Weekly Market Analysis

By Samir El Khoury, ACSI, ACICMP?

The most important events of the past week

United States of America

- The Fed’s minutes of the November meeting were issued, highlighting the most prominent points contained therein:

• The Fed is now in a position to proceed cautiously with regard to interest decisions.
• Any future decisions to raise interest rates again will be based on the overall picture painted by the data.
• Businesses and households face pressure from higher interest rates and more restrictive lending conditions at banks.
• The Fed still needs more evidence about inflation adopting a downward path towards the target of 2%.
• Market developments must be closely monitored.

- The existing home sales index declined, recording 3.79M, which is lower than expectations (3.90M) and the previous reading (3.95M).

- The initial jobless claims index declined, recording 209K, a percentage that exceeded expectations (225K) and the previous reading (233K).

- The basic durable goods orders index declined on a monthly basis, recording 0%, which is lower than expectations (0.1%) and the previous reading (0.2%).

- The services PMI rose, recording 50.8 points, which exceeded expectations (50.4) and the previous reading (50.6).

- The Manufacturing PMI fell to 49.4 points, which is lower than expectations (49.8) and the previous reading (50.0).

- US crude oil inventories rose by 8.70 million barrels, which exceeded expectations (1.16M) and the previous reading (3.59M).

Canada

• The Consumer Price Index declined on an annual basis, recording 3.1%, which is lower than expectations (3.2%) and the previous reading (3.8%).
• The retail sales index in Canada rose on a monthly basis, recording 0.6% points, which exceeded expectations (0.0%) and the previous reading (-0.1%).

Eurozone

• The services PMI rose, recording a contraction of 48.2 points, a percentage that exceeded expectations (48.1) and the previous reading (47.8).
• The Manufacturing PMI Index rose, recording a contraction of 43.8 points, a percentage that exceeded expectations (43.4) and the previous reading (43.1).

United Kingdom

• The Services PMI rose, recording a growth of 50.5 points, which exceeded expectations and the previous reading (49.5).
• The Manufacturing PMI rose, recording a contraction of 46.7 points, which exceeded expectations (45.0) and the previous reading (44.8).

Japan

• The Consumer Price Index on an annual basis recorded 3.3%, which is lower than expectations (3.4%) but higher than the previous reading (3.0%).
• The services PMI rose, recording a growth of 51.7 points, which is higher than the previous reading (51.6).
• The Manufacturing PMI decreased, recording a contraction of 48.1 points, which is lower than expectations (48.8) and the previous reading (48.7).

The most important events of this week

This week, financial markets are eagerly awaiting the release of several key economic indicators:

• Building permits and new home sales indices in the United States of America are released today.
• On Tuesday, the markets are also awaiting the retail sales index in Australia and the consumer confidence index in the United States of America.
• On Wednesday, the markets await the interest decision issued by the Central Bank of New Zealand, amid expectations that it will keep the interest rate unchanged at the level of 5.50%. In addition, the GDP and US crude oil inventory indicators will be released in the United States of America.
• As for Thursday, the industrial production and retail sales indices in Japan, building permits in Australia, the manufacturing and non-manufacturing purchasing managers’ indices in China, the consumer price indices and the unemployment rate in the Eurozone and the gross domestic product in Canada will be released, in addition to the core personal consumption expenditures price, initial jobless claims and pending home sales indices in the United States of America.
• Finally, on Friday, the manufacturing purchasing managers’ index will be released in Australia, the Eurozone, Britain, and the United States of America, the unemployment rate in Japan, the Caixin industrial purchasing managers’ index in China, the rates of change in employment and unemployment in Canada, in addition to the manufacturing purchasing managers’ index issued by the Institute for Supply Management (ISM) United States of America.

Technical Analysis:

EUR/USD:

If the euro against the dollar breaks the pivot point of 1.0916, it may potentially target and test the support levels of 1.0867, 1.0803, and 1.0754. Conversely, if it surpasses the pivot point, it is likely to test resistance levels of 1.0980, 1.1029, and 1.1093.

GBP/USD:

The pound against the dollar, if it breaks the pivot point of 1.2550, has the potential to test the support levels of 1.2487, 1.2380, and 1.2316. However, if it exceeds the pivot point, it may test resistance levels of 1.2657, 1.2721, and 1.2828.

USD/JPY:

If the pivot point of 148.84 is broken for the dollar against the yen, there is a possibility that it will target the support levels 147.69, 146.00, and 144.85. But if it exceeds the pivot point, it is likely to target the resistance levels 150.36, 151.67, and 153.37.

GOLD:

If the pivot point of 1993 is broken for gold, there is a possibility that it will target the support levels 1977, 1951, and 1934. But if it exceeds the pivot point, it is likely to target the resistance levels 2019, 2035, and 2061.

BRENT CRUDE OIL:

If the pivot point of 80.65 for crude oil is broken, there is a possibility that it will target the support levels of 78.37, 76.15 and 73.87. If it exceeds the pivot point, it is likely to target the resistance levels 82.87, 85.15, and 87.37.

US30:

If the pivot point of 34,735 for the Dow is broken, there is a possibility that it will target the support levels 34,420, 33,893 and 33,577. If it exceeds the pivot point, it is likely to target the resistance levels 35,262, 35,578, and 36,105.

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.

Taurex is the trading name of Zenfinex Global Limited, Stochastic Africa SL Ltd, Zenfinex Global LLC, and Zenfinex Limited.

Zenfinex Global Limited is registered in the Republic of Seychelles with registration number: 8428731-1 and is regulated by the Financial Services Authority of Seychelles (license number SD092). Its registered office address is F20, 1st Floor, Eden Plaza, Eden Island, Seychelles.

Stochastic Africa (SL) Limited is a company registered in Sierra Leone with Company Number: SL270319STOCH05271 and is licensed by the Bank of Sierra Leone under license number BSL/SAL/2023 and with the registered office at 148D Wilkinson Road, Freetown, Sierra Leone.

Zenfinex Global LLC is a company registered with the Financial Services Authority in Saint Vincent and the Grenadines under registered number 138 LLC 2019. Its registered office is Hinds Building, Kingstown, Saint Vincent, and the Grenadines.

Zenfinex Limited is a company registered in England and Wales under registered number: 11077380. Authorised and regulated by the Financial Conduct Authority under firm reference number 816055. Its registered office is 4th Floor, 4 Eastcheap, London, EC3M 1AE, United Kingdom.

*All trading involves risk.