22/12/2022 Daily Reports
EUR/USD
ØThe EUR/USD continues to move without a clear direction. It printed a fresh daily low at 1.0595 and then rebounded back above 1.0600 to ended the day at around 1.0610, still bullish in the daily chart.
ØRisk sentiment prevailed after the numbers and even US bond yields. The US 10-year bond yield stands at 3.68% after rebounding from 3.62% while the 2-year bond yield climbed from under 4.20% to 4.23%. In Europe, bond yields also rebounded, helping EUR/USD remain sideways.
ØExisting Home Sales dropped in November for the 10th straight month to an annual rate of 4.09 million, below the 4.20 million of market consensus. A different report showed the Conference Board Consumer Confidence Index rose in December to 108.3 beating market estimates.
ØThe EUR/USD pair is trading near the 1.0610, unchanged 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 1.0660, break above this level will extend the advance to 1.0740.
ØTechnical readings in the daily chart support the bullish stances. The RSI indicators hovering above the midline and stabilized around 64. The Momentum indicator stabilized above the midline, indicating upward potentials. On downside, the immediate support is 1.0570 and below this level will open the gate to 1.0500.
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GBP/USD
ØGBP/USD is making a fresh breakout low in North American trade on Wednesday. GBP/USD is down by some 0.7% to 1.2090 having travelled from a high of 1.2191 to a low of 1.2055, neutral in the daily chart.
ØThe pound dropped as British public borrowing hit a November record, underscoring the challenges for the UK economy. Meanwhile, the greenback is picking up a safe haven bid as investors worry that an upcoming recession could keep the Federal Reserve from holding interest rates at higher levels in the FOMC’s projections last week to tame inflation.
ØOn the other hand, the pair continues to be undermined by a dovish outcome from the Bank of England (BoE) meeting, where two MPC members voted to keep rates unchanged. This, along with growing recession fears, further contributes to the offered tone surrounding the GBP/USD pair.
ØThe GBP/USD offers neutral stance in daily chart. Cable stabilized between 20 and 50 SMA, indicating neutral strength in short term. However, the 20 SMA continued developing above longer ones despite it started turning flat, suggests bulls not exhausted yet. On upside, The immediate resistance is 1.2250 with a break above it exposing to 1.2340.
ØTechnical readings in the daily chart support the bullish stances. RSI indicator stabilized around 51, while the Momentum indicator stabilized near the midline, suggesting directionless potentials. On downside, the immediate support is 1.2050, unable to defend this level will resume the decline to 1.1900.
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XAU/USD
ØGold price stays pressured around the intraday low of $1,814 as traders consolidate the biggest daily gain in three weeks heading into the end of the day, still bullish in the daily chart.
ØEarlier in the day, hopes for China’s more investment, due to the World Bank’s cutting of growth forecasts for the dragon nation and the policymakers’ readiness to battle the recession fears, favor the market sentiment. On the same line could be the US Senate’s advancement of the $1.66 trillion government spending bill, as well as Japan’s upbeat economic forecasts.
ØIt should be observed that the US Treasury bond yields remain firmer even as the stocks and other riskier assets trim recent gains. The reason could be linked to the cautious mood ahead of today’s US Conference Board (CB) Consumer Confidence figures for December, expected at 101.00 versus 100.00 prior.
ØGold price stabilized around 1814, down 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 1825, break above this level will open the gate for more advance to 1848 area.
ØFrom a technical perspective, the RSI indicator hold above the midline and stabilized around 62, suggesting bullish strength. The Momentum indicator stabilized above the midline, suggests upward potentials. On downside, the immediate support is 1798, below this area may resume the decline to 1784.
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USD/JPY
ØUSD/JPY is licking its wound just above the 131.50 support, as bears bide time before resuming the downtrend. The positive shift in risk sentiment and stabilizing US Dollar, as well as, the Treasury yields, are doing little to put a floor under the USD/JPY pair. The pair ended the day at around 132.20, still bearish in the daily chart.
ØThe currency pair remains vulnerable amid mixed comments from Japanese authorities on the Bank of Japan’s (BoJ) surprise policy move. The BoJ stunned markets on Tuesday, with an unexpected revision to its yield control policy, which fuelled a massive 3.8% surge in the Japanese Yen against US Dollar.
ØBank of Japan shocked markets on Tuesday with a surprising tweak to its bond yield control. The BoJ has adjusted the terms around long-term interest rates, allowing them to rise more in a move aimed at easing some of the costs of prolonged monetary stimulus.
ØThe USD/JPY pair stabilized around 132.20, up 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 132.90 may encourage bulls to challenge 133.70, break above that level will open the gate to 134.60.
ØTechnical indicators suggest the bearish strength. RSI stabilized around 33, while the Momentum indicator continued developing below the midline, suggests downward potentials. On downside, the immediate support is 131.50, break below this level will open the gate to 130.50 area.
DJI
ØDJI continued the advance, climbed from intraday low 33150 to high 33640. It retreated modestly and ended Wednesday at 33570, 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 33650 may encourage bulls to challenge 34000, break above this level will open the gate to 34340.
ØTechnical indicators suggests the bullish strength. RSI stabilized at around 68, while the Momentum indicator stabilized in positive territory, suggests upward potentials. On downside, the immediate support is 33300, break below this level will open the gate for more decline to 33000 area.
BRENT
ØBrent continued the advance, climbed from intraday low 79.55 to intraday high 82.52. It hold near the top and ended Wednesday at around 82.30, 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 bulls not exhausted yet. On upside, overcome 83.20 may encourage bulls to challenge 83.70, break above this level will open the gate to 85.20.
ØTechnical indicators suggest the bullish movement, hovering above the midline. RSI stabilized at around 70, while the Momentum indicator stabilized in positive territory, suggests upward potentials. On downside, the immediate support is 81.40, break below this level will open the gate for more decline to 80.80 area.
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