Key Economic Data - Coming Up Today (All Times GMT+3)
The decision of the FOMC to end QE, or rather QE4, clearly caught markets by surprise. This is evident by looking at the reaction in the market to FOMC Statement. The EURUSD as seen on H1 tumbled by 220 pips, (2.2 cents) from 1.2770 to 1.2550. This is a move of 1.8%, an adjustment based exclusively on the language and impact of the US Central Bank's policy announcement to end the Bond Buying Program. The GBPUSD also fell sharply from 1.6160 to 1.5970 which is 1.2% versus the 1.8% decline in the EURUSD. The USDJPY also appreciated from 108 pre-announcement to a high of 109.20, a 1.1% move. As seen on the H1, the blue rising trendline for the pair has been broken in devastating fashion. This ends the hopes for the EURUSD targeting a move beyond 1.2890 and within range of the key 1.30 level.
Today the big news will be US Advance GDP, with expectations of a 3.1% annualized rate of growth for the quarter. So far this morning Spanish Flash CPI contracted by 0.1% and was lower than forecast while the nation's GDP grew by 0.5% in line with estimates. German Unemployment Change exceeded expectations with 22,000 jobs added to the economy.
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 two month now, although the picture had become more mixed as the pair had re-entered the lower end of the downtrend channel as seen in the H4 Chart. Overall the bias is sill negative for the EURUSD although there is slightly more hope for the bulls now due to the price action of the last three weeks. The pair had recently begun to re-enter into the lower end of the downtrend channel. The price has now collapsed and signaled this latest attempt to rebound in the EURUSD as a failure.
EURUSD Support areas include 1.2500, 1.2475, 1.2425, 1.2300. Resistance levels above are at 1.2600, 1.2700, 1.2845, 1.2800, 1.2900,1.30 figure level, followed by 1.3165.
EURUSD 5 Min Chart
EURUSD 1 Hour Chart
EURUSD 4 Hour Chart
Pivot Point Table
Gold collapsed below the well defined range at $1223 on the lower boundary and $1234.25 on the upper boundary, a range held since the 23rd of October. Gold fell from $1225 an ounce before the FOMC to $1201.50 in the aftermath. The price had risen $75 and 6.5% from the key $1180 support line to a high of $1255. We are still holding above the $1180 area as well as $1200, atleast for the time being. If these levels stay intact calls above $1200 and above $1180 could pay off. A breach below $1180 in particular changes the technical tone to a very negative bearish outlook. Holding above $1180 will signal a very powerful triple bottom chart pattern. Gold had declined by 6% in September and this was corrected in October until this recent setback. We await further price action to gauge how markets will react to the US monetary policy directions. Key policy moves in the US are one of the most powerful factors that affect markets. This is owing to the fact that the US is the world's largest and most influential economy and the USD is the reserve currency and therefore also affects even the entire global banking system and the global economy. Low global inflation and the end of stimulus in the US are two negative elements for rising Gold prices and the potential increase in interest rates in the US could push Gold even lower. At the same time the stress in the European economy and a global slowdown could push investors to use Gold as a hedge and a safe haven. Additionally the low inflation rate can be seen as a positive in terms of the fact that inflation is expected to rise, which typically boosts the value of Gold.
Above $1200 the bias is bullish
Above $1180 the bias is still bullish but
Below $1180 is a strong sell signal
(These are outlooks, based mainly on chart analysis and technicals. The outlooks do not constitute recommendations or investment advice)
Support levels for Gold can be seen at $1200, $1190 and $1180, $1170. Resistance to the upside materializes at$1215, $1225, $1235, $1240, $1250, $1260, $1275
Gold 5 Min Chart
Gold Hourly Chart
Gold 4 Hour Chart
Gold Pivot Table