Stacked US calendar ahead of holiday

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Today’s report: Stacked US calendar ahead of holiday

US equities continue to hold up just off record highs, though we have seen some cracks on the back of rising volatility in rates and FX markets. Now that we know Fed Chair Powell will remain at the helm, the market is getting a little more serious about pricing in some policy normalization.

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Chart talk: Technical & fundamental highlights

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EURUSD – technical overview

Setbacks have extended to retest the critical 61.8% fib retrace off the 2020 low to 2021 high move. Technical studies are now tracking in extended territory on the weekly chart, warning of the need for a corrective bounce ahead. Look for the market to hold up on a weekly close basis above the 61.8% fib retrace around 1.1275.

  • R2 1.1465 – 15 November high– Strong
  • R1 1.1386 - 16 November high – Medium
  • S1 1.1226 - 23 November/2021 low – Medium
  • S2 1.1200 – Figure – Strong

EURUSD – fundamental overview

The Euro got a small bump of fresh yearly lows on the back of solid Eurozone PMI data. However, yield differentials and a worsening COVID situation in Europe continue to weigh. Key standouts on today’s calendar come in the form of German Ifo reads, UK industrial trends, and a batch of US releases featuring durable goods, GDP, initial jobless claims, core PCE, personal spending, new home sales, and Michigan sentiment.

EURUSD - Technical charts in detail

GBPUSD – technical overview

The market is in a correction phase in the aftermath of the run to fresh multi-month highs earlier this year. At this stage, additional setbacks should be limited to the 1.3200 area ahead of the next major upside extension towards a retest and break of critical resistance in the form of the 2018 high.

  • R2 1.3608 – 9 November high – Strong
  • R1 1.3514 – 18 November high – Medium
  • S1 1.3342 – 23 November/2021 low – Medium
  • S2 1.3300 – Figure – Medium

GBPUSD – fundamental overview

More weakness for the Pound after discouraging composite PMI reads and dovish comments from BOE Haskel who prefers to wait on rate hikes. Key standouts on today’s calendar come in the form of German Ifo reads, UK industrial trends, and a batch of US releases featuring durable goods, GDP, initial jobless claims, core PCE, personal spending, new home sales, and Michigan sentiment.

USDJPY – technical overview

The longer-term trend is bearish despite the recent run higher. Look for additional upside to be limited, with scope for a topside failure and bearish resumption back down towards the 100.00 area. It would take a clear break back above 116.00 to negate the outlook.

  • R2 115.50 – Psychological – Strong
  • R1 115.24 – 24 November/2021 high – Medium
  • S1 113.58 – 19 November low – Medium
  • S2 112.72 – 9 November low – Strong

USDJPY – fundamental overview

The Yen has extended yearly lows against the Buck this week. Yield differentials are clearly having a bigger impact after the market priced in a more hawkish Fed path on the Powell reappointment. Key standouts on today’s calendar come in the form of German Ifo reads, UK industrial trends, and a batch of US releases featuring durable goods, GDP, initial jobless claims, core PCE, personal spending, new home sales, and Michigan sentiment.

AUDUSD – technical overview

The Australian Dollar has been in the process of a healthy consolidation following the impressive run towards a retest of the 2018 high earlier this year. At this stage, there are signs of the market wanting to turn back up and any setbacks should be well supported down into the 0.7200 area. Look for a weekly close above 0.7500 to strengthen the outlook and force a shift in the structure.

  • R2 0.7371 – 15 November high – Strong
  • R1 0.7305– 17 November high – Medium
  • S1 0.7200 – 24 November low – Medium
  • S2 0.7170 – 29 September low – Strong

AUDUSD – fundamental overview

A round of healthy Aussie PMI readings and another well supported dip in US equities have been behind the latest recovery in the Australian Dollar. Key standouts on today’s calendar come in the form of German Ifo reads, UK industrial trends, and a batch of US releases featuring durable goods, GDP, initial jobless claims, core PCE, personal spending, new home sales, and Michigan sentiment.

USDCAD – technical overview

Finally signs of a major bottom in the works after a severe decline from the 2020 high. A recent weekly close back above 1.2500 encourages the constructive outlook and opens the door for a push back towards next critical resistance in the 1.3000 area. Any setbacks should be well supported into the 1.2200s.

  • R2 1.2775 – 29 September high – Strong
  • R1 1.2745 – 23 November high – Medium
  • S1 1.2585 – 19 November low – Medium
  • S2 1.2492 – 16 November low – Strong

USDCAD – fundamental overview

Canada factory sales came in well above expectation, oil recovered quite a bit and US equities were supported on dips yet again. All of this was behind the impressive recovery in the Canadian Dollar on Tuesday. Key standouts on today’s calendar come in the form of German Ifo reads, UK industrial trends, and a batch of US releases featuring durable goods, GDP, initial jobless claims, core PCE, personal spending, new home sales, and Michigan sentiment.

NZDUSD – technical overview

The market has entered a period of consolidation after running up to a yearly and multi-month high. Back above the April high at 0.7317 would be required to force a shift in the structure.

  • R2 0.7133 – 10 November high – Medium
  • R1 0.7081 – 15 November high – Medium
  • S1 0.6896 – 24 November low – Medium
  • S2 0.6859 – 30 September low – Strong

NZDUSD – fundamental overview

The New Zealand Dollar is underperforming into Wednesday on the back of a very discouraging retail sales print that has the market reconsidering hawkish RBNZ bets. Key standouts on today’s calendar come in the form of German Ifo reads, UK industrial trends, and a batch of US releases featuring durable goods, GDP, initial jobless claims, core PCE, personal spending, new home sales, and Michigan sentiment.

US SPX 500 – technical overview

Longer-term technical studies are looking quite exhausted and the market is showing signs of wanting to roll over after racing to another record high. At the same time, the latest breakout above 4600 introduces the possibility for the next major upside extension through 4800. At this stage, it will take a break back below 4500 to take the immediate pressure off the topside.

  • R2 4750 – Psychological – Strong
  • R1 4745 – 22 November/Record high – Medium
  • S1 4632 – 10 November low – Medium
  • S2 4500 – Psychological – Strong

US SPX 500 – fundamental overview

We're trading just off fresh record highs, and yet, with so little room for additional central bank accommodation, given an already depressed interest rate environment, the prospect for sustainable runs to the topside on easy money policy incentives and government stimulus, should no longer be as enticing to investors. Meanwhile, ongoing worry associated with coronavirus fallout and risk of rising inflation should weigh more heavily on investor sentiment in Q4 2021.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and an acceleration beyond the next major psychological barrier at 2000. Setbacks should now be well supported above 1600.

  • R2 1917 – 1 June high – Strong
  • R1 1878 – 16 November high – Medium
  • S1 1759 – 3 November low – Medium
  • S2 1722 – 29 September low – Strong

GOLD (SPOT) – fundamental overview

The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about exhausted monetary policy, extended global equities, and coronavirus fallout. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax.

Peformance chart: 30 Day Performance vs. US dollar (%)

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