Hawkish Signal From Fed Officials Spurred the Market

29 November 2022, 06:06

What You Need To Know

The market was shocked by the hawkish statement from the Fed’s officer, who said that the market may have underestimated the chance of higher rates. U.S equities market has reacted pessimistically to the statement and the uncertainties from the China pandemic crisis worsen the situation. Oil prices edged slightly higher as OPEC+ might be considering cutting its oil production further; this agenda will be discussed in the next meeting this week. Another crypto trading platform went bankrupt in the aftermath of the FTX collapse. BlockFi Inc, the latest digital-asset firm has filed bankruptcy and is now focusing on working out a plan to repay creditors.

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
market movements price chart 29 november 2022
Economic Calendar
economic calendar 29 november 2022

Market Movements

dxy price chart 29 november 2022


The safe-haven US Dollar surged as a protest of Covid-19 restrictions in China had stoked a shift in sentiment toward the safe-haven asset. According to CNN news, residents from the country’s biggest cities, from the financial hub of Shanghai to the capital of Beijing, gathered over the weekend to mourn the dead from a fire in Xinjiang and call for freedom and democracy. The protests in major Chinese cities could exacerbate concerns about the economic progression while prompting supply disruption in the world.

The Dollar Index is trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 56, 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 price chart 29 november 2022


With investors bracing for a hawkish tone from the Federal Reserve, the strong US Dollar continues to weigh on the dollar-denominated gold. As a steep increase in interest rates adds to the headwinds, the gold market outlook could remain extraordinarily uncertain. Nonetheless, movements in gold will be volatile in the coming days ahead of several crucial economic data. Investors are advised to keep an eye on the results of the macro data for further trading signals.

The gold market is trading lower while currently testing the support level. MACD has illustrated diminishing bullish momentum, while RSI is at 43, 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 price chart 29 november 2022


A relatively Hawkish statement from James Bullard, St. Louis Fed President warns that the market might underestimate the chance for higher rate hikes as the inflation risk is still high. If the Fed holds on with its tightening monetary policy, the dollar will gain more strength and the Euro will be under pressure. However, the ECB president has also said that the Eurozone inflation is still not peaked and will be getting higher. As such, the Euro will be strengthened if the ECB has a more aggressive approach to rate hikes. 

On the technical side, the pair has been easing on its bullish momentum and started consolidating in the past 2 trading weeks. The buy-sell power is neutral as the RSI hovers near the 50-level and the MACD has suggested that the bullish momentum has eased. 

Resistance level: 1.0467, 1.0572

Support level: 1.0313, 1.0229

btc/usd price chart 29 november 2022


Another chaotic event occurred after the collapse of FTX; BlockFi Inc filed bankruptcy due to high exposure to FTX. Liquidity crisis incurred by BlcokFi Inc while its second-largest creditor, FTX, filed for bankruptcy. Hawkish statements from Fed officials will also pressure BTC with a stronger dollar. 

On the technical side, the crypto market has been quiet with low trading in the past trading days. BTC has constantly consolidating in a price range between 17040 to 16040. The MACD and RSI have also depicted that the movement for the coin is minimal with both having a neutral signal for BTC.

Resistance level: 17040, 17982

Support level: 15690, 14805

DJ30 price chart 29 november 2022


The Dow retreated, and US Treasury yields rose following the Federal Reserve Bank of St. Louis President James Bullard claiming that market participants are underestimating the chances of aggressive rate hikes in future. Bullard on Monday argued that the Fed still needs to reach at least the minimum benchmark of the 5% to 7% range of interest rate to meet policymakers’ goal of being restrictive enough to combat the spiking inflation rate. However, policymakers will continue to eye the employment data this Friday, with forecasters looking for job additions of around 200,000 in November and the unemployment rate expected to stay at 3.7%.

On the technical side, the Dow Jones is 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 oversold territory. 

Resistance level: 35000, 35930

Support level:  32993, 31434

gbp/usd price chart 29 november 2022


The pound is trading sideways at yesterday’s range of 1.20 against the dollar. The pair’s direction this week is likely to be driven by its peers, given that the political backdrop is more settled and the economic data is quiet. However, it might be difficult for the pound to continue its upswing as markets fear of a prolonged recession in the U.K. weighed on market sentiment. At the same time, severe China COVID-19 cases increase risk-off sentiment in the global financial market, dragging down its appeal.

The pound still hovers around three months high, around 1.2000 at the time of writing. However, the momentum seems to ease after the resistance is broken. The MACD line shows a diminishing bullish momentum ahead. RSI is dropping to 48, which indicates a diminishing bullish momentum ahead in the short term. 

Resistance:1.2302, 1.2676 

Support: 1.1950,1.1742

nas100 price chart 29 november 2022


The NASDAQ dropped 176.86 points or (-1.58%) on Monday with the pressure from Apple Inc (AAPL.O) as it slid on worries about a hit to iPhone production. Apple fell 1.4% on Monday as growing worker unrest at China’s world’s biggest iPhone factory. At the same time, a reduction of iPhone shipments from a Foxconn plant in China in November due to its production was hit by COVID-19 lockdown restrictions. The China protest news was the source of market sentiment souring this week, and investors could watch China’s newest COVID outbreak and monitor the Federal Reserve’s next steps on its future rate hiking path.

MACD is trading on the sidelines 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 50, indicating a neutral-bearish momentum ahead.

Resistance level: 12094,12476

Support level: 11228,10448

crude oil price chart 29 november 2022


Oil prices rebounded after hitting their 11-month low as market participants speculated that OPEC+ would consider a massive oil cut during its 4th December meeting. According to Reuters, Saudi Energy Minister Abdulaziz bin Salman indicated that OPEC+ will have a higher probability of reducing further oil production as the global recession risk continues to weigh on this black commodity’s demand. Nonetheless, the overall long-term trend for oil prices remained bearish amid spiking Covid-19 cases in top oil importer China had spurred further selloffs for crude oil.

Crude oil prices are trading lower while currently testing the support level. However, MACD has illustrated increasing bullish momentum, while RSI is at 44, suggesting the commodity will likely trade higher in short-term as technical correction since the RSI rebounded sharply from oversold territory.  

Resistance level: 83.10, 91.90

Support level: 76.00, 69.90