The daily reports for important events that affects the forex, stocks and commodities markets.

14/12/2022 Daily Reports

Support Level: 1.0600 - 1.0540 - 1.0500 Resistance Level: 1.0670 - 1.0780- 1.0940

EUR/USD

  • EUR/USD has rallied heavily as the US Consumer Price Index has come in below expectations, leaving the door wide open for a pivot from the Federal Reserve that meets this week to decide on its monetary policy path. At the time of writing, EUR/USD is up on the day by over 1% and trading at 1.0630, bullish in the daily chart.
  • As a consequence of the CPI data, the terminal Fed rate is now down to 4.86% vs 4.98% prior to the report which is weighing heavily on the US Dollar and US Treasury yields. DXY, an index that measures the US dollar vs. a basket of currencies fell to a low of 103.923 having been as high as 105.095 on the day as investors give a sigh of relief with the US benchmarks rallying – The Nasdaq jumped over 500 points.
  • On Wednesday, the focus will be on the US Federal Reserve. The central bank is expected to hike rates by 50 bps and could anticipate the end of the tightening cycle. Chairman Jerome Powell has anticipated there’s a good chance the central bank will slow the pace of tightening as soon as in this meeting, and the encouraging inflation outcome for sure exacerbated the idea.
  • The EUR/USD pair is trading near the 1.0637, 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 far above longer ones, suggests bulls not exhausted yet. On upside, the immediate resistance is 1.0670, break above this level will extend the advance to 1.0780.
  • Technical readings in the daily chart support the bullish stances. The RSI indicators hovering above the midline and stabilized around 69. The Momentum indicator stabilized above the midline, indicating upward potentials. On downside, the immediate support is 1.0600 and below this level will open the gate to 1.0540.

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    Support Level: 1.2340 - 1.2200 - 1.2100 Resistance Level: 1.2445 - 1.2520 - 1.2660

    GBP/USD

    • The GBP/USD soared sharply following the release of a softer-than-expected inflation report in the US. In the release, the GBP/USD broke to levels last seen in June 2022, hitting a fresh six-month high at around 1.2444 and ended Tuesday at around 1.2365, still bullish in the daily chart.
    • The US revealed that the headline CPI increased 0.1% MoM from the previous month and, on an annual based, ticked lower to 7.1% vs. estimates of 7.3%. Although general inflation continued its downtrend since peaking In June at 9.1%, the so-called core CPI it’s the spotlight, as it suddenly turned north in September. However, November’s data showed inflation is easing, with core CPI at 6%, below the 6.3% consensus.
    • That said, money market futures have priced in that the Federal Funds rate (FFR) would likely peak at around 5%, with traders expecting the first rate cut of 20 bps at around September 2023, as shown by Eurodollar futures. In the meantime, the US Dollar Index tumbled sharply to six-month lows around 103.586 before trimming some of its losses, closing into the 103.900 mark.
    • 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 1.2445 with a break above it exposing to 1.2520.
    • Technical readings in the daily chart support the bullish stances. RSI indicator stabilized around 67, while the Momentum indicator stabilized above the midline, suggesting upward potentials. On downside, the immediate support is 1.2340, unable to defend this level will resume the decline to 1.2200.

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    Support Level: 1795 - 1777 - 1765 Resistance Level: 1825 - 1834 - 1847

    XAU/USD

    • Spot gold peaked at $1,824.50 a troy ounce, now hovering around $1,810.00 as The US Dollar collapsed following the release of the United States Consumer Price Index.
    • According to the Bureau of Labor Statistics, the CPI rose by 7.1% on a yearly basis in November, easing from 7.7% in October. In the same period, core CPI, which excludes volatile food and energy prices, rose by 6%, below the 6.1% expected.
    • The market now firmly believes that rates will be increased by 50 basis points. The Fed had raised its key rate by 75 bps at each of its previous four meetings. According to the Fed Fund Futures, interest rates are likely to peak at around 5% next May/June.
    • Gold price stabilized around 1810, up for the day and bullish in the daily chart. The gold price still stabilized above 20 and 50 SMA, suggesting bullish strength in short term. Meanwhile, the 20 SMA continued accelerating north and developing above 50 SMA, indicating bulls not exhausted yet. On upside, the immediate resistance is 1824, break above this level will open the gate to extend the advance to 1834 area.
    • From a technical perspective, the RSI indicator hold above the midline and stabilized around 64, suggesting bullish strength. The Momentum indicator stabilized above the midline, suggests upward potentials. On downside, the immediate support is 1795, below this area may resume the decline to 1777.

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    Support Level: 134.60 - 133.60 - 131.60 Resistance Level: 136.00 - 137.00 - 138.00

    USD/JPY

    • The USD/JPY collapsed after the release of US inflation data. The pair dropped from 137.60 to as low as 134.60, reaching the lowest level in a week and approaching the multi-month low of 133.58. It bounced modestly and ended Tuesday at around 135.60, still bearish in the daily chart.
    • The US Consumer Price Index rose in November by 0.1%, below the 0.3% of market consensus. The annual rate fell from 7.7% to 7.1%, reaching the lowest level in almost a year. Inflation numbers eased expectations about the future path of Fed rate hikes.
    • Following the numbers the US dollar collapsed across the board and the Japanese Yen soared, boosted by a rally in Treasuries. US bond yields sank with the US 10-year falling from 3.60% to 3.43%. The DXY is falling by 1.15% under 104.00.
    • The USD/JPY pair stabilized around 135.60,  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 developing below longer ones, indicating bears not exhausted.  On upside, overcome 136.00 may encourage bulls to challenge 137.00, break above that level will open the gate to 138.00.
    • 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 134.60, break below this level will open the gate to 133.60 area.

    Support Level: 33900 - 33700 - 33430 Resistance Level: 34350 - 34600 - 34950

    DJI

    • DJI made a strong rally after the release of US CPI, advanced to intraday 34953 level. However, it failed to hold most of gains and back to34150 to ended Tuesday, up for the day and bullish in the daily chart. The price stabilized above 20 and 50 SMA, suggests bullish strength in short term. Meanwhile, 20 SMA continued accelerating north and developing above 50 SMA, suggests bulls not exhausted yet. On upside, overcome 34350 may encourage bulls to challenge 34600, break above this level will open the gate to 34950.
    • Technical indicators indicates the bullish strength. RSI stabilized around 54, while the Momentum indicator stabilized in positive territory, suggests upward potentials. On downside, the immediate support is 33900, break below this level will open the gate for more decline to 33700 area.

    Support Level: 79.00 -77.50 - 75.00 Resistance Level: 81.30 - 82.50 - 83.70

    BRENT

    • Brent continued the rally, advanced from intraday low 78.00 area to intraday high 81.30 level. It hold near the top and ended Tuesday at around 80.60, 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 continued accelerating north and developing above 50 SMA, indicating bullish bias. On upside, overcome 81.30 may encourage bulls to challenge 82.50, break above this level will open the gate to 83.70.
    • Technical indicators suggest the bullish movement, hovering above the midline. RSI stabilized at around 66, while the Momentum indicator stabilized above the midline, suggests upward potentials. On downside, the immediate support is 79.00, break below this level will open the gate for more decline to 77.50 area.

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