USD

On Wednesday, November 22nd, the economic data released by the United States showed mixed performance: initial jobless claims were lower than expected, durable goods orders declined by 5.4%, and the University of Michigan Consumer Confidence Index in November edged up to 61.3. In the U.S. market session, the U.S. dollar index saw a slight increase. The Federal Reserve had recently released the minutes of the November Federal Open Market Committee meeting, and the market reaction was quite moderate, with no real surprises. Considering the subsequent data and market participants' responses, especially the recent U.S. inflation data prompting widespread selling of the dollar, this is not unexpected. Although the outlook for Federal Reserve members may have changed since the meeting, some key conclusions, including the September staff projections, remained unchanged. The Federal Reserve reiterated its commitment to data-driven decision-making, with participants noting that further policy tightening would be appropriate if information indicated insufficient progress toward inflation targets. As mentioned earlier, the recent Consumer Price Index undoubtedly boosted confidence among members, but as Federal Reserve policymakers recently pointed out, there is still work to be done. After the release of the meeting minutes, there was almost no change in the expected Federal Reserve interest rates, with the first rate cut likely to occur in May 2024, reflecting the situation in June 2024. Durable goods orders and final Michigan sentiment data are about to be released. It is expected that these will not be particularly exciting and may have minimal or short-term impact on the U.S. dollar.

Looking ahead, although the U.S. dollar index broke below the strong support level of 105 in the past week, considering the relatively strong resilience of the U.S. economy compared to other economies, with relatively stable employment and lingering inflation pressures, the Federal Reserve is likely to find it difficult to quickly shift monetary policy. It is anticipated that the downside space for the U.S. dollar index in the short term may be relatively limited, and short-term fluctuations are expected to be maintained in the range of 103 to 105. As for short-term resistance above, attention can be focused on 104.37 (38.2% Fibonacci retracement level from 99.57 to 107.34) and 104.61 (89-day moving average). Regarding support below, it is worth noting 103.46 (50% Fibonacci retracement level) and 103.17 (Tuesday's low). For the U.S. dollar index, the outlook is still expected to be volatile or somewhat weak.

Today, it may be considered to short the U.S. dollar index near 104.00, with a stop loss at 104.15 and targets at 103.50 and 103.45.

WTI crude oil

Affected by OPEC+ delaying the meeting, crude oil staged a V-shaped reversal, rebounding from a low of $73.80 to $76.70 during the Asian session on Wednesday. However, WTI crude oil concluded a three-day upward trend, declining to around $77.70. The possibility of a significant increase in U.S. crude oil inventories poses moderate downward pressure on oil prices. For the week ending November 17, the API reported an increase of 9.05 million barrels in weekly crude oil inventories compared to the previous week's 1.335 million barrels. The rise in U.S. crude oil inventories offset the expected supply restrictions from the OPEC+ organization. On Monday, three OPEC+ sources told Reuters that the organization intends to discuss further measures to limit oil supply at the meeting on November 26, causing oil prices to rise. Ahead of the OPEC+ meeting on Sunday, investors remained cautious as the oil-producing country group might propose deeper supply restrictions to address global economic growth weakness. The market anticipates that the OPEC+ organization will continue or possibly intensify oil production restriction measures next year. However, Toril Bosoni, Head of the Oil Markets and Industry Division at the International Energy Agency (IEA), told Reuters on Tuesday that there may be a small-scale oversupply in the global oil market in 2024. Traders are likely to focus on the Energy Information Administration's report on changes in crude oil inventories this Wednesday, which will provide a key measure of weekly crude oil and its derivatives inventories.

On the daily chart, technical indicators such as RSI and stochastic oscillators have formed technical divergences corresponding to price levels. The MACD indicator has also crossed above the signal line, suggesting that short-term oil prices may continue to stabilize. The current support levels are seen at $75.59 (upper boundary of the descending channel in the daily chart) and $75.39 (61.8% Fibonacci retracement level from 63.93 to 93.94), with stronger support pointing to $72.35 (low on November 16). Resistance is estimated at $78.80 (Bollinger Band's central axis) and $78.94 (50% Fibonacci retracement level), as well as the $80 level that was not breached last Tuesday, with the next level at the 100-day moving average of $82.09.

Today, it may be considered to go long on crude oil near $76.30, with a stop loss at $76.00 and targets at $77.50 and $78.00.

Spot Gold

In the U.S. market on Wednesday, November 22nd, the gold market showed a subdued performance after the latest employment data unexpectedly improved in the U.S. labor market. Due to better-than-expected employment data, there was a slight sell-off in the gold market. Gold prices continued a slight pullback from the region around $2,007 (near multi-month highs) overnight and remained under pressure below the psychological level of $2,000 during the Asian session on Wednesday. The minutes of the most recent policy meeting held by the Federal Reserve from October 31st to November 1st revealed a hawkish tone, indicating that officials would still be committed to further tightening policies if progress in controlling inflation is lackluster. This is seen as a key factor driving funds away from non-yielding gold. However, policymakers stated that they are not in a hurry to raise interest rates again, reinforcing expectations that the Federal Reserve has reached the peak of interest rates. In addition, the market still believes that the Federal Reserve may begin cutting interest rates at the policy meeting on April 30th to May 1st next year. This did not help the U.S. dollar capitalize on the strong trend reversal since its lowest level since August 31st overnight, providing support for gold prices. Therefore, a prudent approach is to wait for strong follow-up selling and then position for any further decline.

From a technical perspective, gold prices have repeatedly failed to establish upward momentum above the $2,000 level in recent times, which warrants caution for bullish traders. Meanwhile, oscillators on the daily chart remain stable in the positive zone, away from the overbought territory. In this mixed situation, a cautious approach is to wait for some follow-up buying to break through the $2009-$2010 range or the multi-month peak reached in October before further upward movement. At that point, gold may accelerate towards $2007.60 (Tuesday's high) and $2009.50 (76.4% Fibonacci retracement level from $2081.80 to $1810.50), then towards $2038. On the other hand, the $1978-$1976 range seems to be forming short-term support, followed by $1965.50 (Monday's low).

Today, it may be considered to go long on gold near $1986, with a stop loss at $1982 and targets at $1998 and $2002.

AUDUSD

The minutes of the Reserve Bank of Australia (RBA) meeting on November 7th indicated a strong likelihood of a 25 basis point interest rate hike to stabilize inflation expectations. Despite the somewhat hawkish tone in the RBA meeting minutes, the AUD/USD lost its upward momentum and experienced a slight retreat from 0.6580. Notably, the key in the committee's latest median forecast is the assumption of further rate hikes embedded in the data. Compared to other major central banks, Australia's cash rate is relatively low, making such a decision somewhat easier. Although Australia's rates are constrained, the real estate market seems to display resilience, indicating that demand remains a potential concern for the industry and may impact future price increases. Earlier yesterday, RBA Governor Michelle Bullock participated in a panel discussion where she emphasized the evolving inflation situation, initially driven by supply-side issues but more recently showing an increasing role of demand.

On Wednesday, the Australian Dollar traded higher around the 0.6570 level. The AUD/USD may retest yesterday's three-month high at 0.6589, a level within the resistance zone composed of 0.6582 (50% Fibonacci retracement level from 0.6895 to 0.6270), 0.6587 (200-day moving average), and 0.6600 (psychological level). Once the above resistance zone is breached, the next levels to watch could be 0.6647 (250-day moving average) and 0.6656 (61.8% Fibonacci retracement level). On the downside, key support may be the psychological level of 0.6500, followed by 0.6440 (daily chart Bollinger Band's central axis). If this level is breached, the next support level could be 0.6417 (23.6% Fibonacci retracement level).

Today, it may be considered to go long on the Australian Dollar near 0.6520, with a stop loss at 0.6500 and targets at 0.6580 and 0.6685.

GBPUSD

In terms of monetary policy, recent signals from Bank of England (BoE) officials have been consistently hawkish. Governor Bailey stated that food and energy prices still pose upside risks to the inflation outlook, and the BoE may be forced to raise interest rates again. Deputy Governor Ramsden also indicated that UK interest rates could remain elevated for an extended period. The hawkish stance of the Bank of England in the short term may provide support for the British Pound. However, considering that the UK economy still faces the risk of recession, the maneuvering space for the BoE's monetary policy is relatively limited. The subsequent support of monetary policy for the British Pound may be constrained. On the fundamental side, the negative impact of continued rate hikes on the UK economy is gradually evident, with October UK retail sales data falling 2.7% year-on-year, below expectations and previous figures. Manufacturing and services PMI data continue to be below the expansion line, indicating that the growth prospects of the UK economy are still not optimistic. Weak economic fundamentals are unlikely to provide upward momentum for the British Pound.

From a technical perspective, the GBP/USD is operating below the upper boundary of the Bollinger Bands on the daily chart at 1.2592. The MACD indicator shows strengthened red momentum bars, suggesting that the British Pound still has upside potential. In summary, in the short term, there may be a possibility of further upward movement for the GBP/USD. Resistance levels to watch on the upside are at 1.2590 (50% Fibonacci retracement level from 1.3143 to 1.2037) and 1.2600 (psychological level), with the next level at 1.2670 (static level since August). However, in the medium to long term, the current weak fundamentals are not sufficient to reverse the long-term weakness of the British Pound, and the rebound space is relatively limited. On the downside, the first support is at 1.2459 (38.2% Fibonacci retracement level). If the daily closing price is below 1.2460-1.2450, it may open the door for a deeper adjustment towards 1.2400 (psychological level).

Today, it is suggested to go long on the British Pound near 1.2470, with a stop loss at 1.2445 and targets at 1.2530 and 1.2540.

USDJPY

According to Reuters, the Japanese government lowered its economic outlook for Japan for the first time in 10 months on Wednesday. The reason cited was weak demand, which has weighed on capital spending and consumer spending. Despite the Bank of Japan removing obstacles to rising bond yields (which typically lead to currency appreciation), the yen has struggled to maintain sustained strength. BOJ Governor Ueda failed to provide detailed information on when the central bank might abandon its ultra-loose policy, exacerbating the existing lack of momentum. However, he elaborated on the prospect of exiting negative interest rates if upcoming inflation and wage growth data provide convincing evidence. After the release of the Federal Reserve meeting minutes, the market initially experienced volatility, but the USD/JPY remained stable, even as there was a clear disconnect between the hawkish tone of the Federal Reserve and the more widespread expectation in the market that the Fed will start a rate-cutting cycle.

From a technical perspective, the weakening US dollar seems to be contributing to the decline of USD/JPY, but the yen is strengthening against some major currencies. The net effect is a softening of USD/JPY, as the currency pair is trading near the 50-day moving average around 149.50, which has so far acted as dynamic support. Discussions about forex intervention may subside as energy prices fall and the yen strengthens. Support for USD/JPY can be found in the 147.40 (89-day moving average) and 147.15 (Tuesday's low) areas, followed by 146.15 (an upward support trendline stretching from the low on July 14th at 137.23). If a rebound is to be seen, the 50-day moving average at 149.50 and 150.00 (psychological level) would now form potential dynamic resistance, with the next level to watch at 150.30 (lower boundary of the horizontal channel). However, the bearish trend has not yet broken the oversold condition of the RSI, so there may still be more room for movement before becoming overheated.

Today, it is suggested to go short on the US dollar near 149.85, with a stop loss at 150.20 and targets at 148.50 and 148.35.

EURUSD

On Wednesday, the Euro/US Dollar declined and appears to have interrupted the consolidation pullback from the 1.0965 region, the highest level since August 11th, reached the previous day. The Euro/US Dollar is currently trading around 1.0880, still influenced by the dynamic of the US dollar. The Euro/US Dollar has entered a bullish consolidation phase, oscillating within a narrow trading range below 1.1000 (psychological level). More analysts believe that the Federal Reserve has ended its policy tightening cycle, and the US dollar remains subdued, near its lowest levels in over two months. In fact, the market has ruled out the possibility of further rate hikes by the Federal Reserve and anticipates that the Fed may soon begin a rate-cutting cycle. Meanwhile, expectations for the future actions of the Federal Reserve have weighed on the 10-year US Treasury bond yields, pushing them to a two-month low. Additionally, the risk-on environment is considered to suppress the safe-haven US dollar, providing a tailwind for the Euro/US Dollar. Furthermore, recent hawkish comments from European Central Bank officials, denying expectations of an early rate cut, are expected to boost the Euro/US Dollar. Therefore, the resistance for the Euro/US Dollar on the upside is minimal.

The Euro/US Dollar retraced to around 1.0880 after reaching a three-month high of 1.0964 on Tuesday. As the US dollar remains weak, the decline in the Euro/US Dollar is seen as a technical consolidation. Stable US bond yields and a pullback in stock prices favor the US dollar, while the euro lags behind. Despite the retracement in the Euro/US Dollar, the trend continues to point upward, with the daily chart showing the Euro/US Dollar remaining resilient above the critical 200-day moving average (1.0807). The relative strength indicator (RSI) is decreasing from overbought levels, indicating a potential consolidation before the Euro/US Dollar resumes its upward move. If it holds above 1.0964, there is a possibility of testing 1.1000 and 1.1042 (August 4th high). The next level to watch is the high on July 27th at 1.1149. The currency pair remains in a bullish trend, but suggests that the Euro/US Dollar may undergo further consolidation. Strong support should be present around 1.0816 (lower boundary of the daily Bollinger Bands) and 1.0807 (200-day moving average), followed by the high on November 9th at 1.0725. This area may attract buyers.

Today, it is suggested to go long on the Euro near 1.0860, with a stop loss at 1.0835 and targets at 1.0925 and 1.0935.

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