When market expectations are fully priced in

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 door is now open for the next major upside extension towards the 2018 high at 1.4377. Setbacks should be well supported above 1.2500 on a monthly close basis.

• R2 1.2834 – 6 November low – Strong
• R1 1.2812 – 6 December high –Medium
• S1 1.2608 – 13 December low – Medium
• S2 1.2566 – 27 November low – Medium

GBPUSD – fundamental overview

UK GDP came in below forecast and continues to show signs of contraction. This has weighed on the Pound in recent sessions with the market positioning to price a more dovish leaning BOE decision later this week. Key standouts on Monday’s calendar come from an ECB Lagarde speech, German, Eurozone, and UK manufacturing PMIs, Eurozone wage growth, Canada housing starts, NY empire manufacturing, and US PMI reads.

USDJPY – technical overview

The market is looking to resume the longer-term uptrend after an intense correction in 2024. A higher low is ideally sought out above 140.00 in favor of a bullish continuation. The recent weekly close back above 150.00 strengthens the case for longer-term uptrend resumption.

• R2 155.89 – 20 November high – Strong
• R1 153.98 – 16 December high – Medium
• S1 152.45 – 13 December low – Medium
• S2 150.90 – 10 December low – Medium

USDJPY – fundamental overview

The Yen has been feeling less confident in the prospect for a December BOJ rate hike. Interestingly enough, this comes at a time when economic data has been stronger out of Japan, as reflected through last week's Tankan and today's machine orders and manufacturing data. It seems the bigger driver right now is the repricing of Fed bets towards less rate cuts than more in 2025. Key standouts on Monday’s calendar come from an ECB Lagarde speech, German, Eurozone, and UK manufacturing PMIs, Eurozone wage growth, Canada housing starts, NY empire manufacturing, and US PMI reads.

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. A monthly close back above 0.7000 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.6688 – 7 November high – Strong
• R2 0.6550 – 25 November high – Medium
• S1 0.6337 – 11 December 2024 low – Strong
• S2 0.6300 – Figure – Medium

AUDUSD – fundamental overview

A struggling Australian Dollar has been facing more challenges on Monday after China economic data came in softer on the whole as reflected through retail sales and the house price index. Key standouts on Monday’s calendar come from an ECB Lagarde speech, German, Eurozone, and UK manufacturing PMIs, Eurozone wage growth, Canada housing starts, NY empire manufacturing, and US PMI reads.

USDCAD – technical overview

A sustained hold above 1.3000 over the past several months 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 1.4500-1.5000 area, exposing a retest of the 2020 high just ahead of 1.4700. Setbacks should be very well supported ahead of 1.3500.

• R2 1.4300 – Figure – Medium
• R1 1.4246 – 13 December/2024 high – Medium
• S1 1.4200 – Figure – Medium
• S2 1.4120 – 11 December low – Strong

USDCAD – fundamental overview

The Canadian Dollar is back to trading to fresh multi-month lows as the market continues to price a clear divergence between policy outlooks at the Fed and Bank of Canada. The outlook for the BOC continues to favor more cuts relative to the Fed given a more distressing Canada economic outlook and heightened fears around trade. Even Friday's impressive rebound in energy prices has done little to help the Loonie. Key standouts on Monday’s calendar come from an ECB Lagarde speech, German, Eurozone, and UK manufacturing PMIs, Eurozone wage growth, Canada housing starts, NY empire manufacturing, and US PMI reads.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs 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 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action.

• R2 0.5890 – 6 December high – Medium
• R1 0.5818 – 12 December high – Medium
• S1 0.5754 – 13 December/2024 low – Strong
• S2 0.5700 – Figure – Medium

NZDUSD – fundamental overview

The New Zealand Dollar didn't get any help from a soft round of China data earlier today, though the currency was able to feel a little better about the fact that New Zealand PSI reads came in a good deal higher than previous. Key standouts on Monday’s calendar come from an ECB Lagarde speech, German, Eurozone, and UK manufacturing PMIs, Eurozone wage growth, Canada housing starts, NY empire manufacturing, and US PMI reads.

US SPX 500 – technical overview

The longer term uptrend remains intact and dips continue to be exceptionally well supported. Critical support comes in at 5679, with only a break back below this level to compromise the structure and open the door for a more significant corrective decline. Until then, the focus remains on a continued push to fresh record highs.

• R2 6200 – Round Number – Strong
• R1 6104 – 6 December/Record high – Medium
• S1 5838 – 19 November low – Medium
• S2 5697 – 4 November low – Strong

US SPX 500 – fundamental overview

The US equities market remains exceptionally well supported in 2024 on the back of an ongoing expectation for more rate cuts than less going forward. Investors are feeling better about a soft landing in the US economy and this has also been accompanied by an accommodative adjustment of Fed policy. Moreover, there has been a fresh wave of market optimism in the aftermath of the Trump election victory. It will however be important to keep an eye on inflation, bigger picture economic data, and geopolitical risk in the weeks and months ahead.

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 this next major upside extension into the 3000 area. Setbacks should now be well supported above 2500 on a monthly close basis.

• R2 2791 – 31 October/Record high – Strong
• R1 2727 – 12 December high – Medium
• S1 2537 – 14 November low – Medium
• S2 2500 – Round Number – Strong

GOLD (SPOT) – fundamental overview

The yellow metal has pushed record highs in 2024 with solid demand from medium and longer-term accounts. These players are more concerned about inflation, geopolitical risk and a less upbeat global growth outlook. All of this should keep the commodity well supported over the coming months.