US Dollar Index

Midweek saw an overall rise in the US dollar against major currencies. The market's belief that the Federal Reserve won't raise interest rates in the near term dented hopes and bets for a swift return to normal interest rate policies. The US Dollar Index surged to levels between 104.00 and 104.20. On Thanksgiving Thursday, the dollar successfully withstood selling pressures from the past few days and weeks. The recently released minutes of the Federal Reserve's interest rate decision revealed unanimous agreement among board members that a rate cut is not on the agenda for the upcoming meetings. This poured cold water on market expectations of a rate cut, even in December. Like a devil playing a role in the dollar's turnaround, economic data might aid further gains in the US Dollar Index. Aside from durable goods and initial jobless claims, the University of Michigan's consumer inflation expectations data could confirm that the Fed's cautious approach to policy easing is the right one. While this is final data, any upward revisions would favor further strengthening of the US dollar later this week.

The dollar broke the strategy that was supposed to push the US Dollar Index below 103.00 this week. The minutes of the Federal Reserve meeting provided support, showing that all board members unanimously believe that a rate cut is far from an option. The market was startled to see a significant inflow of funds into the dollar, and the US Dollar Index attempted to rise above the 200-day moving average (103.61). It needs a daily closing price above this level to consolidate the area. Further rebound is expected towards the 100-day moving average near 104.21 and Wednesday's high of 104.20. If the US Dollar Index can close in the 104.20-104.21 range later this week, it is expected to return to levels near the 80-day moving average (104.96) and 105.00 (psychological level). The 200-day moving average (103.61) will attempt to act as a key support level to resist any downward movement. If the index breaks this level again later this week, the level of 103.46 (50% Fibonacci retracement of 99.57 to 107.34) will come into play. The next level to watch is 103.17 (Tuesday's low). During the rest of the Thanksgiving holiday, with many US market participants on vacation, significant downside movements are possible.

Consider shorting the US Dollar Index near 103.95 today, stop loss: 104.15; targets: 103.40, 103.35.

WTI Crude Oil

During Thursday's Asian session, WTI crude oil extended its decline, trading around $76.20 per barrel. Earlier on Thursday, the OPEC Secretariat indicated that the OPEC+ meeting scheduled for November 25-26 might be postponed to November 30. This is expected to weigh on oil prices, sparking concerns about global crude oil supply. The price of crude oil is under downward pressure, and since weak economic data from Europe and China, there has been a significant shift in U.S. fundamental data, leading to continued declines in oil prices. If the global economy contracts in the coming months and quarters, pessimistic economic outlooks are likely to cause prospective markets to anticipate a decrease in oil demand. OPEC and its allies (OPEC+) are set to reconvene on Saturday, as speculation about extending supply cuts continues to grow, which typically leads to an increase in oil prices. Breaking news confirms that the meeting has been postponed to November 30, with analysts suggesting that the reason for the delay may be internal differences within the group, although this has not been confirmed.

From a technical perspective, WTI crude oil has lacked the momentum to rebound towards the 200-day moving average at $77.87 in recent weeks. However, as long as it holds above the support level of $75.60 (Monday's low), there is still potential for WTI crude oil to break above the 200-day moving average at $77.87 and rise towards the $80-82 per barrel range. Current support levels are seen at $75.59 (upper trendline of the descending channel on the daily chart) and $75.39 (61.8% Fibonacci retracement level of the move from $63.93 to $93.94). Larger support points to $72.35 (November 16 low).

Consider going long on crude oil near $76.00 today, with a stop loss at $75.70 and targets at $77.20 and $77.50.

Spot Gold

Trading activity remains subdued during the holiday, and on November 23, spot gold prices stabilized at high levels. In Thursday's Asian session, gold attracted some buying interest on dips and recovered some of the declines from the previous day near the monthly peak. The U.S. dollar rebounded in the overnight market. Gold, however, encountered resistance once again near the strong $2007 level and retraced. In the past few trading days, gold has experienced significant gains, primarily because the market has started to anticipate that the earliest the Federal Reserve may cut interest rates is in May 2024, with a notable decline in long-term U.S. bond yields. Although the Fed remains cautious and even somewhat hawkish, the market is choosing to temporarily overlook this. However, investors should not ignore the fact that changes in Fed monetary policy are actually data-driven. Investors need to pay attention to each upcoming significant U.S. data release and the resulting trends in U.S. bond yields and the U.S. dollar. In the relatively quiet trading period around the U.S. Thanksgiving holiday, investors need to exercise caution before initiating new bullish bets on gold. However, the dovish outlook of the Fed may continue to be a tailwind for gold, indicating that a significant consolidation or decline in gold prices may still be seen as a buying opportunity, and the downward trend may be limited.

From the current trading perspective, if gold prices once again break through the $2000 psychological level, they will face strong resistance near $2007. If some follow-up buying pressure emerges, leading to a subsequent breakthrough of the multi-month high reached in October at $2009.50, it will be considered a new trigger point for bullish traders. At that time, gold prices may further accelerate towards the $2022 resistance level and then approach the next resistance near $2040. On the other hand, the $1989-$1988 region may constitute support, followed by the $1979-$1978 region. If gold prices cannot hold the above support levels, it may trigger aggressive technical selling pressure, pushing gold prices back to the 200-day moving average, currently around $1940. If it clearly breaks below this level, the recent bias may favor bearish traders.

Consider going long on gold near $1988 today, with a stop loss at $1985 and targets at $1999 and $2005.

GBPUSD

The UK Chancellor of the Exchequer, Jeremy Hunt, announced the Autumn Statement, outlining plans to reduce debt, cut taxes, and incentivize employment. He emphasized collaboration with the Bank of England to achieve the Office for Budget Responsibility's (OBR) target of a 2.0% inflation rate by 2025. Despite the expected positive impact on inflation and GDP, Hunt admitted to revising economic growth forecasts, anticipating a GDP growth of only 0.7%, lower than the OBR's March prediction of 1.8%. On Thursday, the UK's November preliminary S&P Global/CIPS Purchasing Managers' Index (PMI) data will be released. Additionally, U.S. markets will be closed on Thursday for Thanksgiving. On Friday, the U.S. will publish the November preliminary S&P Global Manufacturing and Services PMI, with expectations of a decline.

The GBP/USD attempted a rebound in the Asian session on Thursday, edging slightly higher towards 1.2500 after pausing its three-day uptrend in the previous trading day. Despite recent pullbacks, the Relative Strength Index (RSI) indicator on the 4-hour chart remains above 50, indicating hesitancy among bears to continue betting on a sustained decline in the British Pound. The first support level is the 50-hour moving average at 1.2434, followed by 1.2373 (low from November 17). On the upside, 1.2570 (Thursday's high) may act as a temporary resistance, followed by the psychological level of 1.2600.

Consider going long on the British Pound near 1.2510 today, with a stop loss at 1.2485 and targets at 1.2570 and 1.2580.

USDJPY

On Wednesday, the Japanese Yen retraced some recent strong gains against the US Dollar, marking the second consecutive day of weakness. Against the backdrop of hawkish minutes from the Federal Reserve's meeting on Tuesday, better-than-expected US labor market data and rising consumer inflation expectations aided the US Dollar in rebounding from its lowest levels since August 31. This robust rebound allowed the USD/JPY to stabilize firmly after touching the 147.15 region, a two-month low, on Tuesday. However, in the Asian session on Thursday, the USD/JPY struggled to extend this trend, encountering fresh selling pressure. Bets that the Federal Reserve won't hike interest rates further and may start cutting rates in the first half of 2024 could impede the US Dollar's upward momentum. Additionally, market expectations that the Bank of Japan's policy stance might shift towards a more hawkish position forced the USD/JPY to end its two-day rally, reversing some of the overnight strong gains. With limited trading activity due to the US Thanksgiving holiday, traders are choosing to reduce positions during the Asian session.

From a technical perspective, the USD/JPY is currently near the Wednesday oscillation high of 149.75, appearing to serve as immediate resistance, followed by the convergence around 150.00. This convergence includes the 200-hour moving average on the 4-hour chart at 149.98 and 150.08 (38.2% Fibonacci retracement level of the rebound from 147.15 to 151.91). Beyond that, the 100-hour moving average on the 4-hour chart, currently around the 150.30 area, could become relevant. A clear break above this level would negate any recent bearish tendencies, and the USD/JPY could potentially recover the 151.00 level, aiming to challenge the year's highest point before 151.94. On the downside, breaking below 149.00 and 148.96 (61.8% Fibonacci retracement level) could pave the way for a decline towards 148.00 (Wednesday's low). Following that is the monthly consolidation range's low at 147.15, touched on Tuesday.

Consider going short on the US Dollar near 149.80 today, with a stop loss at 150.10 and targets at 148.80 and 148.55.

EURUSD

In the early Asian session on Thursday, the Euro/US Dollar saw a modest rebound, trading just above 1.0900. With the US Thanksgiving holiday on Thursday, the market remains calm. Currently, the Euro/US Dollar is trading near 1.0903. On Wednesday, Joachim Nagel, the President of the German central bank, stated that interest rates in the Eurozone are close to their peak. Nagel emphasized that economic data would determine whether more tightening measures should be introduced. Meanwhile, Luis de Guindos, Vice President of the European Central Bank, stated that it is too early to discuss rate cuts, and ECB policy depends on data, with communication being very clear. On the US Dollar front, the initial jobless claims unexpectedly dropped to 209,000 in the week ending November 17, marking the largest decline since June, while continuing jobless claims fell from 1.862 million to 1.840 million. The University of Michigan Consumer Sentiment Index for November rose from the preliminary reading of 60.4 to 61.3 but has declined for the fourth consecutive month. After the data release, the US Dollar attracted some buying interest, putting pressure on the Euro/US Dollar.

From a technical perspective, the Euro/US Dollar failed to hold above 1.0965 (Tuesday's high) and retreated further. On Wednesday, the Euro/US Dollar encountered resistance at 1.0920, and then it declined again but found support near 1.0850. If it falls below 1.0850, the downtrend may continue towards the next significant support at 1.0800, followed by 1.0792 (100-day moving average). Therefore, if the above levels are breached, the Euro/US Dollar could extend its decline to 1.0748 (20-day moving average), with the next level at 1.0706 (50% Fibonacci retracement level from 1.0448 to 1.0965). Once the Euro resumes its upward trend and manages to rise above 1.0965 again, there is a possibility of testing 1.1000 (psychological level) and 1.1042 (August 4 high). The next level to watch is the high reached on July 27.

Consider going long on the Euro near 1.0880 today, with a stop loss at 1.0855 and targets at 1.0945 and 1.0955.

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