Slobodan Drvenica
Windsor Brokers
GBP/USD
GBPUSD dipped below 1.2500 handle and hit new lowest in 6 ½ months on Friday, after disappointing UK October retail sales and November PMI numbers further weakened sterling, adding to worsened geopolitical picture on threats of stronger escalation of war in Ukraine.
Strengthening dollar on euphoria of Trump trades, as well as increased safe-haven demand on deteriorating geopolitics contributes to negative near-term outlook to the British currency.
Cable is on track for the eighth consecutive weekly loss and also to end the second straight month in red, adding to developing reversal signals on larger timeframes (week / month).
Technical picture remains firmly bearish on daily chart, with strengthening negative momentum (14-d momentum continues to head south, deeply in negative territory) and MA’s in full bearish configuration (formation of 5/200; 10/200 and 20/200DMA’s death crosses).
However, RSI entered oversold territory and may contribute to week-end profit-taking that would provide stronger headwinds to bears and push the price higher.
Initial resistances lay at 1.2600 zone (today’s high / former lows of short consolidation / 100WMA), with upticks to be ideally capped under 1.2700 barrier (falling 10DMA / psychological) and guard upper breakpoint at 1.2818 (200DMA).
Res: 1.2600; 1.2624; 1.2680; 1.2700.
Sup: 1.2487; 1.2445; 1.2400; 1.2299.
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The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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