RBNZ remains on hold

Over in Asia, the RBNZ earlier on today, remained on hold, as was widely expected by market participants, yet in the bank’s accompanying statement it was stated that “the OCR would likely need to increase further”, if inflationary pressures persist. As such, the potential for another rate hike may provide support for the Kiwi. During yesterday’s American session, the consumer confidence figures for November came in better than expected, implying that from the consumer’s side, the economic outlook for the US economy has improved, which may have provided some support for the dollar. Yet, Fed Governor Waller’s comments may be perceived as predominantly dovish in nature and as such could weigh on the dollar. BoE Governor Bailey hinted earlier today that the bank needs to continue its battle against inflation, to bring it down to the bank’s 2% target. The comments may provide support for the pound, as it may imply that the bank may maintain monetary policy restrictive, for a prolonged period of time. In the US Equities markets, we note that Apple (#AAPL) according to the WSJ, is terminating its credit card partnership with Goldman Sachs (#GS), which could weigh on the company’s stock price.

GBP/USD appears to be moving in an upwards direction, having formed an upwards-moving trendline which was incepted on the 10^th of November. We maintain a bullish outlook for the pair and supporting our case is the aforementioned trendline, in addition to the RSI indicator below our 4-hour chart remaining near the figure of 70, implying a strong bullish market sentiment. Furthermore, despite the narrowing of the Bollinger bands, they appear to have formed an upward slope, implying some bullish tendencies.  For our bullish outlook to continue, we would like to see a break above the 1.2720 (R1) resistance line, with the next possible target for the bulls being the 1.2870 (R2) resistance level. On the other hand, for a sideways bias, we would like to see the pair remaining confined between the 1.2600 (S1) support level and the 1.2720 (R1) resistance line. Lastly, for a bearish outlook, we would like to see a clear break below the 1.2600 (S1) support level, with the next possible target for the bears being the 1.2475 (S2) support base.

WTICash appears to be moving in a sideways fashion, with the pair having failed to break above the 77.25 (R1) resistance line. We maintain a sideways bias for the commodity and supporting our case is the RSI Indicator below our 4-hour chart, currently registering a figure near 50, implying a neutral market sentiment, in addition to the narrowing of the Bollinger bands, which implies low market volatility. For our neutral outlook to continue, we would like to see the commodity remain confined between the 73.95 (S1) support level and the 77.25 (R1) resistance line. On the other hand, for a bearish outlook, we would like to see a clear break below the 73.95 (S1) support level, with the next possible target for the bears being the 69.65 (S2) support base. Lastly, for a bullish outlook, we would like to see a clear break above the 77.25 (R1) resistance level, with the next possible target for the bulls being the 80.70 (R2) resistance ceiling.

Other highlights for the day:

Today in the European session, we get Sweden’s final GDP rate for Q3, the Eurozone’s Business climate and final consumer confidence, both for November and we highlight the release of Germany’s preliminary HICP Rate for November. In the American session highlight the release of the revised US GDP rate for Q3 and Canada’s current account balance for Q3, while oil traders may be more interested in the release of weekly US EIA crude oil inventories. On the monetary front, we note that Richmond Fed President Barkin, BoE Governor Andrew Bailey and Cleveland Fed President Mester are scheduled to speak. During tomorrow’s Asian session, we note the release of Japan’s preliminary industrial output for October, Australia’s building approvals for October and Capital expenditure for Q3, as well as China’s NBS PMI figures for November, while BoJ’s board member Nakamura speaks.

GBP/USD 4 Hour Chart

Support: 1.2600 (S1), 1.2475 (S2), 1.2340 (S3)

Resistance: 1.2720 (R1), 1.2870 (R2), 1.2990 (R3)

WTICash 4 Hour Chart

Support: 73.95 (S1), 69.65 (S2), 65.15 (S3)

Resistance: 77.25 (R1), 80.70 (R2), 85.40 (R3)

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