US Employment data
Tuesday, 16th of December
The US Employment data for November is set to be released next Tuesday. The current expectations by economists are for the unemployment rate to remain steady at 4.4% whilst the NFP figure is expected to come in at 35k which would be lower than the prior figure of 119k, hence showcasing a loosening labour market. Hence, should the data come in as expected, it could weigh on the dollar whilst aiding gold’s price given the two instrument’s assumed inverse relationship with one another.
XAU/USD H4 Chart
- Support: 4240 (S1), 4142 (S2), 4080 (S3)
- Resistance: 4315 (R1), 4380 (R2), 4450 (R3)
XAU/USD appears to be moving in a upwards fashion, with the precious metal’s price having reached our 4315 (R1) resistance level. We opt for a bullish outlook for the commodity’s price and supporting our case all are three indicators below our chart which tend to point towards a bullish market sentiment. For our bullish outlook to be maintained we would require a clear break above our 4135 (R1) resistance line with the next possible target for the bulls being our 4380 (R2) resistance level. On the other hand, for a sideways bias we would require gold’s price to remain confined between our 4240 (S1) support level and our 4315 (R1) resistance line. Lastly, for a bearish outlook we would require a clear break below our 4240 (S1) support level with the next possible target for the bears being our 4142 (S2) support line.
ECB decision day
Thursday, 18th of December
Next Thursday, we are set to receive the ECB’s interest rate decision. The majority of market participants are currently anticipating the bank to remain on hold at 2.15% with EUR OIS currently implying a 99.8% probability for such a scenario to materialize. We tend to agree with this view as ECB policymakers have repeatedly noted that the ECB is in a “good place” and thus we do not see the case for a rate cut by the bank next week. Moreover, considering the recent ‘hawkish’ tone being adopted by some policymakers, we wouldn’t be surprised to see the bank’s accompanying statement being perceived as relatively hawkish in nature, which in turn could aid the EUR.
EUR/USD Daily Chart
- Support: 1.1685 (S1), 1.1560 (S2), 1.1460 (S3)
- Resistance: 1.1815 (R1), 1.1917 (R2), 1.2000 (R3)
EUR/USD appears to be moving in an upwards fashion, with the pair clearing our resistance turned to support at the 1.1685 (S1) level. We opt for a bullish outlook for the pair and supporting our case are all three indicators below our chart which tend to point towards a bullish market sentiment. For our bullish outlook to be maintained we would require a break above our 1.1815 (R1) resistance line with the next possible target for the bulls being our 1.1917 (R2) resistance level. On the other hand, for a sideways bias we would require the pair to remain confined between our 1.1685 (S1) support level and our 1.1815 (R1) resistance line. Lastly, for a bearish outlook we would require a clear break below our 1.1685 (S1) support level with the next possible target for the bears being our 1.1560 (S2) support level.
USD/JPY Daily Chart
- Support: 155.60 (S1), 153.05 (S2), 150.75 (S3)
- Resistance: 157.95 (R1), 160.30 (R2), 162.65 (R3)
USD/JPY cleared our supported turned to resistance at the 155.60 (S1) level. Yet in spite of this we would opt for a bearish outlook for the pair considering the upcoming BOJ decision next week. Moreover, supporting our case is the break below our upwards moving trendline located on our chart in addition to the MACD and ADX with DI indicators below our chart. For our bearish outlook to be maintained we would require a clear break below our 155.60 (S1) support level with the next possible target for the bears being our 153.05 (S2) support line. On the other hand, for a bullish outlook we would require a clear break above our 157.95 (R1) resistance level with the next possible target for the bulls being our 160.30 (R2) resistance line. Lastly, for a sideways bias we would require the pair to remain confined between our 155.60 (S1) support level and our 157.95 (R1) resistance line.
WTICash Daily Chart
- Support: 55.95 (S1), 53.75 (S2), 51.50 (S3)
- Resistance: 57.95 (R1), 59.99 (R2), 62.35 (R3)
WTI’s price action appears to be moving in a downwards fashion, having currently cleared our support now turned to resistance at the 57.95 (R1) level. We maintain our bearish outlook for the commodity and supporting our case is the downwards moving trendline which was incepted on the 24th of October, in addition to the indicators below our chart which tend to imply a bearish market sentiment. For our bearish outlook to be maintained we would require WTICash’s price to remain below our R1 level if not also clearing our 55.95 (S1) support level, with the next possible target for the bears being our 53.75 (S2) support line. On the other hand, for a bullish outlook we would require a clear break above our 57.95 (R1) resistance line if not also our 59.99 (R2) resistance level with the next possible target for the bulls being our 62.35 (R3) resistance line. Lastly, for a sideways bias we would require the commodity’s price to remain between our 55.95 (S1) support level and our 57.95 (R1) resistance line.
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