is the same as the first target above.  

Trading direction: Long

Entry price: 74.800

Target price: 77.700

Stop loss: 74.300

Support: 74.800/73.800

Resistance: 77.400/80.000

In Monday's (November 13th) Asian session, spot gold oscillated narrowly, and it is now trading at 1935. Last week, gold prices fell below 1950 for the third time before officially declaring an effective breakthrough, resulting in a retracement of 55 dollars. It was partly due to the Fed officials' hawkish remarks, but the cooling of risk-aversion regarding the Palestinian-Israeli conflict was the main factor. It was also why the gold price tumbled on Friday. Additionally, gold bulls expected that the extraordinary joint Arab-Islamic summit would solve the Palestinian issue through a resolution at the weekend, but the result was disappointing. In fact, the resolution was more about criticizing the Israeli attacks on the Gaza Strip, the West Bank, and other places, as well as Israel committing large-scale war crimes. Apparently, it looks like an agreement was reached, but it is still stuck in a vigorous condemnation as there is no substantive plan of action nor any participation. For the gold price, the biggest negative impact is that the conflict did not escalate. After this round of plummeting, gold has returned to our expected price, and the next step is to consider the direction of the gold price. Now, there is little marginal change. Both bulls and bears have opportunities as the price will mainly oscillate next. In the short term, the market will be affected by the meeting between Chinese and U.S. leaders. The global downturn will be improved if the relationship between the two countries is promoted, but it is not likely to happen because the U.S. is always provocative even when reaching an agreement. Therefore, we need to trade according to the pattern, and gold will test 1924, a level with important support (where the 60-day SMA is located). If gold plunges to this position at first, aggressive investors can go long with small positions, and continue to add long positions after further depreciations. The profit/loss ratio will be considerable if investors try several times, with the core to win more with small stop-loss.

News: Fed Chairman Powell said the Fed will "continue to act cautiously". If appropriate, the Fed will not hesitate to further tighten monetary policy. He also claimed that he was not sure whether the Fed had reached the position of 2% inflation.

Today's focus: No important data and investors should focus on the U.S.-China talks.

Gold finally made a breakdown last Friday. It dropped below 1950 effectively, and it may rebound from the bottom this week after a plummet of 55 dollars. However, investors should manage the trading step to avoid losses. Regarding the daily chart, gold is in an oversold area after continuous depreciation. Thus, investors need to focus on the support near the 60-day SMA (1924), as gold is likely to drop further. Nevertheless, it will be tested many times before gold declined below it (similar to 1950, when gold tried several times to cross through it). Despite a weak pattern, investors should buy at lows by referring to the range from 1924 to 1950.  

Trading Recommendations: Buy low and sell high. If gold rebounds to 1953, investors could go short with small positions, and set the stop-loss at 1958. To take profits, the first target will be at 1940, where they can reduce the position size and move the stop-loss to breakeven, and the second target should be at 1924. Meanwhile, if gold plunges to the range between 1920 and 1925, investors could go long with small positions, and fix the stop-loss at 1918. The first target price to take profits will be 1938, where investors can reduce the position size and move the stop-loss to breakeven, and the second target price is 1950.  

Trading direction: Long

Entry price: 1923

Target price: 1950

Stop loss: 1918

Support: 1932.000/1924.000

Resistance: 1940.000/1953.000

The GBPJPY failed to benefit from its Monday's break above the short-term resistance trend line and is currently holding below the 186.00 level. This reflects bearish momentum, indicating that the first resistance at 186.00 may see bearish reactions, potentially pushing prices down toward the first support at 184.64, where its significance as a pivotal swing low support will be reinforced. Furthermore, the second support at 184.22 is considered a retracement support at the 50% Fibonacci level.

On the resistance front, the first resistance at 185.96 is regarded as a multi-wave high resistance, and the second resistance at 186.67 is seen as a swing high resistance, both signaling key levels within the trading environment.

Regarding momentum indicators, the Relative Strength Index (RSI), while relatively weak, remains above the neutral 50 level. The MACD is still above the zero line and within the positive territory, indicating that recent buying interest remains active. However, with the stochastic oscillator looking for a bearish reversal near the overbought level of 80, there is uncertainty about whether there is enough bullish strength to push the price toward the August high at 186.45.

Meanwhile, the asset still has crucial levels below 186.00 that could resist selling pressure. Over the past two days, the 50-day SMA has been constraining the downside movement, situated at 182.67, while the uptrend lines since March at 181.65 and since April 2022 at 179.60 might also prevent further price declines.

If the bears take the lead, the asset could potentially plummet to the 175.85 area, which overlaps with the 38.2% Fibonacci retracement level of the range from 158.25 to 186.45 unless the 178.30 area quells selling impulses beforehand.

If the uptrend resumes above the eight-year high at 186.45, the bulls might pause near the November 2015 high at 188.80 before extending toward the critical resistance line on October 2022 at 190.50. Attention might also be drawn to the uptrend line breached in March. If it gives way, the door to the 195.30 upper limit for 2015 could open.

Overall, despite the recent breakout of the bullish trendline, GBPJPY bulls remain cautious. On the other hand, bears have been unable to sustain adding positions as important support levels remain intact. A closing price above 183.55 or below 179.60 may offer the market its next directional cue.

The GBPJPY tends to maintain a neutral stance on an intraday basis and may see some selling below the temporary top at 185.94. However, as long as the support level at 182.71 holds, further upside is expected. Bulls will look to resume the rebound initiated at 178.02 once above 185.94, with the first target being the 186.45 resistance. A decisive breakout would signal a resumption of a larger uptrend.

From a broader perspective, as long as the support at 176.29 holds, the larger uptrend that began from 123.94 should still be in progress. A breakout above 186.75 will target 195.30 (the 2015 high). Nevertheless, holding 176.29 would confirm a medium-term top and introduce a longer and deeper consolidation. In terms of trading strategy, it's advisable not to chase shorts, and focus on buying the dips.

Trading Direction: Long

Entry Price: 183.60

Target Price: 186.70

Stop Loss: 180.30

Valid Until: 2023-11-23 23:55:00

Support: 184.64, 183.52, 182.72

Resistance: 185.94, 186.45, 186.75