Central bank policies are anticipated to be impacted by the forthcoming economic data releases, which offer valuable insights into the inflation and manufacturing activity trajectory.
The October US core PCE Deflator is critical due to declining inflation. As the headline CPI and PPI figures have already demonstrated a deceleration, the anticipation of future rate cuts could be reinforced by a comparable pattern in the core PCE index.
Investors should closely monitor the November EU flash CPI following a significant deceleration in October from 4.3% to 2.9%. Although certain ECB policymakers have emphasized anticipated rate increases, an expanding faction is urging caution. Increasingly, the market speculates that the ECB may reduce interest rates in the first quarter of 2023.
The November PMIs for manufacturing will provide valuable insights into the economic activity of significant European nations. The German and French manufacturing sectors have contracted for the past sixteen months. Despite outperforming Germany and France, Italy and Spain are experiencing indications of a deteriorating economy due to the adverse effects of increased interest rates on the manufacturing sector.
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Forex Technical Outlook for 27 November 2024 to 01 December 2024
Let’s see the list of events to look at this week:
- RBA Gov Bullock Speaks on Tuesday
- CB Consumer Confidence on Tuesday
- RBNZ Official Cash Rate & Rate Statement on Wednesday
- German Prelim CPI m/m on Wednesday
- Spanish Flash CPI y/y on Wednesday
- BOE Gov Bailey Speaks on Wednesday
- OPEC-JMMC Meetings on Thursday
- Core PCE Price Index m/m on Thursday
- CAD Unemployment Rate on Friday
Let’s see the market outlook from the weekly forecast:
The EUR/USD price passed an uneventful week, moving above the 1.0900 mark. Moreover, the Thanksgiving holiday and muted war-driven sentiment kept the currency pair within a limited range.
From the weekly technical outlook of EUR/USD, the price showed consecutive higher highs and higher lows with an upward momentum above the dynamic 20-week Simple Moving Average. However, the 100 SMA shows a modest sell-side pressure below the shorter line, while the 200 SMA is flat at the 1.1149 area.
Meanwhile, other technical indicators showed limited bullish pressure, as the Momentum indicator is at the 100.00 line.
In the daily chart, the EUR/USD price remains bullish above near-term moving averages. Therefore, a stable price with consolidation above the 1.0960 level could open a long opportunity, targeting the 1.1100 mark. On the other hand, a fresh bearish break below the 1.0850 level could be a short opportunity, targeting the 1.0740 support level.
Last week, the Sterling Pound grabbed additional bullish pressure against the US dollar, taking the GBP/USD price above the 1.2600 psychological level. Moreover, the price remained bullish with an additional upside risk, which needs a valid confirmation from the daily technical outlook.
In the daily chart of GBP/USD, the price remained bullish within an uptrend where the recent ascending triangle broke out on 14 November. Moreover, the 14-day Relative Strength Index (RSI) remains bullish above the 50.00 line, which could keep the GBP/USD bullish pressure intact for the coming days.
Based on the weekly forecast for GBP/USD, the door is open for the pair to test the 1.2815 level, as measured by the triangle pattern. However, the price needs a stable market above the 1.2650 level before aiming for the 1.2735 level, which is the 30 October high.
On the bearish side, the 100-day SMA would be strong support, which is at the 1.2498 level. A stable break below this level could trigger the short opportunity, where the main aim is to test the 1.2345 level.
The AUD/USD trades higher with a fresh weekly candle above the long-term range. As the bullish liquidity grab is over, investors should see how the price stays above the 0.6515 level before forming a log setup.
The above image shows the weekly chart of AUD/USD, where the recent candle aimed higher after a consolidation. Moreover, a weekly candle is above the dynamic 20 EMA level, where the 100-week SMA is at the 0.6798 resistance level.
In the daily chart, a bullish flip is seen as the 20 EMA reached the 100-day SMA level with upward pressure. Moreover, the recent price trades are higher than the 100-day SMA level, which suggests active buying pressure in the market.
Moreover, the 14-day RSI shows a bullish possibility as the current reading is upward above the 50.00 line.
Based on the daily market outlook of AUD/USD, a minor downside correction is possible towards the dynamic 20 EMA level. However, a bullish rebound from the 0.6460 to 0.6390 area could be a long opportunity, targeting the 0.6800 level.
The alternative approach is to find a stable bearish daily candle and a consolidation below the 0.6400 level before aiming for the 0.6280 area.
The USD/JPY went bearish below the near-term dynamic level but formed a bullish exhaustion from the static support. Overall, the long-term bullish trend is still valid, and investors might find it as a trend continuation opportunity.
In the weekly USD/JPY price, the recent candle shows strong selling pressure, which was eliminated with a long-wicked candlestick formation. Moreover, the 20-week EMA is the immediate support, from where the last week showed a buying pressure.
In the daily chart, the long-term bullish trend is still valid, as the recent price failed to move below the 100-day SMA. However, the 20-day EMA is the immediate resistance, which needs a bullish breakout above the 150.00 static level.
Moreover, the RSI shows a corrective momentum as the current reading is at the 50.00 level, followed by a bearish momentum from the 70.00 area.
Based on the daily outlook, a bullish daily candle above the 150.00 level could be a long opportunity, targeting the 151.92 resistance level. On the other hand, selling pressure might come from the 150.00 static level, from where a bearish daily candle below the 20 EMA could be a short opportunity.
The XAU/USD tested the 2000.00 level for the second time in November but struggled to remain stable above this level. The coming trading days will be eventful due to high-tier data releases, which could offer a clear price direction for the XAU/USD.
The daily Relative Strength Index (RSI) remains flat at the 60.00 level, which indicates buyers struggle to continue the buying pressure above the 2000.00 line. The weekly candle suggests a strong bullish continuation opportunity, supported by a strong support from the 20-week SMA. Also, the weekly RSI is bullish with an upward slope above the 50.00 line, which could work as a trend continuation pattern.
On the bullish side, the next resistance level is at the 2010.00 level, which could work as a strong barrier before reaching the 2040.00 resistance level.
On the bearish side, a sharp bearish pressure with a daily close below the 1980.00 level could extend the selling pressure toward the 1950.00 level.
According to data from CoinGlass, the volume of liquidity spanning from 37,900.00 to 38,100.00 is estimated to be around $3 billion. In conjunction with available margin, cryptocurrency exchanges ascertain liquidation levels when the market experiences an unfavorable movement for a trader. When prices move against a trader's position, and there is insufficient margin to cover open positions, liquidation events occur.
These price ranges tend to function as magnets, attracting the underlying asset. Although liquidity accumulation frequently occurs before trend reversals, this is not always the case; prices may continue in the same trajectory. The most recent liquidity event about Bitcoin transpired on November 9, leading to an instantaneous reversal.
Investors must carefully contemplate the ramifications of the ETF approval discourse. This narrative possesses considerable potential and could drive Bitcoin to $40K before any subsequent correction. There are circumstances in which the expected decline may never occur.
In the daily chart, the BTC/USDT price shows that the higher low formation since October 27 has some uncollected liquidity, which has not been grabbed.
Therefore, the risk is that the bearish divergence-driven pullback could knock the BTC/USDT price towards the 33,350.00 level. Moreover, the dynamic 20 EMA is the immediate support, where a bearish break below this line could work as a confluence support to bears.