Where things stand into the end of the week

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The November 2022 monthly close back above 1.2000 strengthens this prospect. Any setbacks should now be well supported ahead of 1.2000. Next key resistance comes in at 1.2681.

• R2 1.2591 – 29 June low – Strong
• R1 1.2570 – 23 November high – Medium
• S1 1.2446 – 20 November low – Medium
• S2 1.2374 – 17 November low – Medium

GBPUSD – fundamental overview

BOE Chief Economist Huw Pill’s comments with the Financial Times crossed the wires, cautioning inflation may remain “stubbornly high," while calling for the BOE to remain resolute in its fight against inflation. Key standouts on Friday’s calendar come from German GDP, German Ifo reads, and ECB Lagarde speech, and Canada retail sales.

USDJPY – technical overview

The market remains confined to a strong uptrend, with sights set on a retest and break of the multi-year high from 2022 at 151.95. A push through this level will open the next major upside extension towards 155.00. Key support comes in at 147.00, with only a daily close below to delay the constructive outlook.

• R2 149.99 – 2o November high – Medium
• R1 149.75 – 22 November high – Medium
• S1 147.55 – 21 November low – Medium
• S2 147.00 – Figure – Strong

USDJPY – fundamental overview

A lot of mixed data out of Japan on Friday. Inflation readings were more or less consistent with October reads, while manufacturing PMIs worsened, weighed by renewed declines in demand conditions, with the headline figure coming in at its lowest level since February 2022 and recording its 6th straight month of contraction. On the other hand, services PMIs saw a sustained rise in activity and a modest acceleration in new businesses. Key standouts on Friday’s calendar come from German GDP, German Ifo reads, and ECB Lagarde speech, and Canada retail sales.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6200 would give reason for rethink. Back above 0.6630 will take the immediate pressure off the downside and strengthen case for a bottom.

• R1 0.6630– 2 August high – Strong
• R2 0.6590 – 21 November high – Medium
• S1 0.6452 – 17 November low – Medium
• S2 0.6338 – 10 November low – Strong

AUDUSD – fundamental overview

The Australian Dollar has mostly benefited this week from hawkish RBA comments, broad US Dollar selling, and a resurgence in demand for stocks. Having said that, there are signs of selling on the back of softening iron ore prices. Key standouts on Friday’s calendar come from German GDP, German Ifo reads, and ECB Lagarde speech, and Canada retail sales.

USDCAD – technical overview

Above 1.3000 signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4000 area. Setbacks should be very well supported down into the 1.3000 area.

• R2 1.3855 – 10 November high – Strong
• R1 1.3786 – 5 October high– Medium
• S1 1.3650 – 23 November low – Medium
• S2 1.3629 – 6 November low – Strong

USDCAD – fundamental overview

The Canadian Dollar hasn't gotten any help from this week's Bank of Canada Macklem comments after the central banker said rates may be restrictive enough and that he expected a weak economy to bring downward pressure on inflation. Key standouts on Friday’s calendar come from German GDP, German Ifo reads, and ECB Lagarde speech, and Canada retail sales.

NZDUSD – technical overview

Overall pressure remains on the downside with the market once again stalling out on a run up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6133 would be required to take the immediate pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action.

• R2 0.6133 – 4 August high– Strong
• R1 0.6087 – 21 November high – Medium
• S1 0.5940 – 17 November low – Medium
• S2 0.5863 – 14 November low – Medium

NZDUSD – fundamental overview

The New Zealand Dollar is enjoying a steady run of demand on Friday, getting additional help from a better than expected New Zealand retail sales print. The currency had already been propped up on broad based US Dollar selling and renewed risk appetite. Key standouts on Friday’s calendar come from German GDP, German Ifo reads, and ECB Lagarde speech, and Canada retail sales.

US SPX 500 – technical overview

Longer-term technical studies are in the process of unwinding from extended readings off record highs. Look for rallies to be well capped in favor of lower tops and lower lows. A monthly close back above 4600 will be required to take the immediate pressure off the downside. Next key support comes in at 4308.

• R2 4608 – 27 July/2023 high – Strong
• R1 4568 – 22 November high – Medium
• S1 4487– 16 November low – Medium
• S2 4408 – 14 November low – Strong

US SPX 500 – fundamental overview

Investors continue to struggle with the reality of a higher for longer Fed policy track in the face of ongoing worry around inflation, while also contending with geopolitical risk in 2023. Overall, we expect inflation to continue to be a problem in 2023 that results in downside pressure into rallies despite recent data and market expectations that would argue otherwise.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs. Setbacks should now be well supported above 1600 on a monthly close basis ahead of the next major upside extension. Next major resistance comes in at 2100, above which opens the next extension towards 2500.

• R2 2071 – 8 March 2022/Record high– Strong
• R1 2010 – 27 October high – Medium
• S1 1920 – 13 November low – Medium
• S2 1908 – 16 October low – Medium

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 inflation risk and a less stable and upbeat global growth outlook. 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.