• Prior +0.2%
• GDP +1.2% vs +1.3% y/y prelim
• Prior +1.0%

French GDP is confirmed to have expanded by 0.4% in Q3, with the breakdown as per the following:

This article was written by Justin Low at www.forexlive.com.

Global Markets:

•  Asian Stock Markets : Nikkei down 0.48%, Shanghai Composite down 1.14%, Hang Seng up 0.2% ASX down 0.1%
• Commodities : Gold at $2687.35 (0.94%), Silver at $31.19 (1.28%), Brent Oil at $72.74 (-0.06%), WTI Oil at $69.27 (0.29%)
• Rates : US 10-year yield at 4.234, UK 10-year yield at 4.271, Germany 10-year yield at 2.1245

News & Data:

• (CAD) Current Account -3.2B vs -8.6B expected

Markets Update:

Asia-Pacific markets saw mixed performance on Friday, with most losing ground led by South Korea’s stocks following weak industrial production data. South Korea’s industrial production declined by 0.3% month-on-month in October, matching September’s drop. However, on a year-on-year basis, production increased by 2.3% in October, rebounding from a 1.3% fall in September.

The Kospi index dropped 1.29%, and the small-cap Kosdaq fell 1.87%. In contrast, Hong Kong’s Hang Seng index gained 1.29%, while mainland China’s CSI 300 rose 2%, leading regional gains. The rise coincided with a Reuters poll suggesting that China’s home prices may decline at a slower pace through 2025 and stabilize in 2026, as support measures take effect.

Meanwhile, Japan’s Tokyo inflation data showed the headline rate rebounded to 2.6% in November from 1.8% in October. Core inflation, excluding fresh food costs, rose to 2.2%, slightly exceeding expectations. Tokyo’s inflation trends are seen as a precursor for nationwide patterns. Following the release, Japan’s Nikkei 225 fell 0.42%, while the Topix index slipped 0.2%.

Australia’s S&P/ASX 200 recorded a minor loss of 0.14%.

U.S. markets remained closed on Thursday for Thanksgiving and will operate for a shortened trading session on Friday.

Upcoming Events: 

• 01:30 PM GMT – CAD GDP m/m

The post Friday 29th November 2024: Asia-Pacific Markets Dip as South Korea Slips, China Leads Gains first appeared on IC Markets | Official Blog.

• Prior +1.2%

That’s a big miss in German retail sales with the drag largely stemming from non-food retail trade, which fell by 2.2% on the month. Despite a better showing at the end of Q3, the drag here highlights the ongoing struggles for the German consumer ahead of the holiday period.

This article was written by Justin Low at www.forexlive.com.

• Prior -0.4%

The jump here is broad-based but also owes a little to energy prices. If you strip that out, import prices were still seen up but by 0.4% on the month. Looking at the breakdown, there were increases in the price for consumer goods (+0.5%), durable goods (+0.4%), intermediate goods (+0.5%), and capital goods (+0.2%).

This article was written by Justin Low at www.forexlive.com.

IC Markets Asia Fundamental Forecast | 29 November 2024

What happened in the Asia session?

In the Asia session today, the forex market experienced notable movements. The USD/JPY saw a rise, reflecting broader dollar strength, influenced by the US Treasury yields climbing. Meanwhile, AUD/USD faced pressure, with weaker-than-expected domestic economic data weighing on the Australian dollar. The EUR/USD traded within a narrow range, with market sentiment largely influenced by expectations of the ECB’s next steps amid inflation concerns. GBP/USD also showed mixed performance, reflecting the market’s cautious outlook on UK economic recovery. Overall, traders remained cautious as they awaited further developments in global economic conditions, especially from the US and Europe.

What does it mean for the Europe & US sessions?

The strong U.S. economic data and dollar strength are expected to influence the Asia session by maintaining upward pressure on the U.S. dollar against Asian currencies like the Japanese Yen (JPY), Chinese Yuan (CNY), and Australian Dollar (AUD). While USD/JPY may continue to rise, safe-haven assets such as the Yen and gold could strengthen if risk-off sentiment prevails. Asian equity markets are likely to open cautiously due to lingering concerns about tighter U.S. monetary policy.

The Federal Reserve’s hawkish stance may compel Asian central banks to avoid aggressive easing to prevent currency depreciation. Meanwhile, commodity-linked currencies like the AUD and NZD may face headwinds if subdued risk sentiment persists or China’s economic outlook dampens demand.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

In the absence of major economic news, the U.S. Dollar Index (DXY) is likely to experience limited volatility, with movements primarily influenced by technical factors and market sentiment –  the support and resistance levels for today.

Support: 105.441

Resistance: 106.521

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to lower the Federal Funds Rate target range by 25 basis points to 4.50% to 4.75% on 7th November.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while labour market conditions have generally eased, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 17 to 18 December 2024.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

In the absence of major news, gold prices today may experience modest fluctuations driven by market sentiment, technical factors, and broader economic trends –  the support and resistance levels for today.

Support: 2606.39

Resistance: 2656.94

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

When there’s no major news, the Australian Dollar (AUD) typically follows market sentiment driven by broader economic factors like commodity prices, global risk appetite, and U.S. dollar strength. The AUD is heavily influenced by Australia’s key exports, such as iron ore and gold, so fluctuations in global commodity markets can lead to price movements –   the support and resistance levels for today.

Support: 0.6442

Resistance: 0.6541

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 5th November, marking the eighth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance but the forecasts published in today’s Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026.
• Headline inflation was 2.8% over the year to the September quarter, down from 3.8% over the year to the June quarter; this was as expected due to declines in fuel and electricity prices in the September quarter.
• However, this decline reflects a temporary cost of living relief; abstracting from these effects, underlying inflation (as represented by the trimmed mean) was 3.5% over the year to the September quarter and is still some way from the 2.5% midpoint of the inflation target.
• Growth in output has been weak as past declines in real disposable incomes and the ongoing effect of restrictive financial conditions continue to weigh on household consumption, particularly discretionary consumption.
• However, growth in aggregate consumer demand, which includes spending by temporary residents such as students and tourists, has remained more resilient.
• A range of indicators suggest that labour market conditions remain tight, and while conditions have been easing gradually, some indicators have recently stabilised.
• Employment grew strongly over the three months to September, by an average of 0.4% per month but the unemployment rate was 4.1% in September, up from the trough of 3.5% in late 2022.
• While headline inflation has declined substantially and will remain lower for a time, underlying inflation is more indicative of inflation momentum, and it remains too high while the November SMP forecasts suggest that it will be some time yet before inflation is sustainably in the target range and approaching the midpoint.
• This reinforces the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out.
• Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range and it will continue to rely upon the data and the evolving assessment of risks to guide its decisions.
• Next meeting is on 10 December 2024.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Without major news events, NZD’s movement today is likely to be driven by technical factors, market sentiment, and overall risk appetite –  the support and resistance levels for today.

Support: 0.5862

Resistance: 0.5937

Central Bank Notes:

• The Monetary Policy Committee agreed to reduce the OCR by 50 basis points, bringing it down to 4.75% in October as inflation converges to target.
• The Committee assesses that annual consumer price inflation is within its 1 to 3% inflation target range and converging on the 2% midpoint.
• Economic activity in New Zealand is subdued, in part due to restrictive monetary policy while business investment and consumer spending have been weak, and employment conditions continue to soften.
• The economy is now in a position of excess capacity, encouraging price- and wage-setting to adjust to a low-inflation economy; lower import prices have assisted the disinflation.
• High-frequency indicators point to continued subdued growth in the near term, mostly due to weak consumer spending and business investment while labour market conditions are expected to ease further, with filled jobs and advertised vacancy rates continuing to decline.
• The Committee confirmed that future changes to the OCR would depend on its evolving assessment of the economy.
• Next meeting is on 27 November 2024.

Next 24 Hours Bias

Medium Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

JPY is expected to trade within 149.135 – 151.603 today, influenced by key economic events that strengthen USD/JPY – the support and resistance levels for today.

Support: 149.13

Resistance: 151.60

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 31st October, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) is likely to be at around 2.5% for fiscal 2024 and then be at around 2% for fiscal 2025 and 2026.
• While the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices are expected to wane, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• Comparing the projections with those presented in the previous Outlook for Economic Activity and Prices (Outlook Report), the projected real GDP growth rates are more or less unchanged. The projected year-on-year rate of increase in the CPI (all items less fresh food) for fiscal 2025 is somewhat lower due to factors such as the recent decline in crude oil and other resource prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 19 December 2024.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

EUR is expected to trade within 1.05168 – 1.07111 today, influenced by key economic events that strengthen USD/JPY – the support and resistance levels for today.

Support: 1.0516

Resistance: 1.0646

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 17th October to mark the second successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.40%, 3.65% and 3.25% respectively.
• The incoming information on inflation shows that the disinflationary process is well on track while the inflation outlook is also affected by recent downside surprises in indicators of economic activity.
• Inflation is expected to rise in the coming months, before declining to target in the course of next year. Domestic inflation remains high, as wages are still rising at an elevated pace. At the same time, labour cost pressures are set to continue easing gradually, with profits partially buffering their impact on inflation.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 12 December 2024.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

CHF is expected to trade within 0.8765 – 0.8855  today, influenced by key economic events that strengthen USD/JPY – the support and resistance levels for today.

Support: 0.8765

Resistance: 0.8855

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the third consecutive meeting, going from 1.25% to 1.00% in September.
• Inflationary pressure has again decreased significantly compared to the previous quarter, reflecting the appreciation of the Swiss franc over the last three months.
• Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
• The new conditional inflation forecast is significantly lower than that of June: 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026, based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
• Swiss GDP growth was solid in the second quarter of 2024 as momentum in the chemicals/pharmaceuticals industry was particularly strong.
• However, growth is likely to remain rather modest in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
• Next meeting is on 12 December 2024.

Next 24 Hours Bias

Medium Bearish

The Pound (GBP)

Key news events today

BOE Gov Bailey Speaks (11:00 am GMT)

What can we expect from GBP today?

With Bank of England Governor Andrew Bailey speaking at 11:00 am GMT today, expect GBP to be sensitive to his comments, particularly regarding inflation, interest rates, and economic recovery. Bailey’s remarks could provide insights into the BOE’s stance on current monetary policy, particularly after recent rate hikes or discussions about future adjustments. If he signals concerns about economic slowdowns or hints at a dovish stance, the GBP could weaken, especially against currencies like the USD. Conversely, if his comments suggest ongoing confidence in the economy or a potential for tightening measures, GBP may strengthen.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to reduce the Bank Rate by 25 basis points, to 4.75% on 7th November 2024 – one member preferred to maintain the Bank rate at 5.0%.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024.
• Twelve-month CPI inflation fell to 1.7% in September but is expected to increase to around 2.5% by the end of the year as weakness in energy prices falls out of the annual comparison; services consumer price inflation has declined to 4.9%.
• CPI inflation is expected to increase to around 2.75% by the second half of 2025 as weakness in energy prices falls out of the annual comparison, revealing more clearly the continuing persistence of domestic inflationary pressures.
• The MPC’s latest projections for activity and inflation are also set out in the accompanying November Report; this forecast is based on the second case where CPI inflation is projected to fall back to around the 2% target in the medium term as a margin of slack emerges later in the forecast period that acts against second-round effects in domestic prices and wages.
• GDP had grown by 0.5% in 2024 Q2, 0.2% weaker than had been expected in the August Report, and 0.1% weaker than the earlier outturn had indicated at the time of the MPC’s previous meeting. Through the second half of 2024, GDP was projected to grow at a somewhat slower rate than in Q2 – headline GDP growth is expected to fall back to its recent underlying pace of around 0.25% per quarter over the second half of this year.
• The combined effects of the measures announced in Autumn Budget 2024 are provisionally expected to boost the level of GDP by around 0.75% at their peak in a year’s time, relative to the August projections, while the Budget is provisionally expected to boost CPI inflation by just under 0.5% at the peak.
• Annual private sector regular average weekly earnings growth has continued to fall but remained elevated at 4.8% in the three months to August; the MPC judges that the labour market continues to loosen, although it appears relatively tight by historical standards.
• Based on the evolving evidence, a gradual approach to removing policy restraint remains appropriate but monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• Next meeting is on 19 December 2024.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

GDP m/m (1:30 pm GMT)

What can we expect from CAD today?

The GDP m/m release at 1:30 pm GMT will provide crucial insights into Canada’s economic health. A stronger-than-expected GDP could push the CAD higher, as it signals growth and potential rate hikes by the Bank of Canada. Conversely, a weaker result may weigh on the CAD, suggesting a slowdown and reduced rate hike expectations. 

Given the recent inflation and employment trends, the market’s reaction could be swift, especially if the GDP deviates significantly from expectations. Expect heightened volatility around the release.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.75% while continuing its policy of balance sheet normalization on 23rd October; this marked the fourth consecutive meeting where rates were reduced.
• Canada’s economy grew at around 2% in the first half of the year and growth of 1.75% is expected in the second half; consumption has continued to grow but is declining on a per person basis while exports have been boosted by the opening of the Trans Mountain Expansion pipeline.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.3% in 2026 – as the economy strengthens, excess supply is gradually absorbed.
• The labour market remains soft with unemployment at 6.5% in September while wage growth remains elevated relative to productivity growth. Overall, the economy continues to be in excess supply.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• Excess supply elsewhere in the economy has reduced inflation in the prices of many goods and services while the drop in global oil prices has led to lower gasoline prices – these factors have all combined to bring inflation down.
• The Bank expects inflation to remain close to the target over the projection horizon, with the upward and downward pressures on inflation roughly balancing out; the upward pressure from shelter and other services gradually diminishes, and the downward pressure on inflation recedes as excess supply in the economy is absorbed.
• With inflation now back around the 2% target, the Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range.
• If the economy evolves broadly in line with the latest forecast, further reduction of the policy rate can be expected but the timing and pace of additional reductions in the policy rate will be guided by incoming information and assessment of its implications for the inflation outlook.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• Next meeting is on 11 December 2024.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

With no major news events today, oil prices may remain relatively stable, driven by technical factors and market sentiment – the support and resistance levels for today.

Support: 68.34

Resistance: 70.78

Next 24 Hours Bias

Medium Bullish

The post IC Markets Europe Fundamental Forecast | 29 November 2024 first appeared on IC Markets | Official Blog.

The yen is the main mover so far on the day, after Tokyo inflation showed signs of speeding up. That being said, it is worth noting that the higher figures also owes in part to the ending of government energy subsidies. So, there’s that. Nonetheless, traders are taking it at face value with the BOJ potentially looking to use that as an excuse to act in December.

Elsewhere, the dollar is marginally lower as it eases back following a steadier showing yesterday. But that follows from a much poorer showing on the eve of Thanksgiving, with month-end flows arguably a factor in play.

Looking to the session ahead, there will be quite a number of items on the economic calendar in Europe today.

The main focus though will be on the Eurozone CPI data. Headline annual inflation is expected to nudge higher but so is core annual inflation. If anything, it reaffirms a more bumpy path back towards the 2% target for the ECB. And that should likely ease bets of a 50 bps move in December, aligning with a more gradual path of moving by 25 bps instead.

As for the day itself, US markets are open again but expect liquidity conditions to still be lighter than usual as the Thanksgiving holiday period tends to carry through until the weekend.

0700 GMT – Germany October import price index0700 GMT – Germany October retail sales data0745 GMT – France Q3 final GDP figures0745 GMT – France November preliminary CPI figures0800 GMT – Switzerland Q3 GDP figures0800 GMT – Switzerland November KOF leading indicator index0855 GMT – Germany November unemployment change, rate0930 GMT – UK October mortgage approvals, credit data1000 GMT – Italy November preliminary CPI figures1000 GMT – Eurozone November preliminary CPI figures

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

This article was written by Justin Low at www.forexlive.com.

The Japanese yen is the lead gainer on the day, helped by stronger Tokyo inflation data earlier here. The higher price figures owe to the ending of government energy subsidies though, so there’s that to consider. Nonetheless, it still spooked traders into pricing in higher odds of the BOJ hiking rates in December. That sent USD/JPY down to test the 150.00 mark, where it is seen thereabouts now.

The pair is dragged down to also test its 61.8 Fib retracement level at 150.18 with the 150.00 mark also in play. Further below, there is added support from the 100-day moving average (red line) at 149.11. Those are the key technical levels in play at the moment, in terms of downside levels.

On the month itself, the pair is now seen down a little over 1% as it snaps the rebound from October. The dollar itself is also arguably plagued by some month-end shenanigans this week. But looking to December, central bank decisions will be the key focus.

The Fed and BOJ may both end up being more hawkish than as currently anticipated. So, there are potential upside risks to both the dollar and the yen. However, given the circumstances, the BOJ definitely has more propensity to surprise. That said, it could go either way for them.

For now though, traders will look to be more wary. But as the chart shows, sellers are favoured at the moment but are facing up against a couple of key technical points on the week. Looking to the month ahead, the first key risk event will be the US jobs report next week. So, mark that down in your calendars.

This article was written by Justin Low at www.forexlive.com.

The precious metal endured a poor start to the week but has recovered quite nicely since. The drop on Monday didn’t even touch $2,600 before buyers stepped in around the 38.2 Fib retracement level of the rebound in the week before. That led to a bit of a tussle around the key hourly moving averages after. But today, buyers are finding renewed conviction in chasing a move higher:

With the push higher today, we’re seeing price action nudge back above both its 100 (red line) and 200-hour (blue line) moving averages. That suggests a more bullish near-term bias once again for gold.

On the month itself, gold is down by just 3% now. And that sets up its biggest monthly drop since September last year. It sounds “bad” but since then, this is only the precious metal’s third monthly decline out of fourteen. So, there’s your added context.

In any case, buyers are definitely continuing to show up on any dips and that is something to take note of.

Looking to December and January, these are typically months where gold tends to shine the brightest. However, with gold having already gained nearly 30% this year, does it justify even stronger gains based on the seasonal tailwind alone? That might be a tough one to figure out.

A key tail risk for gold is the same as what we saw earlier this week. That is you may never know what kind of volatility Trump may induce to markets. And he will be taking office on 20 January 2025. But one can reasonably expect him to start his agenda pushing at any point once we get to the new year.

Besides that, the Fed outlook will also remain one to watch. But as has been the case for gold this year, it can still rally strongly no matter the change in the odds. And with a more structurally bullish outlook still in place, it still presents a strong argument for gold to keep moving higher next year.

So, is there a thing as starting too early? We’ll see.

This article was written by Justin Low at www.forexlive.com.

DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a bearish continuation toward the 1st support 

Pivot: 106.57
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 105.43
Supporting reasons: Identified as a pullback support that aligns with the 61.8% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 108.62
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could potentially make a bullish continuation toward the 1st resistance.

Pivot: 1.0527

Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 1.0335

Supporting reasons: Identified as a swing low support, indicating a potential level where price could find support once more.

1st resistance: 1.0646
Supporting reasons: Identified as a pullback resistance close to 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

EUR/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation toward the 1st support 

Pivot: 160.58
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 157.38

Supporting reasons: Identified as a pullback support that aligns with 78.6% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 162.06
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 0.8376

Supporting reasons: Identified as an overlap resistance close to 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.8266

Supporting reasons: Identified as a swing low support, indicating a potential level where price could find support once more.

1st resistance: 0.8452
Supporting reasons: Identified as a multi swing high resistance, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 1.2735

Supporting reasons: Identified as a pullback resistance close to 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 1.2615

Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support once more.

1st resistance:  1.2858
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 192.86

Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 189.90
Supporting reasons: Identified as an overlap support close to 61.8% Fibonacci projection, indicating a key level where price could find support once more.

1st resistance: 195.63
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 0.8855

Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 0.8765
Supporting reasons: Identified as a pullback support close to 127.2% Fibonacci extension, indicating a potential level where price could find support once more.

1st resistance: 0.8917
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 150.83

Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 149.13
Supporting reasons: Identified as an overlap support close to 50% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 152.26
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

USD/CAD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation toward the 1st support 

Pivot: 1.4088
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 1.3955
Supporting reasons: Identified as pullback support close to 61.8% Fibonacci retracement, indicating a key level where price could find support once more.

1st resistance: 1.4178
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish continuation toward the 1st resistance.

Pivot: 0.6484

Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 0.6440
Supporting reasons: Identified as a swing-low support, suggesting a key support area where price could find support once again.

1st resistance: 0.6557
Supporting reasons: Identified as a pullback resistance close to 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish continuation toward the 1st resistance.

Pivot: 0.5867

Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 0.5816
Supporting reasons: Identified as a swing low support, suggesting a key support area where price could find support.

1st resistance: 0.5935
Supporting reasons: Identified as an overlap resistance close to 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish continuation toward the 1st resistance.

Pivot: 44,524.83

Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 43,330.61

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support.

1st resistance: 45,536.44

Supporting reasons: Aligns with the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish continuation toward the 1st resistance.

Pivot: 19,159.78

Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 18,910.28

Supporting reasons: Identified as a multi-swing low support, indicating a key level where price could find support once more.

1st resistance: 19,680.84
Supporting reasons: Identified as a swing-high resistance close to 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish continuation toward the 1st resistance.

Pivot: 5,965.82

Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 5,872,10

Supporting reasons: Identified as an overlap support that aligns with a 50% Fibonacci retracement, indicating a potential level where price could find support again.

1st resistance: 6,143.88
Supporting reasons: Aligns with 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a bearish breakout off the pivot and fall toward the 1st support.

Pivot: 97,227.20
Supporting reasons: Identified as an overlap resistance close to 78.6% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 91,788.09
Supporting reasons: Identified as an overlap support that aligns with the 23.6% Fibonacci retracement, indicating a potential level where price could find support.

1st resistance: 99,462.79
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 3,740.72

Supporting reasons: Identified as an overlap resistance close to 161.8% Fibonacci extension, indicating a potential area where selling pressures could intensify.

1st support: 3,486.97
Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support once again

1st resistance: 3893.83
Supporting reasons:  Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise toward the 1st resistance

Pivot: 68.23
Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to stage a rebound

1st support: 66.76
Supporting reasons: Identified as a swing-low support, indicating a key level where price could find support once again.

1st resistance: 70.78
Supporting reasons: Identified as a pullback resistance that aligns with a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 2684.07

Supporting reasons: Identified as a pullback resistance close to 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 2607.07

Supporting reasons: Identified as an overlap support that aligns with 61.8% Fibonacci retracement, indicating a potential level where price could find support.

1st resistance: 2728.19
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

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The post Friday 29th November 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 29 November 2024

What happened in the U.S. session?

the U.S. forex session saw the dollar strengthen following robust economic data. Q3 GDP growth beat expectations at 3.8%, highlighting a resilient U.S. economy. Weekly jobless claims remained low, signaling a strong labor market, while the Consumer Confidence Index, though slightly below forecast, reflected positive sentiment.

Key currency movements included declines in EUR/USD and GBP/USD as the dollar gained strength. USD/JPY rose amid improved risk sentiment and robust U.S. data, while AUD/USD weakened due to global risk concerns and weaker Chinese economic outlook.

What does it mean for the Asia Session?

The strong U.S. economic data and dollar strength are expected to influence the Asia session by maintaining upward pressure on the U.S. dollar against Asian currencies like the Japanese Yen (JPY), Chinese Yuan (CNY), and Australian Dollar (AUD). While USD/JPY may continue to rise, safe-haven assets such as the Yen and gold could strengthen if risk-off sentiment prevails. Asian equity markets are likely to open cautiously due to lingering concerns about tighter U.S. monetary policy.

The Federal Reserve’s hawkish stance may compel Asian central banks to avoid aggressive easing to prevent currency depreciation. Meanwhile, commodity-linked currencies like the AUD and NZD may face headwinds if subdued risk sentiment persists or China’s economic outlook dampens demand.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

In the absence of major economic news, the U.S. Dollar Index (DXY) is likely to experience limited volatility, with movements primarily influenced by technical factors and market sentiment –  the support and resistance levels for today.

Support: 105.441

Resistance: 106.521

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to lower the Federal Funds Rate target range by 25 basis points to 4.50% to 4.75% on 7th November.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while labour market conditions have generally eased, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 17 to 18 December 2024.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

In the absence of major news, gold prices today may experience modest fluctuations driven by market sentiment, technical factors, and broader economic trends –  the support and resistance levels for today.

Support: 2606.39

Resistance: 2656.94

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

When there’s no major news, the Australian Dollar (AUD) typically follows market sentiment driven by broader economic factors like commodity prices, global risk appetite, and U.S. dollar strength. The AUD is heavily influenced by Australia’s key exports, such as iron ore and gold, so fluctuations in global commodity markets can lead to price movements –   the support and resistance levels for today.

Support: 0.6442

Resistance: 0.6541

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 5th November, marking the eighth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance but the forecasts published in today’s Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026.
• Headline inflation was 2.8% over the year to the September quarter, down from 3.8% over the year to the June quarter; this was as expected due to declines in fuel and electricity prices in the September quarter.
• However, this decline reflects a temporary cost of living relief; abstracting from these effects, underlying inflation (as represented by the trimmed mean) was 3.5% over the year to the September quarter and is still some way from the 2.5% midpoint of the inflation target.
• Growth in output has been weak as past declines in real disposable incomes and the ongoing effect of restrictive financial conditions continue to weigh on household consumption, particularly discretionary consumption.
• However, growth in aggregate consumer demand, which includes spending by temporary residents such as students and tourists, has remained more resilient.
• A range of indicators suggest that labour market conditions remain tight, and while conditions have been easing gradually, some indicators have recently stabilised.
• Employment grew strongly over the three months to September, by an average of 0.4% per month but the unemployment rate was 4.1% in September, up from the trough of 3.5% in late 2022.
• While headline inflation has declined substantially and will remain lower for a time, underlying inflation is more indicative of inflation momentum, and it remains too high while the November SMP forecasts suggest that it will be some time yet before inflation is sustainably in the target range and approaching the midpoint.
• This reinforces the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out.
• Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range and it will continue to rely upon the data and the evolving assessment of risks to guide its decisions.
• Next meeting is on 10 December 2024.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Without major news events, NZD’s movement today is likely to be driven by technical factors, market sentiment, and overall risk appetite –  the support and resistance levels for today.

Support: 0.5862

Resistance: 0.5937

Central Bank Notes:

• The Monetary Policy Committee agreed to reduce the OCR by 50 basis points, bringing it down to 4.75% in October as inflation converges to target.
• The Committee assesses that annual consumer price inflation is within its 1 to 3% inflation target range and converging on the 2% midpoint.
• Economic activity in New Zealand is subdued, in part due to restrictive monetary policy while business investment and consumer spending have been weak, and employment conditions continue to soften.
• The economy is now in a position of excess capacity, encouraging price- and wage-setting to adjust to a low-inflation economy; lower import prices have assisted the disinflation.
• High-frequency indicators point to continued subdued growth in the near term, mostly due to weak consumer spending and business investment while labour market conditions are expected to ease further, with filled jobs and advertised vacancy rates continuing to decline.
• The Committee confirmed that future changes to the OCR would depend on its evolving assessment of the economy.
• Next meeting is on 27 November 2024.

Next 24 Hours Bias

Medium Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

JPY is expected to trade within 149.135 – 151.603 today, influenced by key economic events that strengthen USD/JPY – the support and resistance levels for today.

Support: 149.13

Resistance: 151.60

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 31st October, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) is likely to be at around 2.5% for fiscal 2024 and then be at around 2% for fiscal 2025 and 2026.
• While the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices are expected to wane, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• Comparing the projections with those presented in the previous Outlook for Economic Activity and Prices (Outlook Report), the projected real GDP growth rates are more or less unchanged. The projected year-on-year rate of increase in the CPI (all items less fresh food) for fiscal 2025 is somewhat lower due to factors such as the recent decline in crude oil and other resource prices.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 19 December 2024.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

EUR is expected to trade within 1.05168 – 1.07111 today, influenced by key economic events that strengthen USD/JPY – the support and resistance levels for today.

Support: 1.0516

Resistance: 1.0646

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 17th October to mark the second successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.40%, 3.65% and 3.25% respectively.
• The incoming information on inflation shows that the disinflationary process is well on track while the inflation outlook is also affected by recent downside surprises in indicators of economic activity.
• Inflation is expected to rise in the coming months, before declining to target in the course of next year. Domestic inflation remains high, as wages are still rising at an elevated pace. At the same time, labour cost pressures are set to continue easing gradually, with profits partially buffering their impact on inflation.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 12 December 2024.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

CHF is expected to trade within 0.8765 – 0.8855  today, influenced by key economic events that strengthen USD/JPY – the support and resistance levels for today.

Support: 0.8765

Resistance: 0.8855

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the third consecutive meeting, going from 1.25% to 1.00% in September.
• Inflationary pressure has again decreased significantly compared to the previous quarter, reflecting the appreciation of the Swiss franc over the last three months.
• Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
• The new conditional inflation forecast is significantly lower than that of June: 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026, based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
• Swiss GDP growth was solid in the second quarter of 2024 as momentum in the chemicals/pharmaceuticals industry was particularly strong.
• However, growth is likely to remain rather modest in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
• Next meeting is on 12 December 2024.

Next 24 Hours Bias

Medium Bearish

The Pound (GBP)

Key news events today

BOE Gov Bailey Speaks (11:00 am GMT)

What can we expect from GBP today?

With Bank of England Governor Andrew Bailey speaking at 11:00 am GMT today, expect GBP to be sensitive to his comments, particularly regarding inflation, interest rates, and economic recovery. Bailey’s remarks could provide insights into the BOE’s stance on current monetary policy, particularly after recent rate hikes or discussions about future adjustments. If he signals concerns about economic slowdowns or hints at a dovish stance, the GBP could weaken, especially against currencies like the USD. Conversely, if his comments suggest ongoing confidence in the economy or a potential for tightening measures, GBP may strengthen.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to reduce the Bank Rate by 25 basis points, to 4.75% on 7th November 2024 – one member preferred to maintain the Bank rate at 5.0%.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024.
• Twelve-month CPI inflation fell to 1.7% in September but is expected to increase to around 2.5% by the end of the year as weakness in energy prices falls out of the annual comparison; services consumer price inflation has declined to 4.9%.
• CPI inflation is expected to increase to around 2.75% by the second half of 2025 as weakness in energy prices falls out of the annual comparison, revealing more clearly the continuing persistence of domestic inflationary pressures.
• The MPC’s latest projections for activity and inflation are also set out in the accompanying November Report; this forecast is based on the second case where CPI inflation is projected to fall back to around the 2% target in the medium term as a margin of slack emerges later in the forecast period that acts against second-round effects in domestic prices and wages.
• GDP had grown by 0.5% in 2024 Q2, 0.2% weaker than had been expected in the August Report, and 0.1% weaker than the earlier outturn had indicated at the time of the MPC’s previous meeting. Through the second half of 2024, GDP was projected to grow at a somewhat slower rate than in Q2 – headline GDP growth is expected to fall back to its recent underlying pace of around 0.25% per quarter over the second half of this year.
• The combined effects of the measures announced in Autumn Budget 2024 are provisionally expected to boost the level of GDP by around 0.75% at their peak in a year’s time, relative to the August projections, while the Budget is provisionally expected to boost CPI inflation by just under 0.5% at the peak.
• Annual private sector regular average weekly earnings growth has continued to fall but remained elevated at 4.8% in the three months to August; the MPC judges that the labour market continues to loosen, although it appears relatively tight by historical standards.
• Based on the evolving evidence, a gradual approach to removing policy restraint remains appropriate but monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• Next meeting is on 19 December 2024.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

GDP m/m (1:30 pm GMT)

What can we expect from CAD today?

The GDP m/m release at 1:30 pm GMT will provide crucial insights into Canada’s economic health. A stronger-than-expected GDP could push the CAD higher, as it signals growth and potential rate hikes by the Bank of Canada. Conversely, a weaker result may weigh on the CAD, suggesting a slowdown and reduced rate hike expectations. 

Given the recent inflation and employment trends, the market’s reaction could be swift, especially if the GDP deviates significantly from expectations. Expect heightened volatility around the release.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.75% while continuing its policy of balance sheet normalization on 23rd October; this marked the fourth consecutive meeting where rates were reduced.
• Canada’s economy grew at around 2% in the first half of the year and growth of 1.75% is expected in the second half; consumption has continued to grow but is declining on a per person basis while exports have been boosted by the opening of the Trans Mountain Expansion pipeline.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.3% in 2026 – as the economy strengthens, excess supply is gradually absorbed.
• The labour market remains soft with unemployment at 6.5% in September while wage growth remains elevated relative to productivity growth. Overall, the economy continues to be in excess supply.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• Excess supply elsewhere in the economy has reduced inflation in the prices of many goods and services while the drop in global oil prices has led to lower gasoline prices – these factors have all combined to bring inflation down.
• The Bank expects inflation to remain close to the target over the projection horizon, with the upward and downward pressures on inflation roughly balancing out; the upward pressure from shelter and other services gradually diminishes, and the downward pressure on inflation recedes as excess supply in the economy is absorbed.
• With inflation now back around the 2% target, the Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range.
• If the economy evolves broadly in line with the latest forecast, further reduction of the policy rate can be expected but the timing and pace of additional reductions in the policy rate will be guided by incoming information and assessment of its implications for the inflation outlook.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• Next meeting is on 11 December 2024.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

With no major news events today, oil prices may remain relatively stable, driven by technical factors and market sentiment – the support and resistance levels for today.

Support: 68.34

Resistance: 70.78

Next 24 Hours Bias

Medium Bullish

The post IC Markets Asia Fundamental Forecast | 29 November 2024 first appeared on IC Markets | Official Blog.

• Deutsche Bank flags rising risks to December Fed rate cut, signals extended policy pause
• ECB vice president Luis de Guindos is speaking on Friday
• China official PMI data due this weekend – manufacturing and services expansion expected
• Tokyo inflation acceleration – recapping the yen supportive data published earlier
• The potential for a December Federal Reserve rate cut cited for gold price bounce
• PBOC sets USD/ CNY reference rate for today at 7.1877 (vs. estimate at 7.2244)
• Japan will provide up to 100bn yen support for semiconductors and more
• USD losses continue – USD/JPY under 150.70
• Australian October 2024 Private Sector Credit +0.6% m/m (expected +0.5%)
• Reforms afoot at the Reserve Bank of Australia could complicate rate cut outlook
• Japan October Industrial Output +3.0% m/m (exp +3.9%) Retail sales +1.6% y/y (exp +2.2%)
• USD/JPY towards 151.10 – the drop began before the CPI data officially published
• Tokyo area November inflation data, a big jump higher: Headline 2.6% y/y (prior 1.8%)
• More on this revised RBNZ forecast from ANZ now expect the RBNZ to cut by 50bp in February
• ANZ now expect the RBNZ to cut by 50bp in February (revised from 25pb cut)
• ANZ revise RBA forecast – now expect first cut in May (from February )
• Q1 2025 outlook: inflation pressures will rise, Fed likely to stop cutting rates earlier
• ICYMI – RBA Gov Bullock ruled out a rate cut
• Happy Thanksgiving to all our American readers
• New Zealand November consumer confidence jumps to 99.8 (prior 91.2)
• Trade ideas thread – Friday, 29 November, insightful charts, technical analysis, ideas

USD/JPY
traded to under 150.00 following November inflation data from Tokyo.
The data is in the post above, but the highlights:

• consumer
  prices excluding fresh food (referred to to as the core rate) for the
  Tokyo metropolitan area accelerated for the first time in 3 months
• energy
  prices increased due to the effects of government energy subsidies
  expiring (however there is a new support measure being rolled in from
  January)
• service
  prices, closely watched by the Bank of Japan, rose 0.9%, a little
  faster than October’s 0.8% increase

The
higher readings encouraged the view that the Bank of Japan will hike
at its December 18-19 meeting and the yen rocketed higher against the
USD and crosses. USD/JPY fell, briefly, to lows under 150.00. Its
back just above there as I update.

Other
data from Japan were not quite so positive (but other data is taking a back
seat to inflation data):

• industrial output and retail sales were both
  disappointing.

Apart
from yen, other major FX traded in small ranges only, with a generally
slightly weaker USD.

Note
that over the weekend China’s National Bureau of Statistics (NBS)
will publish November official PMIs (preview in points above).

This article was written by Eamonn Sheridan at www.forexlive.com.

PMIs from China’s National Bureau of Statistics (NBS) are due on Saturday, November 30, 2024 at 0130 GMT (which is 2030 GMT on Friday, November 29, 2024)

In October 2024, these indicators showed signs of stabilization, with both manufacturing and non-manufacturing sectors returning to expansion territory. Key highlights include:

Manufacturing Sector:

• Manufacturing PMI: The Purchasing Managers’ Index (PMI) for the manufacturing sector rose to 50.1 in October, up from 49.8 in September, marking the first expansion since April. A PMI above 50 indicates growth.

• Sub-Indices Performance:

  • Production Index: Increased to 52.0, the highest in six months, indicating accelerated manufacturing activity.
  • New Orders Index: Stabilized at 50.0 after five months of decline, suggesting steady demand.
  • Employment Index: Improved slightly to 48.4 from 48.2, though still indicating contraction.
  • Input Prices Index: Rose to 53.4, the first increase in four months, reflecting higher raw material costs.

Non-Manufacturing Sector:

• Non-Manufacturing PMI: Increased to 50.2 in October from 50.0 in September, indicating modest growth in services and construction activities.

• Service Sector: The sub-index for services rose to 50.1, up from 49.9, showing a slight expansion.

• Construction Sector: The sub-index decreased to 50.4 from 50.7, indicating a slowdown in growth.

Composite PMI:

• General PMI: The NBS Composite PMI Output Index rose to 50.8 in October from 50.4 in September, marking the highest level since May, suggesting an overall improvement in economic activity.

October PMI readings suggest a tentative recovery in China’s economic activities, supported by government stimulus measures, though certain sectors continue to face headwinds.

**

China has two primary Purchasing Managers’ Index (PMI) surveys – the official PMI released by the National Bureau of Statistics (NBS) and the Caixin China PMI published by the media company Caixin and research firm Markit / S&P Global.

• The official PMI survey covers large and state-owned companies, while the Caixin PMI survey covers small and medium-sized enterprises. As a result, the Caixin PMI is considered to be a more reliable indicator of the performance of China’s private sector.
• Another difference between the two surveys is their methodology. The Caixin PMI survey uses a broader sample of companies than the official survey.
• Despite these differences, the two surveys often provide similar readings on China’s manufacturing sector.

The Caixin PMIs will follow next week.

This article was written by Eamonn Sheridan at www.forexlive.com.