Market Talk
– Lingering doubts about when the
United States and China will sign a preliminary trade deal sent safe havens
JPY, CHF and Gold higher after a senior official in U.S. President Donald
Trump’s administration told Reuters the signing of a so-called “phase
one” trade deal could be delayed until December.
– Many investors remain nervous about the risks to the global economic outlook given the 16-month long Sino-US trade war that has rippled across financial markets, slowed global investments and growth. With Brexit showing no signs of a quick resolution and with election increasing uncertainty is also weighing on the financial markets.
– The dollar’s persistent and confounding strength will continue well into next year, and even if a partial U.S.-China trade deal is signed, it will at most knock the currency by 1-2% in the immediate aftermath, a Reuters poll found.
– Traders are also awaiting results of a UK general election on Dec. 12, which will determine whether the ruling Conservative Party can capture a majority in Parliament and conclude Brexit by the Jan. 31 deadline.
– Sterling traded near a one-week low before a Bank of England meeting later on Thursday. No change in policy is expected, but investors are focused on how the BoE will respond to uncertainties posed by Britain’s fraught exit from the European Union.
Chart Focus USD/CHF
Key Points
1. Buy USD/CHF recommendation
2. Buy USD/CHF at 0.9910. Stop at 0.9880 and target at 0.9970
3. Recent better than expected US data and interest rate differential are both in the US dollar favour
4. Price supported by Fibonacci 38% support point and 20EMA with MACD bullish is hinting of further price advance.
Fundamental Comments
1. Recent better than expected US data is pointing to a weaken but still rosy US economy
2. Interest rate differential is in the US$ favour.
Technical Comments
1. Price is supported by both the Fibonacci 38% support point and the 20EMA, hinting of a strong price support.
2. MACD is still bullish with both its lines above the zero line
Key Levels
| Support | 0.9905 | 0.9880 | 0.9850 |
| Resistance | 0.9940 | 0.9970 | 0.9995 |
Technical Overview
USD/JPY – Price has fallen lower after reaching a high at 109.21. Price is likely to test the Fibonacci 62% correction point at 108.40. A break of this point is likely to see price lower to 107.90. However if price is able to hold above the Fibonacci 62% point, we can see a test of 109.20 again. Watch the reaction at 108.40.
| Support | 108.65 | 108.30 | 107.90 |
| Resistance | 108.95 | 109.30 | 109.60 |
EUR/USD – Price has started today below the neckline line at 1.1075 but MACD is showing a divergence and warning of a possible bottom. However Stochastic is not confirming the divergence from MACD. 20EMA is also strongly bearish. If price stays below 1.1095, we will stay bearish for 1.1010. However, a move above 1.1095 would negate our bearish view.
| Support | 1.1050 | 1.1025 | 1.0990 |
| Resistance | 1.1080 | 1.1105 | 1.1150 |
GBP/USD – Price was capped at 1.2895 and has moved below 1.2840 this morning. We continue to favour a movement to 1.2805-1.2820. This could be the bottom as MACD is starting to show divergence, warning of a possible low. Stochastic is also in the oversold extreme. Wait for better trading idea
| Support | 1.2820 | 1.2785 | 1.2745 |
| Resistance | 1.2860 | 1.2890 | 1.2925 |
XAU/USD – Price could be in a big range from 1478 to 1519. There is a possibility of another test to the low of 1478 and we will know if price can move above the 20EMA at 1494.20. If price is unable to move above this resistance point, price is likely to test 1478. If above 1494, we are likely to see a continuation of price movement to the top of the big range at 1516.
| Support | 1487.05 | 1474.10 | 1463.20 |
| Resistance | 1494.20 | 1514.05 | 1524.30 |
NZD/JPY – Our sell order at 69.35 was filled when price reached a high of 69.60. Price reached a low of 68.95 this morning. We would recommend bringing stop lower to 0.6945 while keeping profit target unchanged at 0.6875. Stochastic is into oversold extreme but MACD is still bearish at the moment.
| Support | 68.90 | 68.65 | 68.40 |
| Resistance | 69.15 | 69.50 | 69.95 |
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