Markets are wary ahead of Jerome Powell’s upcoming speech, which will be giving an indication for future rate hikes

What You Need To Know

All eyes will be on Fed chair Jerome Powell’s speech on the economy and inflation later today, which will give investors a gauge on the coming rate hikes. Oil prices rose for the 3rd day in a row with the U.S. oil stockpiles being lower than expected. In addition, OPEC+ nations will meet on 4th December, when they are likely to agree on the decision to reduce oil supplies further to counter market weakness, possibly boosting oil prices. Finally, the New Zealand Reserve Bank has reiterated that it will maintain its inflation goal at 2%, but did not state a specific time frame to achieve the goal. 

Look Out For

Current rate hike bets on 14th December Fed interest rate decision: 

75 bps (32.5%) VS 50 bps (67.5%)

Market Overview

Economic Calendar

Market Movements

DXY

The Dollar Index edged higher ahead of the public appearance by Fed Chair Jerome Powell and a string of crucial economic data due later in the week. Meanwhile, US Treasury yield rose after St. Louis Fed President James Bullard revealed that the official cash rate still needed to increase further and hold for an extended period throughout 2024. After the hawkish messages from other Fed officials, investors are warily waiting for Jerome Powell’s comments at a Brookings Institution’s events about the US economy and labour market outlook

The Dollar Index is trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 58, suggesting the index will extend its gains as the RSI stays above the midline.  

Resistance level: 107.95, 109.60

Support level: 105.75, 104.75

XAU/USD

The gold market is still trading in a sideways auction ahead of several important events this week. Investors are waiting for the speech from Federal Reserve (fed) chair Jerome Powell and the outcome of several economic data such as US ADP Employment, Gross Domestic Product (GDP), core Personal Consumption Expenditure (PCE) as well as Nonfarm Payroll, which are due to release in comings days for further trading signals.

The gold market is trading lower while currently near the support level. MACD has illustrated diminishing bullish momentum, while RSI is at 48, indicating a neutral-to-bearish stance as the RSI stood below the midline.    

Resistance level: 1785.00, 1815.00

Support level: 1730.00, 1680.00

EUR/USD

The pair has been consolidating with strong resistance at 1.0444. The market is awaiting the speech from Jerome Powell, the Fed chair, to gauge the next move for the U.S. Fed in rate hikes. Besides, several key economic data from the EU will be disclosed this week including Germany’s flash CPI data and Germany’s Unemployment rate; these will allow the investor to speculate on the ECB following monetary policy approach on tapping the inflation. 

The pair has been hovering in the price range between  1.02564 to 1.0444 with a strong resistance waiting to be tested. The MACD shows that the momentum for the pair is halted as both the MACD line and Signal line have crossed below the zero line. The RSI has also suggested that the buying power has vanished and flown below the 50-level. 

Resistance level: 1.0440, 1.0570

Support level : 1.0272, 1.0142

BTC/USD

The aftermath of the collapse of FTX, including the fall of Genesis and BlockFi, has lost some of the investor’s confidence in the crypto market. The BTC’s prices have been sideways ever since, but the price slightly edged higher with strong resistance at 17040 is waiting to be tested. The Fed’s Chair speech later today will be the gauge for the dollar and BTC future movement. 

BTC prices have been sideways after it plunged from above $20000 due to the event of the FTX bankruptcy. However, there are some positive signals from the indicator with the RSI has climbed up and is approaching the overbought zone. The MACD on the other hand, has been neutral as it keeps hovering near the zero line with no momentum indicated. 

Resistance level: 17000, 17812

Support level: 15667, 14800

DJ30

The Dow edged lower yesterday ahead of a speech from Federal Reserve Chairman Jerome Powell. Meanwhile, US Treasury yield rose following St. Louis Fed President James Bullard’s hawkish tone toward the economic progression. As for now, investors are waiting for Jerome Powell’s comments at a Brookings Institution event to gauge the likelihood of interest rate expectations from the Federal Reserve.

On the technical side, the Dow Jones is trading lower following the retracement from the resistance level. MACD has illustrated increasing bearish momentum, while RSI is at 57, indicating the index to extend its losses as RSI retreated sharply from overbought territory. 

Resistance level: 34115, 36810

Support level:  31370, 28760

GBP/USD

The pound gained a little against the weakened dollar as market sentiment improved on hopes that China would ease its strict COVID-19 curbs. The pair is trading at $1.19 at the time of writing, hovering near last week’s three-month high of $1.21. The pair’s direction this week is likely to be traded sideways as investors are waiting for a chance of any shift in rhetoric ahead of the Bank of England meeting in two weeks.

The pound is still hovering near the three-month high, around 1.20 at the time of writing. However, the momentum seems to ease after the resistance is broken. The MACD line drops to zero and shows a diminishing bullish momentum ahead. RSI is dropping to 45, which also indicates a diminishing bullish momentum ahead in the short term. 

Resistance：1.2302， 1.2676 

Support： 1.1950，1.1627

NAS100

The NASDAQ dropped 65.72 points or (-0.59%) on Tuesday with the pressure from Apple Inc (AAPL.O) and Amazon (AMZN). Apple fell 2.1% for the fourth straight session, and Amazon fell more than 1% on Tuesday. At the same time, markets awaited an upcoming speech by the Federal Reserve Chair Jeremy Powell that could give clues about future interest rate hikes. Investors could keep an eye on recent protests in China, including the world’s largest iPhone factory. 

The MACD line is still trading above the zero line, which suggests the index remains in a neutral-bearish movement in the short term. At the same time, RSI is trading around 46, indicating a neutral-bearish momentum ahead.

Resistance level: 12094，12476

Support level: 11228，10448

CL OIL

Oil prices rose over the expectations for a widening of China’s strict Zero-Covid restrictions. According to Reuters, the Chinese authorities claimed they would ramp up Covid-19 vaccinations for elderly people, aiming to overcome a key stumbling block in efforts to ease unpopular “zero-Covid restrictions”. Meanwhile, European Union governments are still unable to reach any consensus on a price cap on Russian seaborne crude oil, with Poland insisting that the cap had to be set lower than early proposals (price cap $65 – 70 per barrel) by the G7 group to penalise Russia. Investors are advised to keep an eye out for the outcome of the ongoing OPEC+ meeting, which will hint at the future direction of the supply outlook for this black commodity.

Crude oil prices are trading higher following prior rebounded from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 54, suggesting the commodity will extend its gains as the RSI stays above the midline.  

Resistance level: 83.10, 91.90

Support level: 76.00, 69.90