IC Markets Asia Fundamental Forecast |

 4 December 2024

What happened in the Asia session?

The Asia session in the forex market saw the Japanese yen weaken as the U.S. dollar gained support. USD/JPY continued to trend upward, driven by expectations of further U.S. Federal Reserve rate hikes

The Australian and New Zealand dollars were impacted by commodity price fluctuations, with both currencies showing slight weakness. Market participants remained cautious ahead of key U.S. economic data releases, with investors focusing on inflation and employment reports.  

What does it mean for the Europe & US sessions?

For the European session, expect volatility in EUR/USD, GBP/USD, and USD/CHF as economic data and geopolitical events influence sentiment. Key data releases could include German Ifo Business Climate Index or updates on inflation or economic activity across the EU. Market participants will likely be reacting to economic data and potential geopolitical concerns, especially in light of any recent events in the Eurozone or broader Europe.

In the US session, we could see moves in USD/JPY, EUR/USD, and USD/CHF, with attention on any US economic reports, including Jobless Claims or updates on inflation or consumer sentiment. With ongoing discussions on the US Federal Reserve’s monetary policy, traders will be watching for any indications on interest rate movements or comments from Federal Reserve officials.

Expect heightened volatility around economic releases and central bank announcements in both sessions, with potential movements in risk-on or risk-off sentiment, especially if global events like inflation concerns, geopolitical risk, or central bank actions come into play.

The Dollar Index (DXY)

Key news events today

ADP Non-Farm Employment Change  (1:15 pm GMT)

ISM Services PMI  (3:00 pm GMT)

Fed Chair Powell Speaks  (6:45 pm GMT)

What can we expect from DXY today?

ADP Non-Farm Employment Change 

The ADP report, a precursor to the official employment figures, showed private businesses added 233,000 jobs in October 2024, surpassing forecasts of 110,000. A similar or higher figure for November could signal a robust labor market, potentially strengthening the dollar as it may lead the Federal Reserve to maintain or raise interest rates. 

 ISM Services PM

In October 2024, the ISM Services PMI unexpectedly rose to 56, indicating strong expansion in the services sector. If November’s data continues this trend, it could bolster confidence in the U.S. economy, supporting the dollar. Conversely, a decline might raise concerns about economic momentum, potentially weakening the dollar. 

Fed Chair Powell’s Speech 

Chair Jerome Powell’s remarks will be scrutinized for insights into future monetary policy. Hawkish comments suggest that a focus on controlling inflation could strengthen the dollar, while dovish tones emphasize that economic support might lead to dollar depreciation.

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

ADP Non-Farm Employment Change  (1:15 pm GMT)

ISM Services PMI  (3:00 pm GMT)

Fed Chair Powell Speaks  (6:45 pm GMT)

What can we expect from Gold today?

Gold has recently experienced significant movements, reaching a record high of $2,800 per ounce in October 2024 before declining. Analysts anticipate that gold could average around $2,950 in 2025, driven by factors such as geopolitical tensions and central bank purchases.

Today’s economic indicators and Fed commentary are likely to influence gold prices. Positive economic data and hawkish Fed signals may strengthen the dollar, leading to lower gold prices. Conversely, weaker data and dovish remarks could support gold. Investors should monitor these developments closely to inform their strategies.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

GDP q/q  (12:30 am GMT)

What can we expect from AUD today?

Australia’s GDP grew by 0.3% in the September quarter, below the anticipated 0.5%, marking the slowest annual growth rate since the pandemic. This underperformance led to a 0.3% decline in the Australian dollar against the U.S. dollar. 

The subdued growth, primarily driven by government spending amid stagnant household consumption, may prompt the Reserve Bank of Australia to consider interest rate cuts earlier than planned. 

Investors should monitor the RBA’s policy signals and global economic conditions, as these factors could influence the Australian dollar’s trajectory in the near term.

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 Bearish

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: 0.5814

Resistance: 0.5935

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

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Without major news events, JPY’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: 147.21

Resistance: 150.75

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 Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Without major news events, EUR’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: 1.0390

Resistance: 1.0607

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 Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Without major news events, CHF’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: 0.8773

Resistance: 0.8903

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

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Without major news events, GBP’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: 1.2612

Resistance: 1.2755

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

No major news events.

What can we expect from CAD today?

Without major news events, CAD’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: 1.3959

Resistance: 1.4094

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: 69.67

Resistance: 71.48

Next 24 Hours Bias

Medium Bullish

The post IC Markets Europe Fundamental Forecast | 4 December 2024 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 0.08%, Shanghai Composite up 0.07%, Hang Seng up 0.34% ASX down 0.38%
• Commodities : Gold at $2670.35 (0.14%), Silver at $31.49 (0.18%), Brent Oil at $73.74 (0.26%), WTI Oil at $70.27 (0.19%)
• Rates : US 10-year yield at 4.231, UK 10-year yield at 4.242, Germany 10-year yield at 2.055

News & Data:

• (USD) JOLTS Job Openings 7.74M vs 7.51M expected

Markets Update:

South Korean markets faced a turbulent opening on Wednesday following a day of political unrest. President Yoon Suk Yeol briefly imposed martial law before lifting it, triggering a 1.8% drop in the Kospi index and a 2.4% decline in the Kosdaq. Protestors and opposition parties intensified their calls for Yoon’s resignation, while a coalition of opposition lawmakers is set to propose an impeachment bill. Reports also indicated that Yoon’s chief of staff and senior secretaries have offered to resign collectively.

In response to fears of financial instability, the Bank of Korea held an emergency meeting, pledging measures to stabilize the market. It committed to boosting short-term liquidity and providing special loans if needed. Additionally, South Korea’s financial regulator announced its readiness to deploy a 10 trillion won ($7.07 billion) stock market stabilization fund. Foreign exchange authorities were also suspected of intervening in the currency market to limit the Korean won’s decline.

The political developments in South Korea reverberated across Asia-Pacific markets. Japan’s Nikkei 225 and Topix indices both fell by 0.4%, while Hong Kong’s Hang Seng index edged up 0.1%. Mainland China’s CSI 300 slipped 0.2%, and Australia’s S&P/ASX 200 declined 0.38% as slower-than-expected third-quarter GDP growth weighed on sentiment. Elevated borrowing costs and persistent inflation were cited as key factors affecting Australia’s economy.

In the U.S., South Korea’s political turmoil impacted the iShares MSCI South Korea ETF (EWY), which tracks South Korean stocks. The ETF plunged 7% to a 52-week low before recovering to close down 1.6%. Meanwhile, the S&P 500 inched up 0.05%, the Nasdaq gained 0.4%, and the Dow dropped 0.2%, reflecting mixed investor sentiment amid the global uncertainty.

Upcoming Events: 

• 01:15 PM GMT – USD ADP Non – Farm Employment Change
• 03:00 PM GMT – USD ISM Services PMI
• 06:45 PM GMT – USD Fed Chair Powell Speaks

The post Wednesday 4th December 2024: South Korean Markets Plunge Amid Political Turmoil  first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

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: 106.58

Supporting reasons: Identified as an overlap resistance close to 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 105.25
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: 107.57
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 1.0532
Supporting reasons: Identified as an overlap resistance close to 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 1.0390

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

1st resistance: 1.0604
Supporting reasons: Identified as an overlap resistance, 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 reaction off the pivot and drop toward the 1st support 

Pivot: 158.19

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

1st support: 155.54

Supporting reasons: Identified as a swing low support close to 161.8% Fibonacci extension, indicating a potential level where price could find support once more.

1st resistance: 160.49
Supporting reasons: Identified as a pullback 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 continuation toward the 1st support 

Pivot: 0.8309

Supporting reasons: Identified as a pullback resistance close to 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.8267

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

1st resistance: 0.8375
Supporting reasons: Identified as an overlap resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 1.2612
Supporting reasons: Identified as an overlap support close to 50% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound

1st support: 1.2491

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

1st resistance:  1.2755
Supporting reasons: Identified as a pullback resistance close to 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 188.05
Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 184.32
Supporting reasons: Identified as a swing low support, indicating a key level where price could find support once more.

1st resistance: 190.94
Supporting reasons: Identified as an overlap 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: 0.8903

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

1st support: 0.8773
Supporting reasons: Identified as a pullback support close to 50% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 0.8958
Supporting reasons: Identified as a swing high 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 continuation toward the 1st support 

Pivot: 150.75
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures, indicating a potential area where selling pressures could intensify.

1st support: 147.21
Supporting reasons: Identified as a pullback support close to 61.8% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 153.31
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 reaction off the pivot and drop toward the 1st support 

Pivot: 1.4094

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

1st support: 1.3959
Supporting reasons: Identified as overlap support close to 61.8% Fibonacci retracement, indicating a key level where price could find support once more.

1st resistance: 1.4176
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

AUD/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: 0.6504

Supporting reasons: Identified as an overlap resistance close to 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.6447
Supporting reasons: Identified as a swing-low support, suggesting a key support area where price could find support once again.

1st resistance: 0.6620
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 0.5935
Supporting reasons: Identified as an overlap resistance close to 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.5814
Supporting reasons: Identified as a swing low support, suggesting a key support area where price could find support.

1st resistance: 0.6027
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 44,971.98

Supporting reasons: Identified as a swing high resistance that aligns with the 127.2% Fibonacci extension, indicating a potential area where selling pressures could intensify.

1st support: 44,339.53

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

1st resistance: 45,573.41

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 bounce off the pivot and rise toward the 1st resistance

Pivot: 19,944.30
Supporting reasons: Identified as a pullback support, indicating a potential area where buying interests could pick up to stage a rebound

1st support: 19,680.81

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

1st resistance: 20,203.66
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: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 6,077.93

Supporting reasons: Aligns with 127.2% Fibonacci extension, indicating a potential area where selling pressures could intensify.

1st support: 6,013.39

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

1st resistance: 6,148.32
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 reaction off the pivot and drop toward the 1st support 

Pivot: 96,200.63

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

1st support: 91,814.94
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support.

1st resistance: 99,465.75
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: 3,725.84

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

1st support: 3,546.69
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: 3,881.01
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: 69.63
Supporting reasons: Identified as a pullback support, indicating a potential area where buying interests could pick up to stage a rebound

1st support:  68.028
Supporting reasons: Identified as an overlap support that aligns with 78.6% Fibonacci retracement, indicating a key level where price could find support once again.

1st resistance: 71.49
Supporting reasons: Identified as a swing high resistance, 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 continuation toward the 1st support 

Pivot: 2664.65
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 2599.91

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

1st resistance: 2713.65
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

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The post Wednesday 4th December 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast |

 4 December 2024

What happened in the U.S. session?

The euro rose modestly against the U.S. dollar, trading around $1.0507, as traders sought protection against potential price swings amid political turmoil in France, where Prime Minister Michel Barnier faced a vote of no confidence

The U.S. Dollar Index (DXY) closed slightly lower at 106.33 on December 3, 2024, after briefly rising due to an increase in U.S. job openings to 7.744 million in October, indicating strong labor demand. This development suggests that the U.S. labor market remains robust, which could lead to expectations of sustained or higher interest rates by the Federal Reserve.

What does it mean for the Asia Session?

A stable yet strong dollar may exert downward pressure on Asian currencies, potentially leading to depreciation against the USD. This dynamic could result in tighter financial conditions in Asia, as local currencies weaken and import costs rise, impacting inflation and economic growth in the region. Investors should monitor central bank responses and economic indicators across Asian economies to assess potential interventions or policy adjustments aimed at stabilizing their currencies and mitigating adverse effects on their markets.

The Dollar Index (DXY)

Key news events today

ADP Non-Farm Employment Change  (1:15 pm GMT)

ISM Services PMI  (3:00 pm GMT)

Fed Chair Powell Speaks  (6:45 pm GMT)

What can we expect from DXY today?

ADP Non-Farm Employment Change 

The ADP report, a precursor to the official employment figures, showed private businesses added 233,000 jobs in October 2024, surpassing forecasts of 110,000. A similar or higher figure for November could signal a robust labor market, potentially strengthening the dollar as it may lead the Federal Reserve to maintain or raise interest rates. 

 ISM Services PM

In October 2024, the ISM Services PMI unexpectedly rose to 56, indicating strong expansion in the services sector. If November’s data continues this trend, it could bolster confidence in the U.S. economy, supporting the dollar. Conversely, a decline might raise concerns about economic momentum, potentially weakening the dollar. 

Fed Chair Powell’s Speech 

Chair Jerome Powell’s remarks will be scrutinized for insights into future monetary policy. Hawkish comments suggest that a focus on controlling inflation could strengthen the dollar, while dovish tones emphasize that economic support might lead to dollar depreciation.

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

ADP Non-Farm Employment Change  (1:15 pm GMT)

ISM Services PMI  (3:00 pm GMT)

Fed Chair Powell Speaks  (6:45 pm GMT)

What can we expect from Gold today?

Gold has recently experienced significant movements, reaching a record high of $2,800 per ounce in October 2024 before declining. Analysts anticipate that gold could average around $2,950 in 2025, driven by factors such as geopolitical tensions and central bank purchases.

Today’s economic indicators and Fed commentary are likely to influence gold prices. Positive economic data and hawkish Fed signals may strengthen the dollar, leading to lower gold prices. Conversely, weaker data and dovish remarks could support gold. Investors should monitor these developments closely to inform their strategies.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

GDP q/q  (12:30 am GMT)

What can we expect from AUD today?

Australia’s GDP grew by 0.3% in the September quarter, below the anticipated 0.5%, marking the slowest annual growth rate since the pandemic. This underperformance led to a 0.3% decline in the Australian dollar against the U.S. dollar. 

The subdued growth, primarily driven by government spending amid stagnant household consumption, may prompt the Reserve Bank of Australia to consider interest rate cuts earlier than planned. 

Investors should monitor the RBA’s policy signals and global economic conditions, as these factors could influence the Australian dollar’s trajectory in the near term.

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 Bearish

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: 0.5814

Resistance: 0.5935

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

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Without major news events, JPY’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: 147.21

Resistance: 150.75

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 Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Without major news events, EUR’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: 1.0390

Resistance: 1.0607

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 Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Without major news events, CHF’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: 0.8773

Resistance: 0.8903

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

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Without major news events, GBP’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: 1.2612

Resistance: 1.2755

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

No major news events.

What can we expect from CAD today?

Without major news events, CAD’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: 1.3959

Resistance: 1.4094

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: 69.67

Resistance: 71.48

Next 24 Hours Bias

Medium Bullish

The post IC Markets Asia Fundamental Forecast | 4 December 2024 first appeared on IC Markets | Official Blog.

Mixed Day in US – Nasdaq and S&P Hit Fresh Highs

It was another mixed day in US markets yesterday as the first jobs data of the week showed more vacancies than expected. The major stock indices were mixed again, with the Dow losing 0.17% on the day, while the S&P and Nasdaq managed to hit fresh record closes, finishing up 0.05% and 0.4%, respectively. The dollar slipped lower, with the DXY dropping 0.15%, while treasury yields were mixed once more. Shorter-dated yields dipped, with the 2-year yield losing 4.7 basis points to settle at 4.151%, while longer-dated yields edged higher, with the 10-year yield gaining 0.5 basis points to 4.199%. Oil prices surged out of recent quiet ranges as tensions increased again in the Middle East, with Brent adding 2.5% to $73.62 and WTI rising 2.7% to $69.94. Gold remained at familiar levels, finishing the day up 0.2% at $2,644.05.

Korean Market Jumps into Focus for Investors

Korean markets drew significant attention overnight as unexpected political chaos gripped the country, causing a spike in volatility. Traders anticipate that Korean stocks and the Won will remain on the defensive following South Korean President Yoon Suk Yeol’s declaration of martial law yesterday, which he quickly reversed. The Won initially dropped to a two-year low against the dollar in the immediate aftermath of the announcement, before recovering most of its losses. However, the uncertainty is expected to keep investor concerns elevated, with traders predicting that any rallies in the currency will remain limited until the situation stabilises.

Busy Calendar Day Ahead for Traders

It is set to be a very busy day for traders, with key tier-one data and updates from central bank heavyweights due. Australian markets will be in sharp focus early in the Asian trading day, with the key quarterly GDP data set to be released by the ABS. Expectations are for a 0.5% quarter-on-quarter increase, and any significant deviation from this figure could trigger substantial movements in the Aussie, especially given the resolutely hawkish stance of the RBA at present. European markets will shift focus to the UK, with Bank of England Governor Andrew Bailey scheduled to speak midway through the day. Later, ECB President Christine Lagarde will testify at the European Parliament in Brussels. The New York session also promises to be lively, with both the ADP non-farm employment and ISM Services PMI data releases scheduled, followed by a speech from Fed Chair Jerome Powell later in the day.

The post General Market Analysis – 04/12/24 first appeared on IC Markets | Official Blog.

Aussie dollar traders are gearing up for a busy session today, with key GDP data scheduled for release early in the day. Reserve Bank of Australia Governor Michele Bullock adopted a strongly hawkish tone during her speech last week. If today’s data supports her stance, we could witness further strength in the Aussie dollar in the sessions ahead. The market expects a 0.5% quarter-on-quarter increase, and any significant deviation from this figure could lead to substantial currency movements.

The Aussie has been under pressure against the greenback over the past month, with the ‘big dollar’ strengthening across the board. It is currently trading just above recent multi-month lows, below 65 cents. A weaker-than-expected GDP figure today could see the currency testing those levels, potentially pushing towards the annual low of 0.6347. Conversely, a stronger result may trigger a relief rally, although traders anticipate such gains to be capped due to the prevailing downward trend. On the hourly chart, short-term resistance is now positioned around 0.6520.

Resistance 2: 0.6687 – November High

Resistance 1: 0.6520 – Trendline Resistance

Support 1: 0.6438 – Short-term Trendline Support

Support 2: 0.6410 – Long-term Trendline Support

The post Trade the Aussie Dollar on the Australian GDP Data first appeared on IC Markets | Official Blog.

The post Ex-Dividend 04/12/2024 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 2.28%, Shanghai Composite down 0.27%, Hang Seng up 0.01% ASX up 0.56%
• Commodities : Gold at $2639.35 (0.24%), Silver at $31.19 (0.68%), Brent Oil at $72.04 (0.16%), WTI Oil at $68.27 (0.19%)
• Rates : US 10-year yield at 4.207, UK 10-year yield at 4.209, Germany 10-year yield at 2.0335

News & Data:

• (CAD) Manufacturing PMI 52.0 vs 50.8 expected
• (USD) Final Manufacturing PMI 48.4 vs 47.7 expected

Markets Update:

Asia-Pacific markets climbed on Tuesday, mirroring Wall Street’s positive momentum after the S&P 500 and Nasdaq Composite set new record highs overnight.

Australia’s S&P/ASX 200 gained 0.71%, while Japan’s Nikkei 225 surged 2.22%, and the Topix advanced 1.71%. In South Korea, the Kospi rose 1.71%, and the Kosdaq climbed 2.03%. Meanwhile, South Korea’s November inflation rate increased to 1.5% year-over-year, up from October’s 1.3% but slightly below the 1.7% forecast by economists polled by Reuters. Hong Kong’s Hang Seng Index edged up 0.36%, and the CSI 300 remained flat.

Investors are gearing up for a wave of economic data and remarks from Federal Reserve officials, which are expected to shape the outlook for interest rates.

In the U.S., the S&P 500 rose 0.24%, closing at 6,047.15, while the Nasdaq Composite jumped 0.97%, finishing at 19,403.95. Both indices reached all-time intraday and closing highs. However, the Dow Jones Industrial Average dipped 0.29%, losing 128.65 points to settle at 44,782.00. Despite briefly surpassing the 45,000 mark—a key psychological threshold touched last week—the blue-chip index ended lower.

Market participants are keenly awaiting the U.S. November payrolls report, set to be released on Friday. This data will likely provide critical insights into labor market conditions ahead of the Federal Reserve’s policy meeting scheduled for December 17-18.

Upcoming Events: 

• 03:00 PM GMT – USD JOLTS Job Openings

The post Tuesday 3rd December 2024: Asia-Pacific Markets Rally as Wall Street Hits Record Highs first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast |

 3 December 2024

What happened in the Asia session?

During the Asian session, the U.S. dollar remained close to a six-week low against the yen, while the euro weakened. The euro’s decline was partly due to political instability in France, where Prime Minister Michel Barnier faced a potential vote of no confidence. The yuan’s drop to a 13-month low was influenced by concerns over potential U.S. tariffs.

Commodity markets saw gold prices decrease by 1.1% to $2,625.69 per ounce, primarily due to a stronger U.S. dollar and profit-taking by investors. Oil prices remained steady during this period.

What does it mean for the Europe & US sessions?

This positive momentum from Asia is expected to carry over to the European and U.S. sessions, potentially leading to higher openings. However, political instability in France, where Prime Minister Michel Barnier faces a potential vote of no confidence, may introduce volatility, especially affecting the euro and European equities

In the U.S., the dollar’s strength, supported by robust manufacturing data and political uncertainties in Europe, could continue, impacting currency markets. Investors should monitor these developments closely, as they may influence market dynamics in the upcoming sessions.

The Dollar Index (DXY)

Key news events today

JOLTS Job Openings  (3:00 pm GMT)

What can we expect from DXY today?

Yesterday, the U.S. Dollar Index (DXY) closed at 106.395, marking a 0.5% increase from the previous session. This decline reflects market anticipation of potential Federal Reserve interest rate cuts amid signs of economic slowdown.

The Institute for Supply Management (ISM) released the Manufacturing Purchasing Managers’ Index (PMI) on December 2, 2024, which rose to 48.4 from October’s 46.5, indicating a slower pace of contraction in the manufacturing sector. This improvement was driven by a rebound in new orders and a slowdown in input price growth.

The Job Openings and Labor Turnover Survey (JOLTS) is scheduled for release today at 3:00 pm GMT. A significant decrease in job openings could signal a cooling labor market, potentially leading to a weaker dollar as markets anticipate more accommodative monetary policy. Conversely, stronger-than-expected job openings may bolster the dollar by reducing expectations of imminent rate cuts.

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 Bullish

Gold (XAU)

Key news events today

JOLTS Job Openings  (3:00 pm GMT)

What can we expect from Gold today?

As of December 3, 2024, gold prices have experienced a 28% increase year-to-date, reaching $2,663.30 per ounce. However, recent strengthening of the U.S. dollar and rising Treasury yields have exerted downward pressure on gold. 

The Job Openings and Labor Turnover Survey (JOLTS) report, scheduled for release today at 3:00 pm GMT, will provide insights into the U.S. labor market. A higher-than-expected number of job openings could bolster the dollar, potentially leading to a decline in gold prices. Conversely, fewer job openings might weaken the dollar, making gold more attractive.

Analysts anticipate that gold prices could reach $2,800 to $2,900 per ounce by the end of 2025, driven by factors such as central bank purchases and geopolitical tensions. 

In the short term, gold’s performance will be influenced by U.S. economic data and Federal Reserve policies. Investors should monitor these developments closely to assess their impact on gold prices.

Next 24 Hours Bias

Medium Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Without major news events, AUD’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: 0.6397

Resistance: 0.6643

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 Bearish

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: 0.5831

Resistance: 0.5935

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

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Without major news events, JPY’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: 147.18

Resistance: 151.51

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?

Without major news events, EUR’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: 1.0272

Resistance: 1.0607

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 Bearish

The Swiss Franc (CHF)

Key news events today

CPI m/m  (7:30 am GMT)

What can we expect from CHF today?

The Swiss Consumer Price Index (CPI) data for November has not been released. The most recent data indicates that in October, the CPI decreased to 107.10 from 107.20 in September, reflecting a modest decline in consumer prices

The Swiss National Bank (SNB) has maintained inflation within its target range of 0-2% for over 15 months, with October’s inflation at 0.6%, the lowest in more than three years. This consistent low inflation has led to three interest rate cuts in 2024, bringing the benchmark rate to 1%. Market expectations suggest a 72% probability of a 25 basis point cut and a 28% chance of a 50 basis point cut at the upcoming December 12 meeting

the anticipated CPI data, combined with the SNB’s monetary policy stance and economic conditions, suggests a potential weakening of the CHF in the near term

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 Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Without major news events, GBP’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: 1.2379

Resistance: 1.2854

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 Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Without major news events, CAD’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: 1.3948

Resistance: 1.4263

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 Bullish

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: 66.48

Resistance: 72.78

Next 24 Hours Bias

Medium Bullish

The post IC Markets Europe Fundamental Forecast | 3 December 2024 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

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: 106.58

Supporting reasons: Identified as an overlap resistance close to 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 105.25
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: 107.57
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 1.0607
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 1.0390

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

1st resistance: 1.0711
Supporting reasons: Identified as a pullback resistance close to 61.8% 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 reaction off the pivot and drop toward the 1st support 

Pivot: 158.19

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

1st support: 155.99

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

1st resistance: 160.49
Supporting reasons: Identified as a swing high 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: 0.8309

Supporting reasons: Identified as a pullback resistance close to 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.8267

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

1st resistance: 0.8375
Supporting reasons: Identified as an overlap resistance that aligns with the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 1.2612
Supporting reasons: Identified as an overlap support close to 50% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound

1st support: 1.2491

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

1st resistance:  1.2755
Supporting reasons: Identified as a pullback resistance close to 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 188.05
Supporting reasons: Identified as a pullback support, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 184.32
Supporting reasons: Identified as a swing low support, indicating a key level where price could find support once more.

1st resistance: 190.94
Supporting reasons: Identified as an overlap 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: 0.8903

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

1st support: 0.8773
Supporting reasons: Identified as a pullback support close to 50% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 0.8958
Supporting reasons: Identified as a swing high 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 continuation toward the 1st support 

Pivot: 150.75
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures, indicating a potential area where selling pressures could intensify.

1st support: 147.21
Supporting reasons: Identified asa pullback support close to 61.8% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 153.31
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 reaction off the pivot and drop toward the 1st support 

Pivot: 1.4094

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

1st support: 1.3959
Supporting reasons: Identified as overlap support close to 61.8% Fibonacci retracement, indicating a key level where price could find support once more.

1st resistance: 1.4176
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

AUD/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: 0.6504

Supporting reasons: Identified as an overlap resistance close to 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.6447
Supporting reasons: Identified as a swing-low support, suggesting a key support area where price could find support once again.

1st resistance: 0.6620
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

NZD/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 

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

Pivot: 0.5935
Supporting reasons: Identified as an overlap resistanceclosse to 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.5814
Supporting reasons: Identified as a swing low support, suggesting a key support area where price could find support.

1st resistance: 0.6027
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

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: 44,971.98

Supporting reasons: Identified as a swing high resistance that aligns with the 127.2% Fibonacci extension, indicating a potential area where selling pressures could intensify.

1st support: 44,339.53

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

1st resistance: 45,573.41

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

DE40 (DAX):

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: 19,901.10

Supporting reasons: Identified as a swing high resistance close to 127.2% Fibonacci extension, indicating a potential area where selling pressures could intensify.

1st support: 18,680.81

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

1st resistance: 20,203.66
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: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 6,077.93

Supporting reasons: Identified as a swing high resistance that aligns with 127.2% Fibonacci extension, indicating a potential area where selling pressures could intensify.

1st support: 6,013.39

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

1st resistance: 6,148.32
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 reaction off the pivot and drop toward the 1st support 

Pivot: 96,200.63

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

1st support: 91,814.94
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support.

1st resistance: 99,465.75
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: 3,649.10

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

1st support: 3,491.43
Supporting reasons: Identified as a pullback support close to 50% Fibonacci retracement, indicating a potential level where price could find support once again

1st resistance: 3,765.82
Supporting reasons:  Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 69.81
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support:  66.98
Supporting reasons: Identified as a swing-low support, indicating a key level where price could find support once again.

1st resistance: 71.33
Supporting reasons: Identified as an overlap resistance, 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 continuation toward the 1st support 

Pivot: 2664.65
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 2599.91

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

1st resistance: 2713.65
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

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The post Tuesday 3rd December 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast |

 3 December 2024

What happened in the U.S. session?

The Institute for Supply Management (ISM) released its Manufacturing Purchasing Managers’ Index (PMI) for November, which rose to 48.4 from October’s 46.5, indicating a slower pace of contraction in the manufacturing sector. This improvement was driven by a rebound in new orders, marking the 1st  increase in 8 months, and a slowdown in input price growth.

Following the PMI release, the U.S. dollar strengthened against major currencies, with the dollar index rising 0.5%. This appreciation was influenced by President-elect Donald Trump’s warning to BRICS nations against seeking alternatives to the dollar, reinforcing its status as the global reserve currency.

What does it mean for the Asia Session?

The U.S. ISM Manufacturing PMI for November rose to 48.4 from October’s 46.5, indicating a slower contraction in the manufacturing sector. This improvement suggests a potential stabilization in U.S. economic activity, which could influence the Asian forex markets.

Implications for the Asian Session:

U.S. Dollar Strength: The uptick in PMI may bolster confidence in the U.S. economy, leading to a stronger dollar. Asian currencies like the Japanese yen (JPY) and Chinese yuan (CNY) might experience depreciation against the USD.

Commodity-Linked Currencies: Currencies such as the Australian dollar (AUD) and New Zealand dollar (NZD) could see increased volatility, as improved U.S. manufacturing data may affect global commodity demand and prices.

Market Sentiment: Positive U.S. economic indicators can enhance global risk appetite, potentially benefiting emerging Asian market currencies. However, a stronger USD might offset these gains.

The Dollar Index (DXY)

Key news events today

JOLTS Job Openings  (3:00 pm GMT)

What can we expect from DXY today?

Yesterday, the U.S. Dollar Index (DXY) closed at 106.395, marking a 0.5% increase from the previous session. This decline reflects market anticipation of potential Federal Reserve interest rate cuts amid signs of economic slowdown.

The Institute for Supply Management (ISM) released the Manufacturing Purchasing Managers’ Index (PMI) on December 2, 2024, which rose to 48.4 from October’s 46.5, indicating a slower pace of contraction in the manufacturing sector. This improvement was driven by a rebound in new orders and a slowdown in input price growth.

The Job Openings and Labor Turnover Survey (JOLTS) is scheduled for release today at 3:00 pm GMT. A significant decrease in job openings could signal a cooling labor market, potentially leading to a weaker dollar as markets anticipate more accommodative monetary policy. Conversely, stronger-than-expected job openings may bolster the dollar by reducing expectations of imminent rate cuts.

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 Bullish

Gold (XAU)

Key news events today

JOLTS Job Openings  (3:00 pm GMT)

What can we expect from Gold today?

As of December 3, 2024, gold prices have experienced a 28% increase year-to-date, reaching $2,663.30 per ounce. However, recent strengthening of the U.S. dollar and rising Treasury yields have exerted downward pressure on gold. 

The Job Openings and Labor Turnover Survey (JOLTS) report, scheduled for release today at 3:00 pm GMT, will provide insights into the U.S. labor market. A higher-than-expected number of job openings could bolster the dollar, potentially leading to a decline in gold prices. Conversely, fewer job openings might weaken the dollar, making gold more attractive.

Analysts anticipate that gold prices could reach $2,800 to $2,900 per ounce by the end of 2025, driven by factors such as central bank purchases and geopolitical tensions. 

In the short term, gold’s performance will be influenced by U.S. economic data and Federal Reserve policies. Investors should monitor these developments closely to assess their impact on gold prices.

Next 24 Hours Bias

Medium Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Without major news events, AUD’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: 0.6447

Resistance: 0.6540

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 Bearish

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: 0.5814

Resistance: 0.5935

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

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Without major news events, JPY’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: 147.18

Resistance: 150.75

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?

Without major news events, EUR’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: 1.0390

Resistance: 1.0607

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 Bearish

The Swiss Franc (CHF)

Key news events today

CPI m/m  (7:30 am GMT)

What can we expect from CHF today?

The Swiss Consumer Price Index (CPI) data for November has not been released. The most recent data indicates that in October, the CPI decreased to 107.10 from 107.20 in September, reflecting a modest decline in consumer prices

The Swiss National Bank (SNB) has maintained inflation within its target range of 0-2% for over 15 months, with October’s inflation at 0.6%, the lowest in more than three years. This consistent low inflation has led to three interest rate cuts in 2024, bringing the benchmark rate to 1%. Market expectations suggest a 72% probability of a 25 basis point cut and a 28% chance of a 50 basis point cut at the upcoming December 12 meeting

the anticipated CPI data, combined with the SNB’s monetary policy stance and economic conditions, suggests a potential weakening of the CHF in the near term

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 Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Without major news events, GBP’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: 1.2612

Resistance: 1.2755

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

No major news events.

What can we expect from CAD today?

Without major news events, CAD’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: 1.3959

Resistance: 1.4094

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 Bullish

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: 66.98

Resistance: 69.81

Next 24 Hours Bias

Medium Bullish

The post IC Markets Asia Fundamental Forecast | 3 December 2024 first appeared on IC Markets | Official Blog.

Tech Stocks Surge to Start a Big Week – Nasdaq Up 1%

Tech stocks surged higher on the first day of a busy week yesterday, while earlier in the day, the Euro took a hit as the potential for a French government collapse increased. The Dow dropped on the day, losing 0.29%, while both the S&P and Nasdaq pushed to fresh highs, gaining 0.24% and 0.97% respectively. The dollar strengthened in line with the weaker Euro and robust US data, while US yields edged higher, with the 2-year yield up 1.9 basis points to 4.182% and the 10-year yield rising 2.3 basis points to 4.197%. Oil prices traded within familiar ranges, with Brent up 0.15% to $71.93 and WTI up 0.15% to $68.10, while gold rose 0.60% to $2,636.54.

Euro Drops as French Interim Government Faces Peril

The Euro declined in trading yesterday as geopolitical concerns in France intensified, with the far-right National Rally likely to support a no-confidence motion in the coming days. The political balance in France has been precarious since the recent elections, and the interim government now faces significant instability. The Euro fell 1% in trading yesterday, and further escalation of the situation could drive it lower. The single currency is now trading just below 1.0500 and the 200-day moving average on the hourly chart. Further negative headlines from France could push it towards the longer-term trend line support around 1.0345. Any rallies are expected to be capped by recent highs near 1.0600 in the current environment, but traders anticipate further volatility as Europe opens later today.

The Trading Week Gains Momentum

The event calendar continues to gather momentum today, with key releases expected and the potential for more geopolitical influences to impact the market. The Asian session on Tuesday is relatively quiet, but attention will shift to Swiss markets during the European open when CPI data is released. However, developments in the French political landscape are likely to keep Euro traders on edge. The first US jobs report of the week, the JOLTS Job Openings data, is set to be released soon after the New York open, with a 7.5 million print expected. Later in the day, Federal Reserve members Adriana Kugler and Austan Goolsbee are scheduled to speak, with traders eager to see if their comments align with the slightly dovish tone expressed by Christopher Waller yesterday.

The post General Market Analysis – 03/12/24 first appeared on IC Markets | Official Blog.