US data release
Friday, 5th of December
We are still getting old data from the US, as their release has been delayed given the US Government shutdown. Next Friday we highlight the release of September’s PCE rates which are to complement the respective employment data and could affect the market’s expectations for the Fed’s intentions. A possible acceleration of the rates could imply a resilience of inflationary pressures in the US economy and thus reduce market expectations for the Fed to cut rates in the December meeting. A possible acceleration of the rates could provide support for the USD while at the same time, weigh on US stock markets and gold’s price.
XAU/USD Daily Chart
- Support: 4050 (S1), 3890 (S2), 3615 (S3)
- Resistance: 4245 (R1), 4380 (R2), 4800 (R3)
XAU/USD is maintaining a sideways over the past two weeks with its price action remaining within the boundaries set by the 4050 (S1) support line and the 4245 (R1) resistance level. The RSI indicator has slightly rise above 50, yet for the time being remains unconvincing for the bullish market sentiment among market participants. We intend to maintain our sideways motion bias as long as the precious metal’s price action remains within the prementioned boundaries. For a bullish outlook to emerge we would require gold’s price to break the 4245 (R1) resistance line and start aiming for the 4380 (R2) resistance level, marking an All Time High for the precious metal. For a bearish outlook to be adopted, gold’s price would have to break the 4050 (S1) support line a level marking the latest trough and start aiming for the 3890 (S2) support base.
Canada’s November employment data
Friday, 5th of December
Next Friday we also get Canada’s November employment data. It should be noted that the unemployment rate dropped to 6.9% for October, while the employment change figure for the same month was at 66.6k. Should we see the Canadian employment market tightening further, say for example if the unemployment rate drops further and the employment change figure is high then we may see the Loonie getting some support as the market expectations for the BoC to remain on hold could be enhanced. On a flip side a possible easing of the employment market, beyond market expectations could weigh on the CAD.
USD/CAD Daily Chart
- Support: 1.4020 (S1), 1.3880 (S2), 1.3720 (S3)
- Resistance: 1.4145 (R1), 1.4280 (R2), 1.4415 (R3)
USD/CAD price action was dropping on Wednesday and Thursday, teasing the 1.4020 (S1) support line. The pair’s price action since the start of September was within an upward channel, allowing for a bullish outlook to be adopted. Yet we note the pair’s weakness in forming a new higher high after hitting a ceiling last Monday at the 1.4145 (R1) resistance line, which may imply some stabilisation of the pair. Please note that some analysts have even considered a double peak formation being in the works for the pair’s price action which could imply a drop as low as the 1.3880 (S2) support level, yet that is currently rejected from our side. Also the RSI indicator has dropped as low as the reading of 50, implying an erasing of the bullish market sentiment for the pair. Hence we issue a warning for a possible stabilisation of the pair. Yet as long as USD/CAD’s price action remains within the boundaries set by the prementioned upward channel, we maintain a bullish outlook. Should the bulls maintain control we may see USD, reversing the losses of the past three days and breaking the 1.4145 (R1) resistance hurdle, thus paving the way for the 1.4280 (R2) resistance level. Should the bears take over, we may see USD/CAD breaking the 1.4020 (S1) support line, continuing lower by breaking the lower boundary of the prementioned upward channel in a first signal of an interruption of the upward movement and start aiming for the 1.3880 (S2) support base.
EUR/JPY Daily Chart
- Support: 178.85 (S1), 174.90 (S2), 169.70 (S3)
- Resistance: 183.50 (R1), 189.25 (R2), 195.00 (R3)
Despite some stabilisation over the past week, EUR/JPY has maintained a clear upward direction since the end of February. We intend to maintain our bullish outlook as long as the upward trendline guiding the pair higher since the 28th of February, remains intact. Please note that despite the RSI indicator correcting a bit lower it remains between the readings of 50 and 70, implying a continuance of the market’s bullish predisposition for the pair. Also the price action is below the upper Bollinger band, which could imply that there is some room for the bulls to play. Should the bulls maintain control over the pair’s direction, we may see EUR/JPY breaking the 183.50 (R1) resistance line and start aiming for the 189.25 (R2) resistance hurdle. Should the bears take over, we may see EUR/JPY breaking the 178.85 (S1) former resistance line, now turned to support, and continue to break the prementioned upward trendline clearly in a first signal that the upward motion of the pair has been interrupted and continue even lower to reach if not breach the 174.90 (S2) support level.
Apple (#APPL) Daily Chart
- Support: 276.75 (S1), 265.85 (S2), 255.45 (S3)
- Resistance: 287.50 (R1), 300.00 (R2), 310.00 (R3)
Apple’s continued to edge higher yesterday, teasing if not breaking the 276.75 (S1) resistance line, now turned to support, marking an All Time High for the share’s price. As the share’s price enters unchartered waters, we maintain a bullish outlook as it has been moving in an upward channel since the 5th of August. Also the RSI indicator has risen, nearing the reading of 70, implying a strengthening bullish market sentiment for the pair. On the other hand the share’s price action has reached the upper Bollinger band which may imply that its nearing overbought levels and may be ripe for a correction lower. Nevertheless as long as the share’s price action continues to move within the upward channel we intend to maintain our bullish outlook. We set as the next possible target for the bulls, the 287.50 (R1) resistance line, while for a bearish outlook we would require Apple’s share price to drop, breaking the 276.75 (S1) support line, continue lower to break also the lower boundary of the prementioned upward channel, and then even lower to break the 265.85 (S2) support level, thus opening the gates for the 255.45 (S3) support barrier.
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