17/11/2022 Daily Reports
EUR/USD
ØThe EURUSD extends its gains for the second consecutive day but struggles to hurdle 1.0440 and retraces. The release of an upbeat Retail Sales report for the United States capped the Euro (EUR) gains, as the major slid below 1.0400. At the time of writing, the EURUSD is trading at 1.0371, above its opening price by 0.22%.
ØSentiment remains negative, as shown by US equities trading with losses. A report from the US Department of Commerce (DoC) showed consumers’ resilience amidst one of the most aggressive tightening cycles by the Federal Reserve (Fed). October’s Retail Sales jumped by 1.3% MoM, vs. 1% estimations, the largest increase in eight months. Regarding the control group used for Gross Domestic Product (GDP) calculations, sales grew by 0.7% MoM against a 0.3% forecast.
ØLater, US Industrial Production plunged from September’s 0.1% to -0.1% MoM, missing estimates of a 0.2% increase. After the reports, Federal Reserve officials expressed that inflation and higher rates are needed. They added that moderation to interest-rate increases could happen soon, though they emphasized that they need work to do. It should be noted that Kansas City Fed President Esther George said in an interview with the Wall Street Journal (WSJ) said it would be hard to lower inflation without triggering a recession.
ØThe EUR/USD pair is trading near the 1.0385, 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 1.0480, break above this level will extend the advance to 1.0600.
ØTechnical readings in the daily chart support the bullish stances. The RSI indicators hovering above the midlines and stabilized around 70. The Momentum indicator stabilized above the midline, indicating upward potentials. On downside, the immediate support is 1.0270 and below this level will open the gate to 1.0200.
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GBP/USD
ØThe GBPUSD climbed following the release of mixed US economic data from the United States, while also a slew of Bank of England (BoE) Governors crossed newswires after a red-hot UK CPI report. At the time of writing, the GBPUSD is trading at 1.1910, registering gains of 0.18% after hitting a daily high of 1.1941.
ØUS stocks are trading in the red after a solid US Retail Sales report. The US Department of Commerce (DoC) reported that sales grew the most in eight months, with readings hitting 1.3% MoM vs. 1% estimated by analysts. Digging deep into the report, Retail Sales in the control group, used to calculate Gross Domestic Product (GDP), expanded by 0.7% MoM vs. 0.3% foreseen.
ØOn the UK front, the Consumer Price Index for October jumped 11.1% YoY, smashing estimates of 10.7%, reported the Office for National Statistics (ONS). Notably, the inflation report comes one day before Chancellor Jeremy Hunt unveils the Autumn Budget, which is expected to show a “fiscally responsible” government under the new Prime Minister (PM) Rishi Sunak.
ØThe GBP/USD offers bullish stance in daily chart. Cable 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 1.2030 with a break above it exposing to 1.2150.
ØTechnical readings in the daily chart support the bullish stances. RSI indicator stabilized around 63, while the Momentum indicator stabilized above the midline, suggesting upward potentials. On downside, the immediate support is 1.1790, unable to defend this level will resume the decline to 1.1650.
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XAU/USD
ØGold attracts some dip-buying near the $1,770 area on Wednesday and steadily climbs back closer to its highest level since mid-August touched the previous day. The XAUUSD holds steady above the $1,780 level through the early North American session, though a slight recovery in the risk sentiment keeps a lid on any further gains.
ØThe US Dollar (USD) fails to capitalize on the overnight bounce from a three-month low and meets with a fresh supply, which, in turn, offers some support to the dollar-denominated Gold. The markets now seem convinced that the Federal Reserve (Fed) will hike interest rates at a slower pace in the coming months amid signs of easing inflationary pressures. The speculations were fueled by a surprise drop in US consumer inflation during October. Furthermore, Tuesday’s softer PPI reinforces the peak inflation narrative and continues to weigh on the buck.
ØThe repricing of the pace of the Fed’s rate-hiking cycle, meanwhile, keeps the US Treasury bond yields depressed. In fact, the yield on the benchmark 10-year US government bond languishes near its lowest level for the yield since October 5. This is seen as another factor undermining the USD and leading additional support to the non-yielding yellow metal. The intraday uptick, however, lacks bullish conviction. This, in turn, makes it prudent to wait for some follow-through buying before traders start positioning for any extension of a two-week-old strong uptrend.
ØGold price stabilized around 1779, up for the day and bullish in the daily chart. The gold price stabilized above 20 and 50 SMA, suggesting bullish strength. Meanwhile, the 20 SMA started turning north and heading towards 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.
ØFrom a technical perspective, the RSI indicator hold above the midline and stabilized around 71, suggesting bullish strength. The Momentum indicator stabilized above the midline, suggests upward potentials. On downside, the immediate support is 1732, below this area may resume the decline to 1700.
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USD/JPY
ØThe USJPY is hovering around 139.40, marginally higher for the day, following the release of US economic data, on a relatively quiet session. The pair continues to stabilize after sharply moves last week.
ØUS data come in mixed to positive. Retail Sales in October rose 1.3%, the best reading in eight months. Industrial production dropped 0.1%, against expectations of an increase of 0.2; September numbers were revised lower from 0.4% to 0.1%.
ØThe numbers boosted the US Dollar but only modestly. The DXY remains in negative territory but above 106.00. While the US 2-year bond yield remains steady at 4.36%, the 10-year is at 3.73%, the lowest since October 22. The USDJPY spiked to 140.00 after retail sales but then dropped to as low as 139.03.
ØThe USD/JPY pair stabilized around 139.30, up for the day and bearish in the daily chart. The price still maintains the downward slope and upside got some resistance from 200 SMA, suggests bearish strength in short term. Meanwhile, 20 SMA started turning south and heading towards longer ones, indicating bears not exhausted. On upside, overcome 140.80 may encourage bulls to challenge 142.50, break above that level will open the gate to 145.30.
ØTechnical indicators suggest the bearish strength. RSI stabilized around 32, while the Momentum indicator continued developing below the midline, suggests downward potentials. On downside, the immediate support is 137.60, break below this level will open the gate to 136.00 area.
DJI
ØDJI consolidated in the familiar range from intraday high 33730 to intraday low 33460 and ended Wednesday at around 33600, unchanged for the day and neutral to bearish in the hourly chart. The price stabilized near 20 and 50 SMA, suggests directionless strength. Meanwhile, 20 and 50 SMA started turning flat but continued developing above 200 SMA, suggests bulls not exhausted in the long term yet. On upside, overcome 34030 may encourage bulls to challenge 34030, break above this level will open the gate to 34300.
ØTechnical indicators suggest the neutral to bearish strength. RSI stabilized around 48, while the Momentum indicator stabilized below the midline, suggests downward potentials. On downside, the immediate support is 33300, break below this level will open the gate for more decline to 33160 area.
BRENT
ØBrent under the sell pressure, retreated from intraday high 94.80 to intrade low 91.70 area, it then bounded modestly from the strong support area and ended Wednesday at around 92.60, down for the day and bearish in the hourly chart. The price stabilized below 20 and 50 SMA, suggests bearish strength in short term. Meanwhile, the 20 SMA started turning south and continued developing below longer ones, indicating bearish bias. On upside, overcome 94.80 may encourage bulls to challenge 95.70, break above this level will open the gate to 97.00.
ØTechnical indicators suggest the bearish movement, hovering below the midline. RSI stabilized at around 42, while the Momentum indicator stabilized below the midline, suggests downward potentials. On downside, the immediate support is 91.50, break below this level will open the gate for more decline to 90.00 area.
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