01/12/2022 Daily Reports
Support Level: 1.0290 - 1.0200 - 1.0100 Resistance Level: 1.0500 - 1.0600- 1.0700
EUR/USD
- The EUR/USD jumped from weekly lows of 1.0290 as the Federal Reserve (Fed) Chair Jerome Powell acknowledged that moderation in the speed of interest rate increases might come as soon as the next meeting. That said, the Euro (EUR) is climbing, while the US Dollar Index (DXY) turned negative, dropping 0.42%. At the time of writing, the EUR/USD remains volatile, trading above 1.0400, still bullish in the daily chart.
- In some of his remarks, Fed Chair Jerome Powell said it “Makes sense to moderate pace of interest rate hikes,” adding that it could happen as soon as the December meeting. He said that the Federal Reserve has made substantial progress towards a “sufficiently restrictive policy,” though he added that there’s “more ground to cover.”
- Powell added that rates are more likely to rise “somewhat higher” than what policymakers estimated at the September meeting. He emphasized that rates would need to be higher “for some time.” The Fed Chair reiterated that inflation remains “far too high,” and even though the October CPI report was a “welcome surprise,” he needs more evidence that inflation is actually “declining.”
- The EUR/USD pair is trading near the 1.0415, up for the day with bullish stance in daily chart. The pair stabilized above 20 and 50 SMA, indicates bullish strength. Meanwhile, the 20 SMA continued accelerating north and developing above longer ones, suggests bulls not exhausted yet. On upside, the immediate resistance is 1.0500, break above this level will extend the advance to 1.0600.
- Technical readings in the daily chart support the bullish stances. The RSI indicators hovering above the midline and stabilized around 65. The Momentum indicator stabilized above the midline, indicating upward potentials. On downside, the immediate support is 1.0300 and below this level will open the gate to 1.0200.
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Support Level: 1.1940 - 1.1900 - 1.1760 Resistance Level: 1.2100 - 1.2160 - 1.2300
GBP/USD
- The British Pound is trading negatively in the day, failing to capitalize on dovish remarks by the Federal Reserve Chair Jerome Powell, which opened the door for a 50 bps rate hike at the December meeting, albeit reiterating that work needs to be done. At the time of writing, the GBP/USD is trading volatile, around 1.2050, still bullish in the daily chart.
- In his speech, the Federal Reserve Chair said that it made “sense” to slow the speed of rate hikes, stating that it could happen at the December meeting. Powell added that the Fed has made substantial progress towards a “sufficiently restrictive policy,” though he said there’s “more ground to cover.”
- Powell added that rates would get higher than projected in September and remain restrictive for “some time.” HE echoed some of his colleague’s comments adding that inflation is “far too high” and needs more evidence that inflation is actually “declining.”
- The GBP/USD offers bullish stance in daily chart. Cable still stabilized above all main SMAs, indicating bullish strength in short term. Meanwhile, the 20 SMA continued accelerating north and developing above longer ones, suggests bulls not exhausted yet. On upside, The immediate resistance is 1.2100 with a break above it exposing to 1.2160.
- Technical readings in the daily chart support the bullish stances. RSI indicator stabilized around 61, while the Momentum indicator stabilized above the midline, suggesting upward potentials. On downside, the immediate support is 1.1940, unable to defend this level will resume the decline to 1.1900.
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Support Level: 1730 - 1700- 1680 Resistance Level: 1787 - 1800 - 1810
XAU/USD
- Spot gold trades at fresh weekly highs at around $1,769 a troy ounce post Fed Chair Powell’s speech. The market sentiment fluctuated between optimism and fear, with the US Dollar starting the day on the back foot, recovering mid-way, and finally plummeting to close it in the red against its major rivals.
- The latest US Dollar slump resulted from US Federal Reserve Chair Jerome Powell’s words. Speaking at the Brookings Institute on the economic outlook, inflation and employment, Powell was mostly dovish. He said it makes sense to moderate the pace of interest rate increases, although he added that the monetary policy would need to remain “restrictive” for some time. Additionally, he said that the time to slow the pace of rate hikes could come as soon as the next meeting in December.
- Powell added that economic growth has slowed below the long-run trend, which must be maintained. Finally, he said that he does not want to over-tighten and said that cutting rates is not something he intends to do anytime soon. Chances of a 50 bps rate hike in December increased from 69.9% ahead of the speech to above 75%.
- Gold price stabilized around 1769, up for the day and bullish in the daily chart. The gold price still stabilized above 20 and 50 SMA, suggesting bullish strength. Meanwhile, the 20 SMA continued accelerating north and developing above longer ones, indicating bulls not exhausted yet. On upside, the immediate resistance is 1787, break above this level will open the gate to extend the advance to 1800 area.
- From a technical perspective, the RSI indicator hold above the midline and stabilized around 63, suggesting bullish strength. The Momentum indicator stabilized above the midline, suggests upward potentials. On downside, the immediate support is 1730, below this area may resume the decline to 1700.
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Support Level: 137.50 - 136.00 - 135.00 Resistance Level: 140.00 - 141.00 - 141.60
USD/JPY
- The US Dollar fell on Wednesday after Federal Reserve Chairman Jerome Powell said that the US central bank could scale back the pace of its interest rate hikes “as soon as December.” At the time of writing, the EUR/USD remains volatile, trading around 138.10, still bearish in the daily chart.
- The report published by Automatic Data Processing (ADP) on Wednesday showed that private sector employment in the US rose by 127K in November, below the 200K of market consensus. It was the lowest reading since January 2021.
- The US Bureau of Economic Analysis revealed that the US economy grew at an annual rate of 2.9% in the third quarter, above the 2.6% previous estimation. Price indicators were revised higher with the GDP deflator from 4.2% to 4.3%. Other US economic reports showed the Chicago PMI tumbled from 45.2 to 37.2 in November against expectations of a modest increase. Pending Home Sales fell by 4.6%, a little less than expected.
- The USD/JPY pair stabilized around 138.10, down for the day and bearish in the daily chart. The price still maintains the downward slope and develops below all main SMAs, suggests bearish strength in short term. Meanwhile, 20 SMA continued accelerating south and heading towards longer ones, indicating bears not exhausted. On upside, overcome 140.00 may encourage bulls to challenge 141.00, break above that level will open the gate to 141.60.
- Technical indicators suggest the bearish strength. RSI stabilized around 34, while the Momentum indicator continued developing below the midline, suggests downward potentials. On downside, the immediate support is 137.50, break below this level will open the gate to 136.00 area.
Support Level: 34400 - 34000 - 33600 Resistance Level: 34700 - 35000 - 35200
DJI
- DJI jumped to fresh high around 34620 area on Wednesday post Fed Chair Powell’s speech. The price reversed its direction, bounced from intraday low 33620 and gained around 1000 pips ,up for the day and bullish in the hourly chart. The price stabilized above all main SMAs, suggests bullish strength. Meanwhile, 20 SMA continued accelerating north and developing above longer ones, suggests bulls not exhausted yet. On upside, overcome 34700 may encourage bulls to challenge 35000, break above this level will open the gate to 35200.
- Technical indicators suggest the bullish strength. RSI stabilized around 78, while the Momentum indicator stabilized above the midline, suggests upward potentials. On downside, the immediate support is 34400, break below this level will open the gate for more decline to 34000 area.
Support Level: 86.00 -83.60 - 80.80 Resistance Level: 87.50 - 89.00 - 90.50
BRENT
- Brent climbed to intraday high 87.40 area, hold most gains and ended Wednesdays at around 86.70, up for the day and bullish in the hourly chart. The price stabilized above 20 and 50 SMAs, suggests bullish strength in short term. Meanwhile, the 20 SMA started turning north and heading towards 200 SMA, indicating bullish bias. On upside, overcome 87.50 may encourage bulls to challenge 89.00, break above this level will open the gate to 90.50.
- Technical indicators suggest the bullish movement, hovering above the midline. RSI stabilized at around 62, while the Momentum indicator stabilized above the midline, suggests upward potentials. On downside, the immediate support is 86.00, break below this level will open the gate for more decline to 83.60 area.
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