As the North America session begins the USD is lower, US yields are lower and the broader indices are lower (although the Dow is trading above and below unchanged).
Crude oil is marginally higher after an up and down day on Tuesday. Gold is higher after rebounding by 0.31% yesterday a day after plunging 3.35% on Monday (today it is up around 0.75% at the start of the day). Finally, Bitcoin is higher by $1100 or 1.22% at $93050 currently. The price fell 3 of the last 4 days after pushing Bitcoin 100K on Friday (peaked at $99800).
The European Central Bank’s Isabel Schnabel has indicated that there is limited scope for further rate cuts, suggesting a gradual move toward neutral rates (estimated to be in the range of 2-3%) rather than lowering them further. Schnabel emphasized that the ECB should not adopt an overly accommodative stance and prefers a gradual approach to rate adjustments. She highlighted the need to see services inflation decline, while also noting that the impact of previous tightening measures is diminishing. Schnabel believes current rates may already be close to neutral, with the economy showing signs of stagnation but no immediate risk of recession. The hawkish comments sent the EURUSD higher.
In other central bank news overnight, the Reserve Bank of New Zealand cut rates by 50 basis points as expected. However, the market took it as a by the fact opportunity. The general dollar selling theme also helped to push the NZDUSD higher despite the central bank cut in rates.
The US economic calendar is chop-a-bloc with releases ahead of the Thenksgiving holiday tomorrow:
8:30 AM:
- Prelim GDP q/q: Forecast 2.8% | Previous 2.8%
- Prelim GDP Price Index q/q: Forecast 1.8% | Previous 1.8%
- Unemployment Claims: Forecast 216K | Previous 213K. Continuing Claims Forecast 1.908M | Previous 1.908M
- Durable Goods Orders m/m: Forecast 0.5% | Previous-0.7%
- Core Durable Goods Orders m/m: Forecast 0.2% | Previous0.5%
- Goods Trade Balance: Forecast -102.2B | Previous -108.2B
- Prelim Wholesale Inventories m/m: Forecast 0.0% | Previous-0.2%
10:00 AM:
- Core PCE Price Index m/m: Forecast 0.3% | Previous 0.3%, PCE price index Forecast 0.2%| Previous 0.2%
- Pending Home Sales m/m: Forecast-2.0% | Previous7.4%
- Personal Income m/m: Forecast 0.3% | Previous 0.3%
- Personal Spending m/m: Forecast 0.3% | Previous 0.5%
10:30 AM:
- Crude Oil Inventories: Forecast -0.605M | Previous 0.545M
- Gasoline: Forecast -0.046M| Previous 2.054M
Looking at the US debt market yields are lower:
- 2 Year 4.206%, -4.7 basis points
- 5 year 4.126%, -5.3 basis points
- 10 year 4.257%, -4.4 basis points
- 30 year 4.446%, -3.3 basis points
IN the premarket for the US stocks (7:44 am ET), the broader indices are lower. Dell disappointed after the close helping to push prices lower:
- Dow, Unchanged. Yesterday the index rose 123 points or 0.28%.
- S&P, - 7.88 points. Yesterday the index rose 34.26 points or 0.57%.
- Nasdaq -50 points. Yesterday the index rose 119.46 points or 0.63%
Dell is trading down $-16.79 or -11.75%.
Taking a look at the technical driving the FX market:
EURUSD: The EUR/USD closed yesterday near its declining 100-hour moving average, currently at 1.0477. During the Asian session, the pair fluctuated around this level, with most of the price action remaining above it. In the European session, comments from Schnabel fueled bullish momentum, driving the price above the 200-hour moving average at 1.0520 to a high of 1.05395, just shy of the weekly peak at 1.0544 (reached yesterday). Over the past few hours, the price has oscillated around the 200-hour moving average, but the latest hourly bar has found support at this level, giving buyers an edge. Sustaining movement above the 200-hour moving average would keep the bullish bias intact, with the next targets being the weekly high at 1.0544 and the 38.2% retracement of the November trading range at 1.05628.
GBPUSD: The GBP/USD tested the 100-hour moving average (1.25712) during the Asian session and successfully broke above it with momentum, climbing toward the 200-hour moving average at 1.26129. After a modest pullback, support buyers emerged near 1.2596, providing a base for renewed upward momentum heading into the US session. The pair has since pushed above the 200-hour moving average and the highs from Monday and Tuesday at 1.2613, reaching a new high of 1.26185. For buyers, holding above the 200-hour moving average and the 1.2613 level is critical to maintaining bullish momentum. Those looking for further upside could consider 1.2596 as a more conservative risk level, with a break below that point likely disappointing bulls. On the upside, the next key targets are 1.2660, followed by natural resistance and the 38.2% retracement near 1.2700, marking important levels for continued gains.
USDJPY: The USD/JPY experienced a sharp decline yesterday, closing below the key swing area between 153.26 and 153.459, signaling a bearish tilt. This momentum carried into today, with further selling pressure emerging after a break below the 200-hour moving average on the 4-hour chart. The bearish sentiment intensified as the pair fell below the 200-day moving average at 151.982, a critical support level. The price briefly dipped beneath the early November low of 151.275, reaching a session low of 151.22. A sustained break below this level could pave the way for further downside. On any rebound, the 200-day moving average at 151.983 is expected to act as a strong resistance. A move back above this level would undermine the bearish breakout, especially considering the price had remained above the 200-day moving average since November 6.
NZDUSD:The Reserve Bank of New Zealand (RBNZ) cut rates by 50 basis points as expected, prompting a "buy the fact" move that drove NZD/USD higher, supported by USD selling and favorable technical factors. The price broke above the 100-hour and 200-hour moving averages (currently at 0.58478 and 0.58628, respectively), with a corrective pullback and basing near the 200-hour MA giving buyers confidence to push higher. The pair has surpassed the 38.2% retracement of the November range and entered a swing area between 0.58919 and 0.59030, though resistance near the falling 100-bar moving average on the 4-hour chart at 0.59053 has slowed further gains. Sustaining levels above 0.5900–0.5905 would strengthen the bullish bias, while the 200-hour MA at 0.5863 now serves as key support. A break below this level could shift momentum back to sellers, leaving the pair in a battle between support and resistance as buyers make their play