1/11/2022 Daily Reports
Support Level: 0.9850 - 0.9780 - 0.9700 Resistance Level: 1.0000 - 1.0100- 1.0200
EUR/USD
- The single currency remains mired in the negative territory and drags EUR/USD to fresh multi-session lows below 0.9900 region at the beginning of the week. It ended Monday at around 0.9880, neutral to bullish in the daily chart.
- Equities in the US reflect a dampened market mood as traders brace for the Federal Reserve. The US economic data revealed the Chicago PMI and the Dallas Fed Manufacturing Index, both October readings, and disappointed investors. The Chicago PMI missed expectations at 45.2, less than the previous reading. Later, the Dallas Fed Manufacturing Index plunged to -19.2, lower than estimates, showing business conditions deteriorating for the sixth consecutive month.
- In the meantime, the Eurozone reported inflation for Germany, which sharply surprised the upside in October by 11.6% YoY, above estimates of 10.9%, weighing on the bloc’s figures. Meanwhile, the Eurozone Harmonized Index of Consumer Prices rose by 10.7% YoY, exceeding forecasts of 10.3%, but core figures kept unchanged. The core HICP increased by 5% YoY, as estimated.
- The EUR/USD pair is trading near the 0.9880, down for the day with the neutral to bullish stance in daily chart. The pair stabilized above all main SMAs, indicates bullish strength. Meanwhile, the 20 SMA started turning north and heading towards longer ones, suggests bulls not exhausted yet. On upside, the immediate resistance is 1.0000, break above this level will extend the advance to 1.0100.
- Technical readings in the daily chart support the neutral to bullish stances. The RSI indicators hovering near the midlines and stabilized around 50. The Momentum indicator stabilized in the positive territory, indicating upward potentials. On downside, the immediate support is 0.9850 and below this level will open the gate to 0.9780.
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Support Level: 1.1340 - 1.1200 - 1.1060 Resistance Level: 1.1650 - 1.1740 - 1.1870
GBP/USD
- Sterling’s reversal from last week’s highs at 1.1645 accelerated on Monday, reaching levels below 1.1500. The cable is on the defensive at the start of the week against a stronger USD ahead of the Fed’s monetary policy meeting.
- The positive impact triggered by the appointment of Rishi Sunak as British Prime Minister last week, which pushed the GBP to its highest levels in six weeks, seems to have waned. Bearing in mind the challenges ahead for the new cabinet, a sustained GBP rally was highly unlikely,
- Beyond that, the focus this week has moved to the US Federal Reserve’s monetary policy meeting. The bank is widely expected to deliver the fourth consecutive 0.75% rate hike next Wednesday, which is stimulating demand for the US dollar. The Bank of England is also expected to deliver another 0.75% hike on Thursday in an attempt to tame the soaring inflation pressures. The market, however, seems reluctant to place large GBP bets.
- The GBP/USD offers bullish stance in daily chart. Cable still stabilized above 20 and 50 SMAs, indicating bullish strength in short term. Meanwhile, the 20 SMA continued accelerating north and heading towards longer ones, suggests bulls not exhausted yet. On upside, The immediate resistance is 1.1650 with a break above it exposing to 1.1740.
- Technical readings in the daily chart support the bullish stances. RSI indicator stabilized around 54, while the Momentum indicator stabilized above the midline, suggesting upward potentials. On downside, the immediate support is 1.1340, unable to defend this level will resume the decline to 1.1200.
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Support Level: 1614 - 1600- 1570 Resistance Level: 1675 - 1686 - 1700
XAU/USD
- Gold price slides for the second consecutive day as the US dollar advances, ahead of the FOMC meeting, which is widely expected to deliver the last jumbo-size rate hike of the US central bank, amidst growing speculation for a Fed pivot, while recession fears increased. At the time of writing, the XAU/USD is trading at $1,633 a troy ounce, down by 0.40%.
- Global equities remain under pressure. Inflation in the Eurozone reached a record high of 10.7% amidst an ongoing economic slowdown in the block, which weakened the EUR, and underpinned the USD. The greenback got bolstered by US Treasury yields rising, while the 3-month/10-year yield curve spread briefly inverted during the last week.
- Data-wise, the US economic docket featured the Chicago PMI, which decreased to 45.20, below estimates of 47, adding to the list of Federal Reserve regional indices, painting a recessionary scenario. Of late, the Dallas Fed Manufacturing Business Index dropped below 0 to -19.4, lower than estimates of -17.4.
- Gold price stabilized around 1633, down for the day and bearish in the daily chart. The gold price stabilized below 20 and 50 SMA, suggesting bearish strength. Meanwhile, the 20 SMA continued developing below longer ones despite it started turning flat, indicating bears not exhausted yet. On upside, the immediate resistance is 1675, break above this level will open the gate to extend the advance to 1686 area.
- From a technical perspective, the RSI indicator hold below the midline and stabilized around 40, suggesting bearish strength. The Momentum indicator struggled below the midline, suggests downward potentials. On downside, the immediate support is 1614, below this area may resume the decline to 1600.
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Support Level: 147.70 - 146.70 - 145.00 Resistance Level: 149.70 - 151.00 - 152.00
USD/JPY
- The USD/JPY is rising on Monday for the second day in a row and reached a six-day high at 148.85, before pulling back to the 148.70 area. The yen is among the worst performers even as equity markets in the US decline.
- The Japanese yen continues to be undermined by the fact that the Bank of Japan held interest rates at record lows on Friday and reiterated that it will continue to guide the 10-year bond yield at 0%. The central bank reaffirmed the need for accommodative policy amid economic headwinds stemming from the resurgence of COVID-19 cases in China and global recession fears. This, along with some follow-through US dollar buying interest continues to lend support to the USD/JPY pair.
- The Fed is scheduled to announce its monetary policy decision on Wednesday and investors will look for fresh clues about the future rate-hike path. Hence, the focus will remain on the accompanying policy statement and the post-meeting press conference. This will influence the USD price dynamics and help determine the next leg of a directional move for the USD/JPY pair. In the meantime, elevated US bond yields should act as a tailwind for the USD amid absent relevant economic data.
- The USD/JPY pair stabilized around 148.70, up for the day and bullish in the daily chart. The price still maintains the upward slope and stabilized above all main SMAs, suggests bullish strength in short term. Meanwhile, 20 SMA continued accelerating north and developing above longer ones, indicating bulls not exhausted. On upside, overcome 149.70 may encourage bulls to challenge 151.00, break above that level will open the gate to 152.00.
- Technical indicators suggest the bullish strength. RSI stabilized around 62, while the Momentum indicator continued developing above the midline, suggests upward potentials. On downside, the immediate support is 147.70, break below this level will open the gate to 145.00 area.
Support Level: 32600 - 32330 - 32000 Resistance Level: 33000 - 33300 - 33530
DJI
- DJI consolidated in the tight range, retreated from intraday high 33000 area to 32620 daily low. It recovered some losses and ended Monday at around 32780, down for the day and bullish in the hourly chart. It struggled near 20 SMA but far above 50 SMA, suggests bullish strength. Meanwhile, the pair still maintains the upward slope and 20 SMA continued developing above longer one, suggests bulls not exhausted yet. On upside, overcome 33000 may encourage bulls to challenge 33300, break above this level will open the gate to 33530.
- Technical indicators suggest the bullish strength. RSI stabilized around 54, while the Momentum indicator stabilized below the midline, suggests downward potentials. On downside, the immediate support is 32600, break below this level will open the gate for more decline to 32330 area.
Support Level: 91.40 -90.40 - 89.00 Resistance Level: 93.70 - 95.30 - 97.00
BRENT
- Brent still under the sell pressure , tumbled from intraday high 94.35 to intraday low 91.46, it recovered some losses and ended Monday at around 92.66, 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 continued accelerating south and developing below 50 SMA, indicating bears not exhausted yet. On upside, overcome 93.70 may encourage bulls to challenge 95.30, break above this level will open the gate to 97.00.
- Technical indicators suggest the bearish movement, hovering below the midline. RSI stabilized around 47, while the Momentum indicator stabilized in negative territory, suggests downward potentials. On downside, the immediate support is 91.40, break below this level will open the gate for more decline to 90.40 area.
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