US CPI rates due out today

In the US we note that the CPI rates for November, are due out today, which are anticipated to come in lower than last month on a yoy basis, which could weigh on the dollar, as it may imply that inflationary pressures in the US economy may be easing. In the US Equities markets, we note that Google has lost the anti-trust lawsuit brought by Epic Games, the creators behind the popular game named “Fortnite”. The anti-trust lawsuit, claimed that Google’s (#GOOG) play store, operated as an illegal monopoly. The ruling could weigh on Google’s (#GOOG) stock price, as despite the actual store representing a small part of Google’s revenue, the possibility for other lawsuits and the potential reparations that may be awarded to Epic Games, could weigh on the company’s stock price,as it may impact the company’s revenue over a longer time period. In the commodities markets, we note that supply chain concerns may be rising, as Yemen’s Houthi rebel group continues its campaign, against naval vessels in the Red Sea and in the Gulf of Aden. According to AP, the latest attack was against an oil and chemical tanker named Strinda. The heightened volatility in the region could provide support to oil prices, should the attacks continue. Over, in Australia, RBA Governor Bullock stated that the bank was not falling behind in the global inflation fight, which may weaken the Aussie, should the apparent dovish sentiment be maintained. The UK’s GDP rate is due out in tomorrow’s European session, with market expectations anticipating the rate to come in lower than last month. A scenario, which could potentially weigh on the pound.

EUR/USD appears to be moving in a sideways fashion, after failing to break below support at 1.0745 (S1). We maintain a sideways bias for the pair and supporting our case is the RSI Indicator below our 4-hour chart which currently registers a figure near 50 implying a neutral market sentiment. Furthermore, the narrowing of the Bollinger bands imply low market volatility. For our neutral outlook to be maintained, we would like to see the pair remain confined between the 1.0745 (S1) support level and the 1.0815 (R1) resistance line. On the other hand, for a bearish outlook, we would like to see a clear break below the 1.0745 (S1) support level, with the next potential target for the bears being the 1.0665 (S2) support level. Lastly for a bullish outlook, we would like to see a break above the 1.0815 (R1) resistance line, with the next possible target for the bulls being the 1.0910 (R2) resistance ceiling.

WTICash, appears to be moving in an upward fashion, with the commodity having formed an upwards moving trendline, which was incepted on the 7^th of December. We maintain a bullish outlook for the commodity and supporting our case is the aforementioned upwards trendline. Yet the RSI indicator below our 4-Hour chart, currently registers a figure of 50, implying a neutral market sentiment, in addition to the Bollinger bands narrowing which imply low market volatility. Nonetheless, for our bullish outlook to continue, we would like to see a clear break above the 73.10 (R1) resistance line, with the next possible target for the bulls being the 78.59 (R2) resistance level. For a sideways bias, we would like to see the commodity remain confined between the 67.45 (S1) support level and the 73.10 (R1) resistance line. Lastly for a bearish outlook ,we would like to see a clear break below the 67.45 (S1) support level, with the next possible target for the bears being the 61.75 (S2) support base.

Other highlights for the day:

Today in the European session, besides the UK employment data we also note the release of Norway’s GDP rate for October and later on Germany’s ZEW indicators for December. In the American session, we highlight the US CPI rates for November, ECB board member McCaul is scheduled to speak and later on we get the API weekly crude oil inventories figure and New Zealand’s current account balance for Q3. During tomorrow’s Asian session, we note the release of Japan’s Tankan indexes for Q4.

EUR/USD H4 Chart

Support: 1.0745 (S1), 1.0665 (S2), 1.0535 (S3)

Resistance: 1.0815 (R1), 1.0910 (R2), 1.1005 (R3)

WTICash H4 Chart

Support: 67.45 (S1),  61.75  (S2), 55.00 (S3)

Resistance: 73.10 (R1), 78.59 (R2), 83.69 (R3)

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