FUNDAMENTAL OUTLOOK

US Federal Reserve Chair Jerome Powell on Wednesday spoke against the possibility of negative interest rates for the US economy. Powell’s remarks at the congressional Joint Economic Committee seemed to go against President Donald Trump’s insistence for low and even negative federal funds rates. Powell insisted that the outlook was good thanks to ongoing growth, strong labor market and steady inflation.

“Negative interest rates would certainly not be appropriate in the current environment. Our economy is in a strong position. We have growth, we have a strong consumer sector, we have inflation … You tend to see negative rates in the larger economies at times when growth is quite low and inflation is quite low. That’s just not the case here,” he said.

Germany’s economy barely avoided entering into a recession in the third quarter, after Thursday-released gross domestic product (GDP) figures showed there was growth of 0.1%. The data by the Federal Statistics Office was higher than the -0.1% contraction expected by market analysts. But the country’s second-quarter GDP was revised down from -0.1% to -0.2%. The report by the federal government showed that the economy grew by 0.5% from July to September this year.

Japan’s Economy Minister Yasutoshi Nishimura said on Thursday that deteriorating relations with South Korea had a “big impact” on exports in the third quarter. The exports dropped by 0.7% compared to the previous quarter. He added that the trade war between the US and China was another reason behind the fall in exports.

China’s industrial production increased by 4.7% year-on-year last month, data released on Thursday by the National Bureau of Statistics showed. The figure was lower than of the 5.4% growth forecast and September’s 5.8%. The factory output of the world’s second-largest economy significantly fell due to a drop in global and domestic demand as well as the protracted Sino-US trade war.

Mohammad Barkindo, the Secretary General of the Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday that the United States shale production would likely see a downward revision entering into 2020. The world’s energy cartel expects the US shale oil companies’ output growing by only around 300,000 to 400,000 barrels per day.

EURUSD

The common currency’s fall was halted on Thursday European open as the continent’s powerhouse, the German economy narrowly avoided a recession in the year’s third quarter. Germany’s GDP saw a rise of 0.1 percent versus the expected contraction of -0.1 percent. Earlier hawkish remarks by the Fed Chair Powell were pushing down the pair price but now it’s rising towards 1.1030 at the 50 percent Fibonacci retracement that previously acted as a firm support. A further upwards move will take us to 1.1040. In the case of a fall, the solid support of 1.0994 at the 61.8 Fibo will be watched. 1.0980 is another downward target.

Support: 1.0994- 1.0980
Resistance: 1.1030- 1.1040

GBPUSD

The UK pound continues its steady path but with a tendency to erase the early gains made thanks to Brexit Party leader Farage’s electoral strategy in favor of the PM Johnson’s ruling Conservatives. The recent push-down was induced by the US Fed Chair Powell’s hawkish remarks during a congressional testimony. Johnson on Wednesday promised to end the “unbearable” uncertainty surrounding Brexit in December 12 snap elections. With the pair price falling, the 1.2820 support at the 23.6 Fibonacci retracement and then 1.2800 levels can be watched. With relatively less fluctuations, we might also see a return to 1.2860 and then 1.2900, a farther upward target.

Support: 1.2820–1.2800
Resistance: 1.2860 -1.2900

USDJPY

The Japanese yen is largely holding steady against the US dollar in the previous several sessions investors in Asia remain weary of the Sino-US trade war and anti-Communist demonstrations in Hong Kong. The yen is pushing the pair price down as Asia-Pacific markets close as we designate 109.00 and then 108.80 as support levels. In a scenario where the US dollar gets stronger, 109.20 and later 109.30 should be watched. 109.45 remains a farther target ahead of the Japanese 3rd quarter GDP figures on Thursday.

Support: 109.00- 108.80
Resistance: 109.20-109.30 -109.45

GOLD

Precious metal prices inched down earlier after Fed Chair Powell’s hawkish stance during a hearing the Congress but they made a comeback quick afterwards largely on the ongoing, unresolved Sino-US trade war. As gold prices continue to rise amid the renewed commerce and geopolitics-related worries, we will watch 1470 and then 1476 levels. Still above 1482 near the lower band of the closing triangle we were following before the recent drop can come into focus. In a reverse, 1460 at the 61.8 Fibonacci retracement and 1456 should be followed.

Support: 1460 -1456
Resistance: 1470 -1476–1482

BRENT

Oil prices rose after the American Petroleum Institute reported on Wednesday that US crude stockpiles by fell by 541,000 barrels in the week to November 8. The surprise drop in the inventories was against the expected increase of a 1.6 million barrels. The OPEC secretary general’s remarks that US shale production would fall provided support for prices. Brent price is again well above the upper band of the falling channel and rising. 71.70 and 72.00 are two likely near targets. 72.30 can be followed depending on what the EIA report reveals today. In the event of a fall, 71.00 and 70.60 should be watched. 70.00 near the upper band remains a viable support.

Support: 71.00 -70.60- 70.00
Resistance: 71.70-72.00-72.30

DAX

The German index fell on Thursday open as the Eurozone’s powerhouse economy avoided a recession in the year’s third quarter. The GDP that came at 0.1 percent was better than the expected -0.1 contraction but investors fled from the Dax 30 due to their lowered hopes for a government stimulus given that the economy stood its ground despite the pessimistic prospects. However, the index continues to ride near a nearly year-long top slightly above 13 200 that provides support. If that line is broken, we will watch 13 155 and 13 130. Later 13 100 will be a stronger support. A potential turnaround in pricing will see us climb back to 13 270 and then 13 300. 13 330 remains a crucial upwards target.

Support: 13 155-13 130- 13 100
Resistance: 13 270 -13 300-13 330

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