Daily Market Outlook, November 25, 2022 

‘Sterling Soars To A Three-Month High ’

  • With US markets closed yesterday for the Thanksgiving holidays, Asian markets were somewhat lacklustre overnight, lacking a lead from Wall Street. China's covid concerns continue to cause alarm, however, it seems markets are choosing to focus on the potential for further monetary policy support as a positive. The Bank of Japan expressed little concern at the hotter-than-expected inflation print overnight, as they believe the current inflationary impulse is transitory, driven by energy prices and Yen weakness. Sterling posted a three-month high against the greenback as Bank of England officials continue to beat the hawkish drum as they remain focused on fighting inflationary pressures with a robust rates policy. Inflationary pressures and a lack of meaningful government response to public sector wages will see Nurse’s strike next week for the first time in history, as the government refuses to enter pay negotiations, pitiful given their plight during the pandemic.

  • For the day ahead: US markets will close early today, Black Friday marks the beginning of the holiday shopping season stateside. The data slate is pretty scent today, in the UK the Bank of England will release data on consumer credit, secured lending and mortgage approvals, all of which are expected to show a further deterioration in sentiment, as the appetite for borrowing remains diminished given the cost-of-living crisis and the rates environment.  Markets focus is likely to shift towards next week with the benchmark Non-Farm Payrolls report due, in the Eurozone flash CPI inflation data and in China official, PMIs will also be out. Markets will also hear from central bank heads Fed Chair Powell and ECB head Lagarde who is set to appear before the European Parliament.

Overnight Headlines

  • Tokyo November Core CPI Rises At Fastest Annual Pace Since April 1982

  • Asia-Pacific Stocks Mostly Lower, U.S. Markets Closes Early Friday

  • China’s RRR Rate Cut At All Banks Is Likely – Securities Journal

  • BoK May Go Up to 3.5% as Terminal Rate, Governor Rhee Says

  • Dollar Headed For Weekly Loss As Investors Brace For Slower Fed Hikes

  • Hedge Fund Rokos Warns That Sterling Is ‘Vulnerable’ To Further Falls

  • Japan’s 10-Year Yield Rises To Upper End Of BoJ’s Policy Band

  • Oil Set For Third Weekly Loss On Price-Cap Impasse, Demand Fears

  • Saudi, Iraqi Energy Ministers Meet Thursday, Review Oil Markets

  • Global Oil Market Flashes Warning Signs On Rising Demand Angst

  • U.S. Poised To Grant Chevron License To Pump Oil In Venezuela

  • Crypto Firm Binance To Commit $1 Bln For Crypto Recovery Initiative

  • Foxconn's Zhengzhou Plant Unlikely To Resume Full Prod By End-Nov

Technical & Trade Views

SP500 Bias: Bullish Above Bearish Below 3990

Technicals

  • Primary support is 3990

  • Primary upside objective is 4120

  • Next pattern confirmation, acceptance above 4050

  • Failure below 3950 opens a test of 3900

  • 20 Day VWAP bullish, 5 Day VWAP bullish

EURUSD Bias: Bullish Above Bearish below 1.0340

Technicals

  • Primary support is 1.0340

  • Primary upside objective is 1.0620

  • Next pattern confirmation, acceptance above 1.0485

  • Failure below 1.03 opens a test of 1.0220

  • 20 Day VWAP bullish, 5 Day VWAP bullish

  • Today’s New York Cut Option Expiries: 1.0250 (766M), 1.0280-85 (314M), 1.0380 (261M), 1.0300 (296M), 1.0380-90 (581M), 1.0400-10 (443M),  1.0450-60 (334M), 1.0500 (324M), 1.0550 (211M)

GBPUSD Bias: Bullish Above Bearish below 1.1950

Technicals

  • Primary support is 1.1950

  • Primary upside objective 1.22

  • Next pattern confirmation, acceptance above 1.21

  • Failure below 1.19 opens a test of 1.1770

  • 20 Day VWAP bullish, 5 Day VWAP bullish

  • Today’s New York Cut Option Expiries: 1.1860 (699M)

  • EUR/GBP: 0.8600 (270M), 0.8650-60 (1.03BN), 0.8775 (229M)

USDJPY Bias: Bullish above Bearish Below 142.20

Technicals

  • Primary resistance is 142.20

  • Primary downside objective is 136

  • Next pattern confirmation, acceptance below 138

  • Acceptance above 142.20 opens a test of 143

  • 20 Day VWAP bearish, 5 Day VWAP bearish

  • Today's New York Cut Option Expiries: 138.15 (300M), 138.50-60 (980M)

AUDUSD Bias: Bullish Above Bearish below .6680

Technicals

  • Primary support is .6680

  • Primary upside objective is .6900

  • Next pattern confirmation, acceptance above .6775

  • Failure below .6660 opens a test of .6600

  • 20 Day VWAP bullish, 5 Day VWAP bullish

  • Today’s New York Cut Option Expiries: 0.6700 (655M), 0.6850 (358M)

  • NZD/USD: 0.6170 (227M)

  • USD/CAD: 1.3300 (221M), 1.3390 (358M), 1.3500 (400M)

BTCUSD Bias: Intraday Bullish Above Bearish below 16100

Technicals

  • Intraday 16100 is primary resistance

  • Primary upside objective is 17000

  • Next pattern confirmation, acceptance below 16750

  • Failure 16000 opens a test of 15500

  • 20 Day VWAP bearish, 5 Day VWAP bullish