US FOMC meeting minutes to be released
Wednesday, 19th of November
There has been a shift among Fed policymakers, as per their recent statements, towards a more cautious stance regarding the further easing of the Fed’s monetary policy. It’s characteristic that a number of “doves” eased on their dovishness, forcing the market to readjust its expectations. Currently Fed Fund Futures imply that the possibility of a rate cut in the December meeting iscurrently at almost 50%, in contrast to its expectations a week ago which implied a probability for such a scenario to materialise of 64%. Next Wednesday the Fed’s October meeting minutesare expected to be scrutinised by analysts for clues regarding the Fed’s intentions. Should the release enhance market doubts for a rate cut in the December meeting we may see it weighing on gold’s price and US stock markets, while at the same time we may see it providing support for the USD.
XAU/USD Daily Chart
- Support: 4155 (S1), 3890 (S2), 3615 (S3)
- Resistance: 4380 (R1), 4600 (R2), 480015 (R3)
We note that gold’s price edged lower yesterday yet failed to break the 4155 (S1) support line. Gold’s price seems to be testing the upward trendline guiding it setting into doubt the bullish outlook for the precious metal’s price. The RSI indicator despite the drop of gold’s price remained well between the readings of 50 and 70 implying a bullish predisposition of the market. Should the bulls maintain control over the precious metal’s direction, we set the next possible stop for buyers at the (R1) resistance level, which marks an All Time High for the precious metal’s price. For a bearish outlook to be adopted we would require gold’s price to break the prementioned upward trendline and continue to also break the 4155 (S1) support line and continue to break also the 3890 (S2) support level.
Euro Zone, Preliminary November PMI figures
Friday, 21st of November
The Euro Zone’s preliminary PMI figures for October are to be released next Friday and could shake the common currency. We intend to focus on the figures related to the manufacturing sector of Germany, France’s services sector and for a rounder view on Eurozone’s composite PMI figure. It should be noted that with a relatively steady inflation, near the ECB’s target and a relatively tight employment market, the next big question for the Euro Zone is growth. Should the indicators imply another possibly deeper contraction of economic activity, we may see the EUR losing ground. On the flip side should the indicators imply an expansion of economic activity, we may see the single currency strengthening.
EUR/USD Daily Chart
- Support: 1.1570 (S1), 1.1265 (S2), 1.1065 (S3)
- Resistance: 1.1825 (R1), 1.2115 (R2), 1.2265 (R3)
EUR/USD continued to rise yesterday, abandoning any hesitation and signalling a clear break of the 1.1570 (S1) resistance line now turned to support and downward trendline guiding the pair’s price action since the 17th of September. The breaking of the prementioned downward trendline forces us to switch our prior bearish outlook for the pair in favour of a sideways motion for now. We also note that the RSI indicator has risen and has breached just above the reading of 50, implying an erasing of the bearish market sentiment for the pair and that market participants may be rather indecisive for the pairs’ direction. For a bullish outlook to emerge we would require the pair to start actively aiming if not breaching the 1.1825 (R1) resistance line. For a bearish outlook to emerge we would require the pair to drop break the 1.1570 (S1) support line and start aiming for the 1.1265 (S2) support level.
USD/JPY Daily Chart
- Support: 152.90 (S1), 149.15 (S2), 146.25 (S3)
- Resistance: 156.00 (R1), 158.80 (R2), 161.90 (R3)
On a technical level, we note that USD/JPY edged lower yesterday yet remains well between the 156.00 (R1) resistance line and the 152.90 (S1) support level. We maintain a bullish outlook for the pair and intend to keep it as long as the upward trendline guiding remains intact. Also the RSI indicator remains between the reading of 50 and 70 implying that the market sentiment is still bullish for the pair. Should the bulls continue to lead the pair higher we may see it breaking the 156.00 (S1) support line clearly and starting to aim for the 158.80 (R2) resistance level. For a bearish outlook to prevail we would require the pair’s price action to break the prementioned upward trendline in a first signal that the upward motion has been interrupted, continue to also break the 152.90 (S1) support line clearly as a sign of the pair’s price action not merely stabilising but actually dropping and start actively aiming for the 149.15 (S2) support level.
#AAPL Daily Chart
- Support: 265.85 (S1), 255.45 (S2), 244.40 (S3)
- Resistance: 276.95 (R1), 290.00 (R2), 300.00 (R3)
In the equities market we note that Apple’s share price seems to have difficulties in breaking the 279.95 (R1) resistance line. Nevertheless, we intend to maintain a bullish outlook for Apple’s share price as long as the upward channel guiding Apple’s sharer price higher since the 5th of August, remains intact. We note that the RSI Indicator remains near the reading of 70 implying a strong bullish market sentiment for the share’s price action, yet may also imply that the price action is near overbought levels and thus a correction lower may be possible. Should the bulls maintain control over the share price’s price action, we may see it breaking the 276.95 (R1) resistance line and set as their next possible target the 290.00 (R2) resistance level. Should the bears take over, we may see Apple’s price action reversing course breaking the lower boundary of the upward channel, signalling an interruption of the upward trendline, and then continue to break the 265.85 (S1) support line and start aiming for the 255.45 (S2) support base.
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