By Lukman Otunuga, Research Analyst at FXTM
.jpg)
The lingering impact of Governor Mark Carney’s inability to provide a concise timeframe on a UK rate rise has punished the Sterling this week as it continues to face headwinds from the Bank of England’s clear reluctance to hike rates which has encouraged sellers to depreciate the GBP further.
Even though economic data from the UK picked up in November, the non-existent rise in inflation has contributed to rate rise expectations being pushed back further. If the second estimate of the Q3 GDP points towards slowing economic growth, there is going to be further potential for the Pound to face losses.
Wednesday’s hefty profit taking in WTI Oil came to a halt on Thursday with further gains capped at the $43.30 dynamic resistance. The effects of the unexpected comments from Saudi Arabia earlier in the week regarding its willingness to cooperate to achieve stable prices may have fizzled out, as sellers have reappeared. It seems that the reoccurring theme of an excessive oversupply in the markets will continue to weigh heavily on investor sentiment, leaving this commodity fundamentally bearish with doors wide open for a further decline towards $39.
Apart from the awaited UK GDP report, Friday’s economic data calendar is relatively light and this may lead to a price action driven trading session. Focusing on the new month ahead, the spotlight will be directed back towards China as there will be a barrage of economic data releases on December 1 from the world’s second biggest economy, which should offer more perspective on its economic growth.
USDJPY: The increasing likelihood of the Federal Reserve raising US interest rates in the December meeting has encouraged bullish investors to propel the USDJPY to 3-month highs of 123.75. Previous resistance at 121.70 may act as a dynamic support which should provide the foundation for bulls to regain momentum. This pair remains technically bullish and the current correction may offer an opportunity for investors to send prices towards the psychological 125.00 resistance. Technical indicators such as the MACD and moving averages also marry this bullish view on the USDJPY.
WTI Oil: WTI oil is technically and fundamentally bearish. Prices have found some resistance below $43.30 and this may offer an opportunity for sellers to drag prices lower. The candlesticks are trading below the daily 20 SMA and the MACD has also crossed to the downside. There may be a decline towards the psychological $40 support.
FTSE100: The FTSE100 resides in a very wide range with support at 6215 and resistance at 6450. Technically prices are pointing up and will likely trade towards 6450. Prices are trading above the daily 20 SMA and the MACD has also pointed to the upside.
AUDNZD: This pair is technically bullish. There have been consistent higher highs and higher lows with prices finding some support above the daily 20 SMA. A breakout above 1.1100 may invite an opportunity for prices to trade towards 1.1350.
For information, disclaimer and risk warning note visit: www.ForexTime.com
FXTM is an international forex broker regulated by the Cyprus Securities and Exchange Commission (CySEC), and FT Global Limited is regulated by the International Financial Services Commission (IFSC)
