Global Market Wrap and Lookahead.
- The US dollar resumed its move lower post-FOMC.
- US indices continue to grind higher.
- A constant flow of high-importance economic data and events coming up.
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This week’s economic calendar is packed full of a wide range of market-moving economic releases that will help position the market ahead of the mid-December slew of global monetary policy decisions. Coming up, amongst others, we have German inflation and jobs, Canadian and Swiss Q3 GDP numbers, Euro Area inflation, speeches by Fed chair Jerome Powell and the Bank of Japan’s Kuroda, Canadian employment, and the closely watched US core PCE and the Non-Farm Payroll release.
For all market-moving data releases and economic events see the DailyFX Calendar.
Last week’s holiday-shortened market was dominated by further US dollar weakness after the FOMC minutes revealed that a majority of members thought that a slowing in the pace of rate increases may be appropriate. Just a nod by the Fed that it may be taking its foot off the accelerator sent the US dollar lower and gave a range of risk markets a push higher. The market is now expecting a 50 basis point rate hike at the mid-December FOMC meeting.
Fundamental Forecasts for w/c November 28, 2022
Liquidity will return next week to a market that has seen both a seasonal and structural suppression of volatility. While we are heading into the year-end holiday-strewn period which typically amplifies expectations for a tapering off of activity and participation, there is no guarantee that quiet will prevail.
UK retailers are hoping that Black Friday shopping will boost spending ahead of the festive season during one of the worst cost of living crises the UK has seen in years.
The Australian Dollar surged toward a 2-month high at the end of last week as the US Dollar collapsed on the market perception of a change in Federal Reserve policy.
The US dollar is continuing to fade lower in anticipation of a slightly less hawkish Fed outlook. The US dollar had been a one-way trade for most of 2022, before the recent turnaround. The DXY has fallen 8% from late September.
The Euro is likely heading for its best month since September 2010 as the markets focus on relativity between the Fed and ECB. EUR/USD is eyeing Eurozone CPI and non-farm payrolls data next.
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Technical Forecasts for w/c November 28, 2022
Gold prices have returned to a zone of technical support and resistance around the key psychological handle of $1,750. Can bulls drive XAU higher or will bears step in?
The US Dollar’s bullish trend remains on hold after setting a fresh twenty-year high in September. October price action brought indecision into the mix but so far, November has been a fast reversion as prices have pulled back.
After a holiday-shortened week, the S&P 500 is at a crucial crossroads, a break above which could increase the chances that the medium-term weakness in US equities is beginning to reverse.
Technical analysis holds the 140.00 inflection point important for short-term directional bias for USD/JPY.
What is your view on market sentiment – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.