The market restarts its engines

The USD continued to weaken against its counterparts, on Friday and during today’s Asian session. The release of the preliminary S&P PMI figures for November on Friday implied a contraction of economic activity for the manufacturing sector which may have weighed on the USD, yet that was also countered by a better-than-expected reading for the services sector. The market in the US is restarting its engines after the long weekend with some construction industrial data while US stockmarkets may see an easing of interest given that the earnings season is slowly drawing to a close.

On a technical level, the AUD gained slightly against the USD on Friday yet remained well between the 0.6620 (R1) resistance line and the 0.6515 (S1) support level. We tend to maintain a bullish outlook for the pair’s direction, given the upward trendline guiding it since the 17^th of the month, yet there are signs of stabilisation, given that the price action is flirting with the upper Bollinger band, which may slow down the bulls and the RSI indicator is edging lower towards the reading of 50. Should the bulls maintain control over the pair as expected we may see AUD/USD breaking the 0.6620 (R1) resistance line and aim for the 0.6725 (R2) resistance level. Should the bears take over, we may see the pair breaking the prementioned upward trendline in a first sign of an interruption of the upward movement and continue lower to break the 0.6515 (S1) support line, with the next target for the bears being the 0.6400 (S2) support level.

On the commodities front, we note the OPEC meeting in the week and there are reports about a possible compromise between Saudi Arabia and African producers. We expect that any signs of an agreement being reached may imply a retreat of Saudi Arabia’s side and that may weaken oil’s price.

WTI’s price, edged lower during today’s Asian session and is currently testing the 75.00 (S1) support line. Despite the apparent sideways motion after breaking the downward trendline guiding it on the 20^th of November, some bearish tendencies seem to be present as the commodity’s price continues to test the 75.00 (S1) support line repeatedly and the RSI indicator has slipped below the reading of 50 and is aiming for the reading of 30. Should the bears actually take over and the commodity’s price abandon its current sideways motion, we may see WTI’s price breaking the 75.00 (S1) support line and aim for the 70.00 (S2) support level.      

Other highlights for the day:

Today in the European session we note the release of the UK’s CBI distributive trades for November and in the American session we get from the US, October’s new home sales figure and November’s Dallas manufacturing index. During tomorrow’s Asian session, we get Australia’s retail sales for October and on the monetary front, BoE Deputy Governor Ramsden and RBA Governor Michelle Bullock are scheduled to speak.

As for the rest of the week:

On Tuesday we get Australia’s October retail sales and from the US the consumer confidence for November. On Wednesday we get Germany’s preliminary HICP rate for November and we highlight the release of the revised US GDP rate for Q3. On Thursday we get Japan’s preliminary industrial output for October, Australia’s building approvals and CapEx rates for October and Q3 respectively, China’s NBS PMI figures for November, Turkey’s GDP for Q3, the UK’s Nationwide house prices for November, France’s final GDP rate for Q3 and preliminary HICP rates for November, Switzerland’s KOF indicator for November, Eurozone’s preliminary HICP rates for November,  Canada’s Business Barometer for November and we highlight for Loonie traders the GDP rate for Q3, while from the US we get the Consumption rate and the Core PCE price index for October, as well as the weekly initial jobless claims figure. On Friday, we get China’s Caixin manufacturing PMI figure, Canada’s employment data and the US ISM manufacturing PMI figure all being for November.

AUD/USD 4 Hour Chart

Support: 0.6515 (S1), 0.6400 (S2), 0.6285 (S3)

Resistance: 0.6620 (R1), 0.6725 (R2), 0.6820 (R3)

WTI 4 Hour Chart

Support: 75.00 (S1), 70.00 (S2), 66.85 (S3)

Resistance: 79.65 (R1), 83.40 (R2), 87.50 (R3)

If you have any general queries or comments relating to this article please send an email directly to our Research team at research_team@ironfx.com

إخلاء المسؤولية:
لا تُعد هذه المعلومات نصيحة استثمارية أو توصية بالاستثمار، وإنما تُعد تواصلاً تسويقيًا. لا تتحمل IronFX أي مسؤولية عن أي بيانات أو معلومات مقدمة من أطراف ثالثة تم الإشارة إليها أو الارتباط بها في هذا التواصل.