Weekly Technical Analysis For December 9th to 13th, 2019
We got a strong US Jobs Report last Friday. The US created 260K new jobs in November, marking the biggest gain. The unemployment rate slipped to 3.5% from 3.6% and matched a 50-year low. The average wage paid to American workers rose 0.2%, to $28.29 an hour. The 12-month rate of hourly wage gains slipped to 3.1% from 3.2%. The EURUSD pair dropped to the main support level of 1.1052 after the US Non-Farm Payrolls.
In Eurozone, Gross Domestic Product rose a seasonally adjusted 0.2% in the third quarter, matching the growth of 0.2% in the previous number. Year-on-year, GDP growth in the single currency bloc rose 1.2% in the third quarter, in line with forecasts.
In the upcoming week, we will closely watch the US CPI inflation figures on Wednesday, which should lend further support to the notion that inflation has returned to the Fed’s target.
Consumer prices are expected to have risen 0.2% last month and 2.0% over the prior year, according to estimates. Excluding the cost of food and fuel, core inflation is projected to stay at 2.3% on a year-over-year basis.
Besides the inflation data, the Fed is scheduled to hold its policy meeting on Wednesday. There is no interest rate change expected from the Fed. Federal Reserve Chair Powell made clear before that there would be no further cuts to U.S. interest rates barring a major deterioration in the economy. Powell will hold a press conference following the meeting, with awaiting his insights on the policy outlook.
The ECB will announce its rate decision and forward guidance on Thursday and outgoing Christine Lagarde may announce further actions at the press conference. This week's meeting will be the first monetary policy meeting for Lagarde.
Keep your eye on the 1.1052 main support level in the EURUSD pair. As long as the price stays above 1.1052 on a daily basis, the downward movement may be limited and the resistance level can be found at 1.1114 again. On the other hand, if the price moves down 1.1052, we will see 1.1007 as the next support level
Support : 1.1052 - 1.1007 - 1.0965
Resistance : 1.1114 - 1.1165 - 1.1237
GBP/USD: The UK is gearing up for a general election after MPs voted for a 12 December poll. The general election will effectively offer the UK another vote on how they want Brexit to proceed. The latest polls show the Conservative Party is a big lead.
The Sterling hit its highest level since May 2019 versus the US Dollar on increasing confidence that the general election on Dec. 12th will return the Conservative Party to power with a healthy majority.
Focus on the 1.3136 main support level in the GBPUSD pair. If the pair stays above 1.3136 on a four hourly basis, the main resistance level will be at 1.3231. In contrast, if the pair drops below 1.3136, the next daily support level can be found at 1.3046.
Support: 1.3136 - 1.3046 - 1.2947
Resistance: 1.3231 - 1.3313 - 1.3392
GOLD: Prices of the safe-haven gold fell last Friday after strong US Non-Farm Payrolls data. If the downward movement continues below 1466, we will follow 1453 and 1440 as main support levels. On the upside, if the price rises above 1466, the next resistance level can be found at 1478.
Support: 1453 - 1440 - 1421
Resistance: 1466 - 1478 - 1492
USD/CAD: The USD/CAD pair moved up above the main level of 1.3233. If the rise continues, we will follow 1.3287 as daily resistance level. In contrast, If the price drops below 1.3233, we will see the main support level at 1.3181.
Support: 1.3233 - 1.3181 - 1.3123
Resistance: 1.3287 - 1.3344 - 1.3410
USD/TRY: Turkey Central Bank is going to announce its monetary policy on Thursday, December 12. Most economists expect the Central Bank of Turkey to deliver a 150bp rate cut. The Turkish lira's reaction will depend on whether the CBT over-delivers versus market expectations
The USD/TRY pair showed an upward movement above the 5.7679 daily support level. If the pair stays above 5.7679 on a daily basis, the rise may gain more power and we will see the resistance level at 5.9763. On the other hand, if the pair breaks down 5.7679, the next support levels will be at 5.6027.
Support: 5. 7679 - 5.6027 - 5.4538
Resistance: 5.9763 - 6.1475 - 6.3364
NZD/USD: The NZD/USD pair is currently trading above the 0.6543 main support level. If the price stays above 0.6543 on a daily basis, the rise may continue and we will see a major resistance level at 0.6611.On the downside. If the price drops below 0.6543, the next support level will be placed at 0.6488.
Support: 0.6543 - 6488 - 0.6425
Resistance: 0.6611 - 0.6673 - 0.6728
EUR/JPY: The EUR/JPY pair is now trading below the 120.13 daily level. If the currency stays below 120.13 on a daily basis, we will watch the support level at 119.49. On the other hand, If the pair rises above 120.13, the next resistance level is holding at 120.75
Support: 119.49 - 118.73 - 118.12
Resistance: 120.13 - 120.75 - 121.59