Asian stocks are looking positive with China’s easing of covid policies in light of a recent wave of protests

What You Need To Know

Asian Equities markets gained as China eases some of the Covid restrictions in major cities including Beijing and Shanghai. China loosening Covid restrictions also boosted oil prices with a better oil demand outlook. On the other hand, a higher-than-expected U.S. job report worried investors that the chance of the Fed delivering a higher targeted interest rate is high. In other news, Australia and New Zealand are set to raise the interest rate to cool inflation, with both countries willing to risk recession. 

Look Out For

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

75 bps (21.8%) VS 50 bps (78.2%)

Market Overview

Economic Calendar

Market Movements

DXY

Last Friday, the US Dollar initially surged significantly on the backdrop of a string of upbeat jobs data from the United States. According to the Bureau of Labor Statistics, US Nonfarm Payrolls came in at 263K, exceeding the market forecast at 200K. Meanwhile, the unemployment rate remained unchanged at 3.70%. The data indicated that the US employers hired more workers than expected in November, shrugging off mounting worries of a recession. However, the US Dollar retreated thereafter as the easing sign of inflation data recently had muddied the outlook for how hawkish the Federal Reserve should be. 

The Dollar Index is trading lower following the prior breakout below the previous support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 32, indicating the index is currently entering oversold territory.     

Resistance level: 104.95, 107.95

Support level: 101.50, 99.15

XAU/USD

Gold prices hovered near the three-month high despite the release of upbeat US jobs data, as market participants continue to bet on smaller rate hikes from the Federal Reserve over the next two weeks. Earlier, Fed Chairman Jerome Powell claimed that the Federal Reserve could start slowing down the pace of US rate hikes as early as December meeting. 

The gold market is trading higher while currently near the resistance level. However, MACD has diminishing bullish momentum, while RSI is at 69, suggesting the commodity is going into overbought territory.      

Resistance level: 1810.00, 1875.00

Support level: 1730.00, 1680.00

EUR/USD

With the Fed promising a soft landing for its tightening monetary policy in which 50 bps will be increased for the next rate hike rather than 75 bps, the strength of the dollar has weakened, and the euro is able to enjoy the advantage. The stronger-than-expected U.S. jobs report has increased the investor’s risk appetite for more risky asset classes, putting the dollar under pressure. 

The pair has been trading on a bullish trend after breaking its then-resistance level at 1.0133. A weaker dollar has pushed the pair to touch its near resistance at 1.0581; it would be a strong bullish signal if the pair is able to break through the resistance. The MACD shows that the pair is trading on strong bullish momentum as it rebounds from the zero line and is gaining. The RSI has also depicted a strong buying power where it rebounded from the 52-level to the 66-level as of writing. 

Resistance level: 1.0581, 1.0759

Support level: 1.0315, 1.0132

BTC/USD

The DXY index has dropped to its lowest since Jun this year trading at below 105 and this allows BTC to take this advantage to edge higher. The stronger-than-expected jobs report released last Friday has encouraged the investor to go for a riskier asset class including cryptocurrencies. 

BTC is trading on a bullish uptrend and has successfully broken through its resistance and consolidation price range at 17040. The RSI shows that the buying power for the crypto has picked up and is touching the overbought zone. However, the MACD remained near the zero line and is yet to show any promising bullish momentum for BTC. 

Resistance level: 17859, 18690

Support level: 17040, 15663

DJ30

The Dow edged higher as the recent easing of Covid-19 restrictions on the world’s second-largest economy; China had sparked risk-on sentiment in the global financial market, which prompted investors to shift their portfolio to other riskier assets such as the equity market. However, the gains experienced by Dow Jones are still capped by higher US Treasury yields. Stronger-than-expected Nonfarm Payrolls figures had prompted investors to increase the speculation over the aggressive rate hike decisions.

The Dow is trading higher while currently testing the resistance level. MACD has illustrated diminishing bearish momentum; RSI has illustrated 62, suggesting the upside is more favoured as the RSI stays above the midline. 

Resistance level: 34390, 36810

Support level:  31370, 28760

GBP/USD

The pound rose to a 21-week high as the dollar softened on Friday. The pound was last up 1.5% against the dollar at $1.2326 as of writing, its highest level since 27 June. Suggest a modestly bullish perspective on the pound as the weakened dollar extended its losses over the weekend. However, the uncertainties of the ‘’mini budget’’ has seemed to be completely priced out. It has been fully reversed from late September and early.

The pound successfully broke its previous resistance level, $1.2153 and is now trading at $1.2326, the highest since 27 June. The MACD line continues moving upward, showing a bullish momentum that has remained in the short term. RSI is trading at 69, near the overbought territory, indicating the buyer is more than the seller. However, RSI has already touched its overbought zone, suggesting that it might have a slight retracement in the near term for the pair to continue its upward trends. 

Resistance level：1.2654， 1.3057

Support level： 1.1950，1.1627

NAS100

The Nasdaq notched back-to-back weekly gains as the overwhelming Nonfarm Payroll data had insinuated bullish momentum on US Treasury yields. The data had indicated that the payrolls rose by 263,000 in November, which fared better than market expectation of 200,000 increase. Average hourly earnings also indicated the reading above the market expectations, jumping 0.60% compared with the previous month. 

Nasdaq is trading higher while currently testing the resistance level. However, MACD has illustrated increasing bearish momentum, while RSI is at 57, suggesting the index might trade lower in short-term as technical correction since the RSI retreated sharply from the overbought territory. 

Resistance level: 12020, 12595

Support level: 11495，10920

CL OIL

Oil prices rose after OPEC+ reaffirmed their oil output targets. At the same time, sanctions on Russian crude kicked in on Sunday. OPEC+ agreed to execute their October plan to cut output by 2 million barrels per day from November through 2023. To further punish Moscow for the invasion of Ukraine, the EU agreed to impose a cap at $60 per barrel on Russian crude while banning most seaborne imports from Monday. Besides, most cities in China including Shanghai, Shenzhen and Guangzhou have eased COVID-19 curbs over the weekend, leading to a gain in oil prices. Easing Covid-19 restrictions from China has enhanced the outlook for energy demand and other commodities.

Crude oil prices are trading higher while currently testing the resistance level, which is $83. However, MACD has illustrated diminishing bullish momentum, while RSI is at 60, indicating a neutral-bullish momentum ahead. 

Resistance level: 83.10, 91.90

Support level: 76.00, 69.90