Gold surged to a new all-time high, touching $2,100 and settling around $2,070, driven by mounting expectations that the US Federal Reserve would maintain interest rates at its upcoming meeting and potentially consider rate cuts in 2023. Despite Fed Chair Jerome Powell's resistance to premature talks of easing, market participants are increasingly betting on a rate reduction in March, with a full pricing for a cut in May. The US ISM Manufacturing PMI, below estimates, signalled continued factory activity contraction, reinforcing the softer rate outlook. The latest US PCE inflation data indicated a price slowdown, and a two-year high in continuing jobless claims added to the dovish sentiment.

The price of gold reached new heights, surpassing $2,100 and settling around $2,070 on Monday, propelled by escalating expectations that the US Federal Reserve would keep interest rates steady at its imminent meeting and possibly entertain rate cuts in the coming year. This surge unfolded even as Fed Chair Jerome Powell pushed back against premature discussions of monetary easing.

Market dynamics now reflect a 60% probability that the US central bank might reduce its policy rate in March next year, with a complete pricing-in of a rate cut in May. Traders remained steadfast in their commitment to these expectations, further fueling the precious metal's ascent.

The timing of this gold rally coincided with the release of the US ISM Manufacturing Purchasing Managers' Index (PMI) for November, which fell below estimates. This data pointed to the 13th consecutive month of contraction in factory activity, providing additional support for the prevailing dovish sentiment regarding interest rates.

Furthermore, the latest US Personal Consumption Expenditures (PCE) inflation reading indicated a deceleration in prices, contributing to the narrative favoring a softer monetary stance. Alongside this, continuing jobless claims reached a two-year high, adding to the economic indicators aligning with a more accommodative approach from the Federal Reserve.

Amidst these developments, a notable market anomaly emerged, with gold experiencing an extraordinary surge. Traders who had been shorting gold from its all-time high found themselves on the wrong side of the market, especially considering the robust resistance level that previously existed.

The unexpected and substantial upward adjustment in the all-time high, nearly 5%, raised suspicions of potential market manipulation. Such significant moves in the gold market are typically challenging unless key market makers orchestrate strategic actions. The observed price action resembled a mammoth hunt strategy, triggering a domino effect as stop-loss orders were hit and margin calls intensified the selling pressure.

Regardless of the reasons behind this unusual move, it reinforced two fundamental trading principles. Firstly, the importance of using stop-loss orders as a risk management tool, and secondly, the need for caution and skepticism in trusting market movements.

As the fakeout achieved its purpose, the gold price retraced from the elevated horizontal level, aligning with earlier predictions. The market's current state is undeniably interesting, but it also poses significant risks. The technical analysis suggests a potential correction in the overbought conditions, anticipating a downward movement before a possible upward trajectory to the same elevated area above $2100. The gold market remains dynamic and unpredictable, demanding careful navigation from market participants.

ENTRY PRICE : 2030

STOP LOSS : 2080

TAKE PROFIT : 1930

EXP : 18 /12/23

The Australian dollar faces a downward trend as AUD/USD slips ahead of the Reserve Bank of Australia's (RBA) rate decision. The RBA is expected to maintain rates at 4.35%, signaling a pause in the four-month streak of hikes. However, the central bank may convey a hawkish tone to quell speculation about a 2024 rate hike, considering inflation remains high at 4.9%. Meanwhile, Federal Reserve Chair Jerome Powell's ambiguous remarks led to a slump in the US dollar, contributing to the Australian dollar's earlier gains. The AUD/USD technical analysis suggests a critical support zone around 0.6568, emphasizing potential buying opportunities amidst the market uncertainties.

The Australian dollar (AUD) is grappling with bearish pressures as the AUD/USD pair experiences a decline, setting the tone for the week. In the European session, AUD/USD is trading at 0.6648, marking a 0.40% decrease. This comes after the Australian dollar saw robust gains of 1.38% in the previous week.

Investor focus now turns to the Reserve Bank of Australia (RBA) and its upcoming rate decision scheduled for Tuesday. Anticipations lean toward the RBA maintaining rates at the current 4.35%, aligning with its four-month hiatus in rate adjustments. Despite the pause, the central bank might adopt a hawkish stance to downplay expectations of a 2024 rate hike, given persistently high inflation at 4.9%, significantly surpassing the 2% target.

The Australian dollar's recent trajectory was influenced by Federal Reserve Chair Jerome Powell's comments on Friday. Powell's nuanced message created uncertainty, initially triggering a sharp decline in the US dollar against major currencies, including the Australian dollar, which recorded a 1.06% jump.

Powell acknowledged that monetary policy is "well into restrictive territory," and inflation is "moving in the right direction." Despite cautioning against prematurely assuming a "sufficiently restrictive stance," investors interpreted Powell's remarks as dovish, leading to a substantial US dollar decline.

The futures markets, however, indicate a contrasting view, pricing in a 59% chance of a rate cut in March and an 87% likelihood in May, according to the CME FedWatch tool. Most Fed members expressed support for maintaining current rate levels, highlighting a disconnect between the Fed's stance and market expectations.

AUDUSD encountered resistance in its attempt to surpass the 0.67 level last week, resulting in a setback. Nevertheless, there is a noteworthy build-up of potential buyers expected around the 0.6568 mark, complemented by a substantial long-term support zone in close proximity at 0.65750.

- Unsuccessful breakout attempt at 0.67

- Anticipated buyer interest near 0.6568

- Robust support zone identified at 0.65750

- Expected buyer activity originating from 0.65750

The lack of success in breaching 0.67 suggests a potential consolidation phase. The 0.6568 region, supported by a strong long-term backing at 0.65750, is poised to attract buyers, potentially initiating a bullish movement.

Traders are advised to observe the price action around 0.6568 and 0.65750 for indications of buyer strength. A confirmed rebound from these levels could present favorable buying opportunities, targeting an upward movement.

The concentration of buyers around 0.6568 and the formidable support at 0.65750 signify a prevailing bullish sentiment, indicating a likely shift in momentum favoring AUDUSD buyers. Stay tuned for real-time updates and precise analysis as the dynamics of AUDUSD evolve throughout this week!

ENTRY PRICE : 0.6650

STOP LOSS : 0.65550

TAKE PROFIT : 0.68000

EXP : 18/12/23

During the Asian and European sessions on Monday, WTI crude oil prices fluctuated within a $1.00 range. The continued softness in WTI crude prices was attributed to the uncertainty surrounding OPEC+'s decision and the global energy demand growth.

OPEC+ recently announced a further reduction of 1 million barrels per day in oil production quotas. However, skepticism persists in the market regarding the effectiveness of this production cap, especially as it faces reluctance from several smaller member countries.

On one hand, the reduction, touted as 2.2 million barrels per day, is largely a continuation of this year's production cuts, essentially a case of "old wine in a new bottle," with the new reduction amounting to only around 900,000 barrels per day, falling short of the market's earlier expectation of 1 million barrels per day.

More concerning is the apparent weakness in the voluntary nature of OPEC+'s production cuts rather than a collective reduction, reflecting internal divisions. Traders are concerned that the voluntary nature of the cuts raises questions about whether member countries will follow through and implement the reductions.

Internal disagreements within OPEC+ pose challenges for further intensifying production cuts in the future. The organization is facing pressure from record production levels in external countries such as the US. If all member countries strictly adhere to voluntary production cuts, the inventory reduction in the first quarter of 2024 is expected to exceed 700,000 barrels per day, though the likelihood is low. Considering the increase in production from countries like Iran and the difficulty some nations may face in fulfilling their reduction commitments, it is expected that the first quarter of next year will likely see a state of basic supply-demand balance.

Finally, WTI crude oil will gather insights from inventory data released by the American Petroleum Institute (API) and the Energy Information Administration (EIA) this week. An increase in inventories may highlight weak demand conditions, potentially leading to further declines in oil prices. On the other hand, a decrease in inventories indicates increased consumption, alleviating concerns about an economic downturn and causing oil prices to rise.

However, the primary driver of the market this week is likely to be the release of US non-farm employment data, as an increase in hiring may give investors hope for further Fed rate hikes. Conversely, this could translate into a rise in the US dollar and an increase in risk aversion, potentially boosting the flow of safe-haven funds.

On the other hand, weak employment data may increase expectations of the Fed implementing loose policies next year, potentially implying upward momentum for crude oil prices.

In the short term, WTI crude oil has formed lower lows and slightly lower highs within a wedge pattern, but the price has already broken below the support level at $73.35. This could make the upcoming downward rebound, expected to be of similar magnitude to the pattern, more elusive.

The Fibonacci extension tool reveals additional downside targets that bears might focus on. The price has currently fallen below the 61.8% extension level around the psychological level of $73.00, and if it further declines, the target may be $71.88.

Technical indicators appear mixed. The 100 SMA below the 200 SMA indicates a path of least resistance to the downside, and the crude oil trading price is currently below both indicators; therefore, these indicators may continue to act as dynamic resistance levels.

The stochastic oscillator pointing downwards indicates the presence of selling pressure, but the oscillating indicator has also entered oversold territory, suggesting that bears may be exhausted. The relative strength index (RSI) is also in oversold territory, implying that a rally would mean a return of bullish momentum.

Finally, with the previous 4-hour closing price forming a bullish candle, it appears that the current downward momentum has been corrected. As long as the current price does not break below the recent intraday low again, it is expected that bulls will take control in the later period. In terms of trading strategy, buying the dips is recommended as long as the price does not break below the low point during the European session.

Trading Direction: Long

Entry Price: 73.30

Target Price: 82.77

Stop Loss: 71.10

Valid Until: 2023-12-18 23:55:00

Support: 73.00, 72.37, 71.18

Resistance: 73.84, 75.07, 76.79

The AUDUSD pulled back from multi-month highs and the downside appears limited ahead of Tuesday's RBA meeting.

For the RBA, another rate hike is certainly unlikely this week after raising rates by 25 basis points in November due to the recent much weaker-than-expected inflation data for October. While we may have already seen the peak in Australian rates, there is still a possibility of eventual tightening in the first quarter of 2024. By then, the base effect may make it challenging for inflation to continue declining unless the month-on-month data slows significantly.

In addition, the Australian economy is set to grow at a slower pace of 0.3% in the third quarter after a 0.4% month-on-month increase in GDP in the second quarter, which is in line with the 1.2% year-on-year growth rate, slightly stronger than the prevailing view. Net exports may weigh on economic growth this quarter, but this could be partially offset by an increase in inventories. Private investment could see moderate growth, and the construction sector remains quite robust. Consumer spending, which has been slowing, might show more resilience than expected, with some positive retail sales data in the third quarter.

HSBC has raised its forecasts for Australian inflation and GDP growth in 2023 and 2024, citing a larger-than-expected population surge. HSBC currently expects overall GDP growth in Australia to be 2.0% in 2023, higher than the previous forecast of 1.7%, and GDP growth in 2024 is expected to be 1.5%, up from the previous forecast of 1.2%.

The CPI inflation rate for 2023 is expected to rise from 5.5% to 5.7%, and the 2024 forecast is expected to increase from 3.1% to 3.5%.

HSBC Chief Economist Paul Bloxham also mentioned that they expect the RBA not to further hike rates, partly because most other major central banks, including the Fed and the European Central Bank, are unlikely to hike rates again.

From a technical perspective, the AUDUSD has recently made significant breakthroughs, notably surpassing the crucial 200-day SMA and closing above the 61.8% Fibonacci retracement level of the decline from July to October, which is seen as a new bullish trigger.

Furthermore, the oscillating indicators in the daily chart comfortably sit in the positive territory, with considerable distance from the overbought territory. This indicates that, against the backdrop of dovish expectations from the Fed, the path of least resistance for the AUDUSD is upward.

As long as the bulls can hold the support level at 0.6570, there is potential for further rebound. A sustained break above the channel resistance (currently at 0.6652) indicates that the overall downtrend from 0.7156 to the three-wave decline to 0.6269 has been completed. Subsequent attention should be given to confirming further rebound to the resistance level at 0.6894. However, a break below the support level at 0.6570 will indicate a rejection of this channel and a shift back towards a downward trend.

Structurally, as seen in the chart, recent price movements have been volatile. While the path of least resistance for the AUDUSD is upward, the upside potential appears crowded for structural trading. The market may experience a correction first before further upward movement. In terms of trading, the main strategy is to buy low and sell high.

Trading Direction: Short

Entry Price: 0.6650

Target Price: 0.6459

Stop Loss: 0.6700

Valid Until: 2023-12-18 23:55:00

Support: 0.6600, 0.6572, 0.6541

Resistance: 0.6675, 0.6690, 0.6738

As the market enters the final stages of 2023, the gold market is once again shining. After setting a monthly closing record in November, gold prices reached a new all-time high of $2147 per ounce early on Monday, followed by a correction.

This surge in gold prices represents the continuation of a two-month upward trend. The rapid rise in gold prices was initially triggered by the conflict between Israel and Hamas, which intensified global geopolitical tensions and spurred investors to seek safe-haven assets, thereby boosting demand for gold.

Meanwhile, the growing expectations of major central banks worldwide easing monetary policies further fueled the rise in gold prices. The Fed and some other major global central banks, including the European Central Bank, are expected to implement interest rate cuts in the coming year. This speculation is a key factor in the current dynamics of the gold market, as lower interest rates typically reduce the opportunity cost of holding non-interest-bearing assets like gold, making them more attractive to investors.

Equally interesting is that the market is no longer heeding the central banks' opinions, as Fed Chairman Powell has been quite clear in stating that rates will not drop quickly. However, the market always has foresight. Just as investors often hear Powell say, "Policy tightening will depend on the data." However, the current data is all pointing (betting) towards rate cuts.

This data-driven policy direction is rapidly spreading in the market, so investors don't actually need the Fed to start cutting rates to drive the trend in gold; they just need to anticipate such a move. People buy gold because they believe the downward pressure on interest rates is imminent. The worst-case scenario is that the Fed maintains higher rates for a slightly longer period than expected. However, ultimately, the next move will be a cut. This is the perspective investors should take in assessing the current market environment.

Last Friday and this Monday, gold experienced a remarkable trajectory. On Friday, nearing the closing, amid reduced risk appetite and decreased liquidity, prices rose to $2,075. On Monday, gold touched $2,145, marking a historic high.

The trend structure on Friday and Monday indicates that the bears have been thoroughly flushed out of the market. As liquidity is restored, the price retreated to the $2,060 range, which remains an extreme territory.

In bullish technical signals, the 50-day SMA crossing above the 200-day SMA forms a bullish continuation pattern. Furthermore, the price above this crossover point reinforces the bullish signal.

However, due to the significant stop-loss space, it is quite risky for both bulls and bears. For the bulls, the relative strength index (RSI) in the daily chart is hovering in the overbought zone, posing correction risks. For the bears, the market is currently in a bullish trend, indicating a solid foundation for further price increases. In summary, the mid-term upward trend remains intact, but there is also a risk of a correction.

The previous three times that gold made highs - in 2011 and three times in the last three years - it went into a sharp and deep correction that lasted for years in the first case and months in the aftermath of the pandemic. Considering reduced inflation concerns and the attractive yields of gold's main competitor, bonds, the latter scenario seems more likely to occur.

Technically, with the $2,081 level (the last of the three highs in the past three years) being thoroughly flushed out of the market, an expectation for a continuous decline is anticipated after the short-term rise. However, as long as the bulls can hold the $2,009 resistance-turned-support level, the future outlook remains bullish, with potential for further rebound. A sustained breakthrough of $2,130.39 will pave the way for the 161.8% Fibonacci retracement at $2,253.

Trading Direction: Short

Entry Price: 2072

Target Price: 2016

Stop Loss: 2110

Valid Until: 2023-12-18 23:55:00

Support: 2075, 2058, 2052, 2031

Resistance: 2076, 2082, 2090, 2098

During Monday's (December 4th) Asian session, WTI crude oil oscillated downwards, and it is currently trading at 73.5 dollars/bbl. Last Friday, WTI grew slightly and reached 76.8. In the evening session, although there was not too much negative news, a sharp decline happened and WTI was still dominated by sentiments. In the past period, the supply and demand expectations in the crude oil market have been completely reversed, and the market has continued to be more pessimistic. But, at present, OPEC+ has reached a voluntary production cut agreement, which will improve the oversupply situation of the oil market in the first quarter of next year. Surely, it depends on the implementation of the production cuts, but as the agreement has been reached, oil prices are supported and will be gradually stable. In the short term, wide fluctuations will take place, and future situations will be determined by the implementation of the production cuts. On the last trading day, our expectations deviated slightly. We expected a rebound in the Asian session but the price didn't reach the take-profit target, so we exited the market with a small loss. Yesterday, positive news was enough. The Israeli-Palestinian conflict restarted, and the U.S. replenished strategic crude oil inventories in advance. Although oil prices dropped instead of rising in a weak sentiment, investors need to be cautious when chasing the shorts at present. In a larger time frame, we expect oil prices to go up and investors can try to go long at lows. Especially, they can have a better profit/loss ratio if they trade at important support levels.  

Geopolitical aspects: The Palestinian-Israeli war restarted. The Israeli army said they had attacked more than 400 targets in the Gaza Strip since the resumption of military operations, which led to 200 deaths. A long-term ceasefire is difficult to reach.

News: The U.S. Department of Energy said that the scheduled plan to buy back 4 million barrels of oil to replenish the Strategic Petroleum Reserve (SPR) has been advanced from the next summer to the next February.

Today's focus: No important data and investors should focus on this week's Nonfarm Payrolls data and crude oil inventory data.

Oil prices rebounded slightly in the Asian session yesterday, once reaching 76.8, and began to fall sharply at 2:00 a.m. Finally, the daily chart closed lower. Recent oscillations are large, and profit protection and stop-loss control are significant for trading. Thus, investors should not get over-excited! At present, the current oil price is in the descending channel as the chart shows, and it is near the center of the channel. The initial support is near the previous low (the range of 72-72.5). If the support is broken, the important support below will be at the massive support area at this year's low (67), which is also the lower area of this channel. But as the current oil price is still in the range of 72.5-79.5, investors should buy low and sell high in this range.

Trading direction: Long

Entry price: 72.500

Target price: 76.800

Stop loss: 72.000

Support: 72.500/70.000

Resistance: 76.800/79.500