USD remains weak, gold continued to rise

In the FX market the USD continued to weaken against its counterparts and is about to end the year in the reds. It should be noted that yesterday the GDP advance rate for Q3 showed that the expansion of the US economy was at a faster pace than expected, nevertheless it failed to materially support the USD. For the time being the USD remains under pressure as the wide US fiscal deficit creates worries, while at the same time, the market’s dovish expectations for the Fed’s intentions maintain a monetary outlook with interest rate differentials of the Fed with other central banks providing headwinds for the USD.

Also in the FX market JPY seems to have strengthened across the board in today’s Asian session. The minutes of BoJ’s October meeting disclosed that BoJ policymakers debated the necessity to continue hiking rates, in a hawkish signal from the Bank, which in turn was to the Yen’s aid. The markets continue to worry for a possible market intervention by Japan, which could boost JPY further, while tomorrow in the Asian session BoJ Governor Ueda is scheduled to speak and should he maintain a hawkish tone, we may see JPY getting additional support. At this point we note that with all these efforts of verbal market intervention by Japanese officials, JPY would have gotten more support by now.

USD/JPY continued to edge lower breaking the 156.00 (R1) support line, now turned to resistance. We note that the RSI indicator also dropped reaching the reading of 50, which implies an easing, if not an erasing, of the bullish market sentiment for the pair. We note the pair’s bearish tendencies yet for the adoption of a clearcut bearish outlook we would require the pair to reach if not breach the 152.90 (S1) support line, thus opening the gates for the 149.15 (S2) support level which would allow us to draw a downward trendline showing the limitations of the downward movement. For a bullish outlook to emerge we would require the pair’s price to rise and break the 156.00 (R1) resistance line aiming for the 158.80 (R2) resistance barrier.

In the metal’s market we note that gold’s price has been in record high levels since the start of the week. The precious metal’s price found support from the market’s expectations for the Fed to ease its monetary policy further, yet also from market worries for the US fiscal outlook and geopolitical issues that maintain the uncertainty in the markets. We should note though that gold is not the only attractive trading instrument in the metal market and gold’s rally may have been partially overshadowed by the rally of silver and platinum.

Gold’s price continued to rise, aiming for the 4600 (R1) resistance line yesterday, yet gold bulls seem to hesitate in today’s Asian session. We maintain a bullish outlook for the precious metal’s price as long as the upward trendline guiding it remains intact. The RSI indicator remains above the reading of 70, signaling a strong bullish market sentiment for gold’s price, while at the same time highlights that gold’s price has reached overbought levels and is ripe for a correction lower. Similar signals are coming from the price action surpassing the upper Bollinger band. Should the bulls maintain control over gold’s price we may see it aiming for the 4600 (R1) line. Should the bears take over we may see gold’s price dropping, breaking initially the 4380 (S1) line and continue to break the prementioned upward trendline in a first signal of an interruption of the upward movement and then continue to break the 4245 (S2) level.

その他の注目材料

Today, we get the US weekly initial jobless claims figure, while tomorrow, in Japan, BoJ Governor Ueda is scheduled to speak. On Friday we get from Japan Tokyo’s CPI rates for December and the preliminary industrial output for November. On Monday, we note from Japan the release of BoJ’s Summary of Opinions for the December meeting, while oil traders may be more interested in the release of the US EIA crude oil inventories figure. Furthermore, we note that the holiday season is approaching, and thus may create thin trading conditions in the markets.