Daily Market Updates
29 Nov 2023

USD/JPY added to the weekly bearish tone and dropped to fresh five-day lows near 147.30 on turnaround Tuesday.

The continuation of the multi-session retracement in spot was underpinned by generalized losses in the greenback and extra weakness in US yields, which revisited multi-week lows across the board.

In the same line, JGB 10-year yields added to Monday’s drop and briefly pierced the 0.75% level.

The Japanese docket was empty on Tuesday.

If USD/JPY continues to decline, it might visit the November low of 147.15 (November 21), which is just ahead of the preliminary 100-day SMA at 146.87, as well as the weekly low of 145.89 (September 11) and the September bottom of 144.43 (September 1). There are no noticeable support levels beyond the latter until the August low of 141.50 (August 7), which looks to be strengthened by the proximity of the critical 200-day SMA (141.89) and comes ahead of the July low of 137.23 (July 14). On the flip side, the immediate hurdle emerges at the 2023 top of 151.90 (November 13), followed by the 2022 peak of 151.94 (October 21) and the 152.00 round figure. The RSI dropped to the 37 region.

Resistance levels: 149.74 149.98 151.42 (4H chart)

Support levels: 147.35 147.15 145.89 (4H chart)

An extra sell-off in the greenback gave wings to the Aussie dollar and the rest of the risk-linked galaxy, lifting AUD/USD to fresh tops near 0.6670, an area last traded in early August.

That said, the pair also managed to break above the key 200-day SMA (0.6581), opening the door to further gains in the short-term horizon.

In addition, the broad-based upbeat mood in the commodity complex contributed to the daily gains, particularly following the bullish performances of both copper and iron ore.

In Australia, preliminary Retail Sales are seen contracting 0.2% MoM in October.

For the AUD/USD, the November high of 0.6665 is immediately on the upside (November 27). A breach through this level might re-establish a challenge to the July top of 0.6894 (July 14). From here, the June peak of 0.6899 (June 16) aligns north, just before the key 0.7000 level. In contrast, the 55-day SMA at 0.6417 provides temporary support ahead of the 2023 bottom of 0.6270 (October 26). If this region fails, the pair is expected to drop to 0.6200, just ahead of the 2022 low of 0.6169 (October 13). The daily RSI flirted with the overbought area around 70.

Resistance levels: 0.6665 0.6739 0.6821 (4H chart)

Support levels: 0.6550 0.6521 0.6452 (4H chart)

The march north in the precious metal remained unabated for the fourth straight session on Tuesday, this time reaching new six-month highs past the $2040 mark per troy ounce.

Further weakness in the greenback in combination with the intense decline in US yields across the curve sponsored the move higher in bullion to levels last seen in mid-May, opening the door at the same time for a probable challenge of the 2023 peak of $2067 (May 4).

Also collaborating with the marked gains in the yellow metal emerged the persevering speculation of interest rate cuts by the Federal Reserve in H1 2024.

The November high of $2043 represents the next upward barrier for gold (November 28). If this level is surpassed, the 2023 top of $2067 (May 4) and the 2022 peak of $2070 (March 8) may be confronted before the all-time high of $2075 is reached (August 7, 2020). Having said that, occasional bearish efforts might bring gold down to the key 200-day SMA at $1942 prior to the November low of $1931 (November 13), which appears to be supported by the proximity of the preliminary 55-day SMA ($1937). Once this level is broken, a potential challenge of the October low of $1810 (October 6) may be on the horizon, seconded by the 2023 bottom of $1804 (February 28) and the large conflict zone of $1800.

Resistance levels: $2043 $2048 $2067 (4H chart)

Support levels: $1992 $1965 $1931 (4H chart)

Prices of WTI regained the smile and climbed to two-day highs near the $77.00 mark per barrel on Tuesday.

Crude oil reversed four consecutive sessions of losses on the back of firm hopes that the OPEC+ might decide to extend further its current oil output cuts or even deepen them at its meeting on Thursday.

In addition, the intense drop in the US dollar also added to the optimism surrounding traders ahead of the publication of the weekly report on US crude oil supplies by the API later in the NA session.

If the rebound in WTI gathers traction, it could revisit the key 200-day SMA at $78.06, seconded by the weekly high of $79.72 (November 14) and the November top of $80.15 (November 3). The preliminary 55-day SMA of $83.79 appears north of here, ahead of weekly peaks of $89.83 (October 18), $94.99 (September 28), and $97.65 (August 30, 2022), all before the psychological $100.00 mark. By contrast, further losses might approach the November low of $72.22 (November 16), before reaching the key $70.00 level per barrel, and the 2023 low of $63.61 (May 4), all of which are before to the critical $60.00 threshold.

Resistance levels: $76.94 $78.42 $80.86 (4H chart)

Support levels: $74.03 $72.13 $70.18 (4H chart)

The key European stock index DAX40 charted decent gains on Tuesday, although it faltered just ahead of the key 16000 threshold.

The small uptick in the index came despite some renewed hawkish chatter from ECB rate setters, while improvements in consumer confidence in both Germany and France seem to have lent some support to equities.

In the meantime, traders’ cautiousness remained high ahead of the publication of important results in the euro bloc and the US later in the week.

In the German fixed-income market, the 10-year bund yields dropped to the 2.50% zone for the first time since September.

The DAX40's next objective is the November high of 16041 (November 24), which matches almost exactly to the weekly high of 16042 (August 31) and is just ahead of another weekly top of 16060 (August 10). Further up comes the all-time peak of 16528 (July 31). On the contrary, there is early support at the 200-day SMA of 15670, which is ahead of the intermediate 55-day SMA of 15364. If this level is breached, the October low of 14630 (October 23) may be challenged once again before the March low of 14458 (March 20). On a daily basis, the RSI ticked higher to the vicinity of 71.

Best Performers: RWE AG ST, Infineon, Commerzbank

Worst Performers: Zalando SE, Bayer, Siemens Energy AG

Resistance levels: 16041 16060 16528 (4H chart)

Support levels: 15915 15617 15171 (4H chart)