Weekly data: Fiber and Gold price action 

Antreas Themistokleous, Exness Market Analyst

This preview of weekly data looks at EURUSD and XAUUSD where economic data coming up later this week are the main drivers in the markets for the near short term outlook. 

This article was submitted by Antreas Themistokleous, an analyst at Exness.

 

 

 

The most important economic data for this week are:

Tuesday:

  • RBA interest rate decision at 03:30 AM GMT where the market is expecting that the interest rates will remain stable at 4.35%. In the event however that we have a surprise hike or cut by the Reserve bank then it might create minor gains or losses for the Aussie Dollar respectively.  
  • US Services PMI at 15:00 GMT for the month of November. The consensus is for a slight increase of 0.2 points reaching 52. This might be rather bullish news for the Dollar since it would mean that the services sector in the States is still expanding for the whole of 2023 so far.
  • US job openings is expected to be released at 15:00 GMT. The expectations are for a decline in the figure of around 200,000 jobs but this might not have a significant effect on the dollar since the data is for the month of October and also all eyes will be focusing on the job report later this week for a more accurate conclusion on the labor market. 

Wednesday:

  • Australian GDP growth rate  at 12:30 AM GMT. The market consensus is for a decline on the figure to reach 1.8% against the previous 2.1%. If the consensus is confirmed then it could potentially create some short term losses on the Australian dollar against its pairs. 

Thursday: 

  • Australian Balance of trade at 12:30 AM GMT where the expectations are for an increase reaching A$7.5 Billion in trade surplus. This might not have a significant effect on the Aussie Dollar since the data are for the month of October and might already have been priced in. 
  • Chinese Balance of trade at 03:00 AM GMT where the figure for the month of November is expected to increase from $56.53 Billion to $58.1 Billion. If this is broadly accurate then it might create some gains for the currency. 

Friday: 

  • US Job report at 13:30 GMT where the non farm payrolls and unemployment rate are going to be published. The expectations for the NFP is for an increase to reach 180,000 against the previous recording of 150,000. If these expectations are correct, we might see that the dollar could move up in various pairs in the aftermath of the release. On the other hand the unemployment rate is expected to remain static at 3.9%. 

EURUSD, daily

 The US dollar struggled to regain strength as markets reacted to cautious remarks from Federal Reserve Chair Jerome Powell in his speech last Friday. Powell stated that US monetary policy was slowing the economy as expected, and while the Fed is prepared to tighten policy further if needed, traders believe the rate-hike cycle is over. According to the Fedwatch tool the probabilities of a rate cut increased for the meeting of March, reaching around 52%, against the previous expectations of the cuts starting in the June meeting. The upcoming non-farm payrolls report will be a significant event for the US dollar while the euro slipped after eurozone inflation data last Thursday fueled expectations of ECB rate cuts. 

On the technical side the price has found sufficient resistance around the $1.10 price area which was the psychological resistance of the round number as well as an inside resistance area since late June. The price has corrected to the downside after some bearish news for the Euro last week and is currently testing the support of the 23.6% of the daily Fibonacci retracement level with some potential to continue moving to the downside especially if some bullish news for the Dollar are published later this week. If the correction continues in the near short term then the first level of major technical support might be found around the $1.073 price area which consists of the 50% of the daily Fibonacci retracement level, the lower band of the Bollinger bands as well as the crossing of the 50 day moving average and the 100 day moving average,

Gold-dollar, daily

Gold price reached more than $2,100 on Monday’s session and hit a new all time high. This was mainly due to the resumption of the ongoing war in the Middle East after the ending of the ceasefire of last week. These price increases are likely due to a weaker US Dollar, a more dovish Federal Reserve, and a positive risk sentiment in the market. The US Dollar has been on a long-term bearish trend, with the expectation of rate cuts by the Fed.

From the technical point of view the price broke above all technical indicators and managed to reach a new all time high. Currently the price corrected below the $2,100 mark and is testing the resistance of the upper band of the Bollinger bands while the Stochastic oscillator is on the move to reach its neutral levels down from the extreme overbought area. For the time being the faster moving average (50 days) is trading above the slower one (100 days) indicating that the overall bullish momentum is still in effect. If the price continues to correct to the downside then the first area of possible support might be found around the $2,000 which consists of the psychological support of the round number and is also just below the 78.6% of the weekly Fibonacci retracement level. 

 

Disclaimer: the opinions in this article are personal to the writer and do not reflect those of Exness or Finance Feeds.

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