Key Economic Data - Coming Up Today(All Times GMT+3)
The EURUSD fell sharply from the post-FOMC Minutes high of 1.2600 down to 1.2359. The latest decline brought the pair back to the Nov 7 low from earlier this month and any breach below this level will push the EURUSD to a new two-year low. A break below 1.2358 will extend this year's downtrend and likely see margin calls and euro selling that will force the pair within reach of the 1.2000 level. The EURUSD was as high as 1.2560 on Friday until ECB President Mario Draghi gave a speech and painted a negative picture of the situation in the Euro Area. The main headlines were his comments on the need to re-ignite inflation and end the spiral of below target inflation currently being experienced in the Eurozone. This sent the EURUSD tumbling by 100 pips in an hour and then the pair fell another 100 pips during the rest of the day. After closing at 1.2373 the pair re-opened this week with a gap lower and touched the 1.2358 level before bouncing as high as 1.2405. The weekly close below 1.2500 after holding above this level for most of the week sent a bearish signal to investors. To change the trend the EURUSD must consolidate above 1.2500 and rise above 1.2883 raising the prospects of a near term upside correction in the pair following months of declines. The pair has a two-year low level at 1.2358 and we are just under 1% above the lows, while the October high is at 1.2883 just below 1.30. WTI Crude Oil has held above $75 a barrel since Nov20 and is currently trading $76.48 a barrel. The US DJIA reached a new all-time high at 17,810 and the USDJPY is at 118.29 just off the highs at 119.
The RSI on the EURUSD Weekly Chart has crossed back below 30 and appear to have failed in its latest attempt to push above 30. Readings of 30 and below on the RSI are considered oversold and this could raise the possibility of a near term recovery in the pair. The next move will be to see if the RSI stabilizes and moves higher or if it will fall back towards the reading of 15 made in September this year. The EURUSD has declined for each of the last 4 months and at 1.2384 is down for a fifith month in Novemeber also.
At present the Euro is under pressure with the pair below 1.30 and still trading below the downtrend channel as seen in the H4. As long as the pair remains below 1.30 and below the downtrend channel, the bias remains bearish. - This has been our consistent outlook for three months. The pair has been below the key 1.30 level for eight consecutive weeks.
EURUSD Support areas include 1.2358, 1.2335, 1.2300, 1.2200, 1.2150. Resistance levels above are at 1.2600, 1.2700, 1.2845, 1.2800, 1.2900 & 1.30.
EURUSD 5 Minute Chart
EURUSD 4 Hour Chart
EURUSD Pivot Point Table
Gold made a new three week high at $1208 an ounce on Friday. Significantly the pair closed above the key $1200 level at $1201.50. Since this week's open the price has slipped below $1200 reaching $1194. The price has since climbed to $1197.50 and looks set to move back above $1200. The main key levels at present are the new high at $1207, the next target higher is $1232 which will be 4 week high and on the downside $1180 is an important support followed by $1174, $1145 and $1130. Gold has benefited from a proposed vote in Switzerland that will impose upon the SNB (Swiss National Bank) to hold a fixed portion of its assets in Gold. If all Central Banks did this then there would be more demand for Gold stoking upward pressure on prices. The Central Bank Easing from China, to Japan to Europe have all helped strengthened Gold against currencies. At the same time the recovery in the US, the recovery in the USD and the expected normalization in US interest rates form the crux of the case against the long gold trade.
The next month and a half will be key to determining if Gold can recover up above $1200 and continue to erase some of this years losses. Gold opened the year at $1205 an ounce and therefore is only 2% down for the year. In the early months of this year Gold had advanced as high as $1388 an ounce and as such is $200 off the yearly highs for 2014. With a just over a month until the end of this year it is integral to see if Gold closes higher or lower than the Jan 1st 2014 level. Between 1999 and 2013 for 14 consecutive years the price rose year to year. In 2013 the price opened the year at $1674 and closed at $1205 posting a first yearly loss in 15 years. Therefore it is key to see if the year to year loss extends into a second year of if Gold can shrug of 2013 as a bad year and recover back up towards the 2011 all-time high of $1921.
Gold prices have fallen from $1345 an ounce in August to as low as $1130 in November, erasing $215 from the value of Gold. The $1180 area remains the key to a recovery in Gold which is down from above $1900 in 2011. Gold had advanced from $245 an ounce in 1999 to $1921 in 2011 posting 12 years of straight gains. Now the market has leveled off. Now the price is above $1180 the odds of a recovery are improved, if the price slips below $1180 the outlook turns bearish.
Support levels for Gold can be seen at $1180, $1160 $1140, $1130, $1125, $1115, $1100. Resistance to the upside materializes at $1195, $1205, $1215, $1225, $1235, $1240.
Gold 5 Minute Chart
Gold 4 Hour Chart
Gold Pivot Point Table