1. Forex Market Insight
The Eurozone Composite PMI rose to 47.8 in November from 47.3 last month, but remained consistent with negative GDP growth in the fourth quarter.
Details in the data suggest that eurozone economic activity may have weathered the trough, with a slower rate of decline in new orders and rapidly easing supply constraints, and the eurozone economy is expected to contract 0.3% in the fourth quarter compared to the previous quarter, although there are downside risks to this forecast.
Eurozone retail sales fell 1.8% in October from a year earlier and are unlikely to reverse soon, as consumers are scaling back spending due to a sharp contraction in purchasing power.
(EUR/USD 1-hour Chart)
We focus on the 1.0586 line today. If the EUR runs below the 1.0586 line, then pay attention to the support strength of the two positions of 1.0529 and 1.0440. If the strength of EUR rises over the 1.0586 line, then pay attention to the suppression strength of the two positions of 1.0642 and 1.0697.
GBP Intraday Trend Analysis
The Bank of England is expected to slow the pace of rate hikes to 50 bps at next week’s meeting from 75 bps in November as medium-term inflation expectations and labor demand show signs of slowing.
With no major surprises in the December job market report and November CPI data, we expect a majority of MPC members to vote for a modest rate hike.
Moreover, there is a lag in the transmission of the MPC’s decision, so most of the impact of the rate hike is yet to be seen.
(GBP/USD 1-hour Chart)
GBP is mainly focused on the 1.2147-line today. If GBP runs below the 1.2147-line, it will pay attention to the suppression strength of the two positions of 1.1941 and 1.1762. If GBP runs above the 1.2147-line, then pay attention to the suppression strength of the two positions of 1.2276 and 1.2478.
2. Precious Metals Market Insight
Gold retreated from a nearly 5-month high on Monday, 5th December 2022, retreating nearly 2%. The US ISM non-manufacturing PMI rose to 56.5 in November, and the Fed still has a long way to go in tightening its rate hike cycle, and the market still believes the Fed will not cut rates in 2023.
The market believes the Fed appears poised to raise rates two more times, 50 basis points each to 5%, and to maintain that level for some time. This is similar to the situation between June 2006 and September 2007, when the Fed completed a tightening cycle that kept rates high.
(Gold 1-hour Chart)
Gold pays attention to the 1768-line today. If the gold price runs below the 1768-line, then it will pay attention to the support strength of the 1747 and 1732 positions. If the gold price breaks above the 1768-line, then pay attention to the suppression strength of the two positions of 1783 and 1793.
3. Commodities Market Insight
WTI Crude Oil
Oil prices fell more than 3% on Monday, 5th December 2022, the U.S. November ISM non-manufacturing PMI better than expected, increasing expectations of a Fed rate hike and a stronger dollar, dragging down oil prices, in addition, Saudi Arabia cut the price of most oil sold to Asia in January, down to $3.25 per barrel of lift-off.
(Crude Oil 1-hour Chart)
Oil prices focus on the 77.54- line today. If the oil price runs above the 77.54 -line, then focus on the suppression strength of the two positions of 79.07 and 80.13. If the oil price runs below the 77.54 -line, then pay attention to the support strength of the two positions of 76.07 and 73.52.
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