The mood in markets

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 1.3000 area ahead of the next major upside extension towards a retest and break of critical resistance in the form of the 2018 high.

• R2 1.3371 – 30 November high – Strong
• R1 1.3290 – 7 December high – Medium
• S1 1.3160 – 8 December/2021 low – Medium
• S2 1.3100 – Figure – Strong

GBPUSD – fundamental overview

The UK governments is threatening greater virus restrictions and the market is seriously repricing expectations for BOE rate hikes. All of this has resulted in the Pound's underperformance and drop to fresh yearly lows against the Buck. Key standouts on today’s calendar come in the form of German trade, and US initial jobless claims.

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 116.00 – Figure – Strong
• R1 115.53 – 24 November/2021 high – Medium
• S1 113.00 – 29 November low – Medium
• S2 112.53 – 30 November low – Strong

USDJPY – fundamental overview

The Yen has come back under pressure this week as risk on themes work back into the market. We've also seen softer GDP data out of Japan. Key standouts on today’s calendar come in the form of German trade, and US initial jobless claims.

AUDUSD – technical overview

The Australian Dollar has been in the process of a healthy correction following the impressive run towards a retest of the 2018 high earlier this year. At this stage, the correction is starting to look stretched and setbacks should be well supported above 0.7000 on a weekly close basis. A weekly close below 0.7000 will force a bearish shift.

• R2 0.7237 – 23 November high – Medium
• R1 0.7200 – 8 December high – Medium
• S1 0.0.6993 – 3 December/2021 low – Strong
• S2 0.6950 – Mid-Figure – Medium

AUDUSD – fundamental overview

Actions from China to stimulate markets and downgraded concerns around the omicron variant have been responsible for a lot of this latest recovery we're seeing in the Australian Dollar. Key standouts on today’s calendar come in the form of German trade, and US initial jobless claims.

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 1.2949 – 20 August/2021 high – Strong
• R1 1.2896 – 20 September high – Medium
• S1 1.2667 – 8 December low – Medium
• S2 1.2585 – 19 November low – Strong

USDCAD – fundamental overview

Though the Bank of Canada dropped the transitory inflation language and warned of broadening price pressures, overall, the central bank was less hawkish than the market expected. Rates remained on hold and the central bank talked of an economy that still required considerable support. This resulted in some Canadian Dollar underperformance despite gains against the Buck. Key standouts on today’s calendar come in the form of German trade, and US initial jobless claims.

NZDUSD – technical overview

The market has entered a period of intense correction after running up to a yearly and multi-month high. Back below 0.6700 would suggest a more significant bearish structural shift.

• R2 0.6894 – 25 November high – Strong
• R1 0.6868 – 1 December high – Medium
• S1 0.6736 – 7 December/2021 low – Medium
• S2 0.6700 – Figure – Medium

NZDUSD – fundamental overview

The New Zealand Dollar is finding some bids after putting in a fresh multi-month low, with the demand coming from the recovery in risk sentiment. At the same time, Kiwi has been a laggard as the market prices a less hawkish RBNZ trajectory. Key standouts on today’s calendar come in the form of German trade, and US initial jobless claims.

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 4745 – 22 November/Record high – Strong
• R1 4722 – 25 November high – Medium
• S1 4496 – 3 December low – Medium
• S2 4432 – 7 October high – 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.