US Inflation: Wednesday, 13:30. Hours before the Fed decision, we will get to know if inflation remains subdued and how “transitory” it really is. The report for October showed a small rise in core inflation, from 1.7% to 1.8% y/y, prompting the same tick up in the Fed favourite Core PCE, from 1.3% to 1.4%. Another rise in the report for November will make a more convincing case for a rate hike, but surprises are not uncommon. A rise of 0.4% is projected for headline CPI and +0.2% for core CPI.
US rate decision: Wednesday, 19:00, press conference at 19:30. The Fed is expected to raise rates for the fifth time in the cycle and third time this year. The hike from to a range of 1.25% to 1.50% has been well-telegraphed for a long time. This time, the Fed also releases forecasts for inflation, employment, growth, and interest rates. At the moment, the central bank foresees three additional hikes in 2018. Will they stick to their guns? Markets are skeptical, but they will probably signal continuity before Powell makes his own mark. However, this is an open question as inflation remains low. Outgoing Fed Chair Janet Yellen initially shrugged off lower price rises as “transitory“, then called it “a mystery” and eventually admitted that it might not necessarily be that transitory. What are her views this time? Apart from the forecasts, the tone of the statement and her press conference, her last post-rate decision statement, will be telling. We can expect incoming Chair Jerome Powell to vote with the majority as always and we can expect Neel Kashkari of the Minnesota Fed to dissent, as he previously did earlier in the year. The Fed will try not to rock the boat too much, but markets may cling to any small semantic change in the statement, a shift in the projections, or Yellen’s tone to try and look into 2018.
USD
US Inflation
US rate decision
- EURUSD
Update: Still traded above the uptrend line. The pair managed to reach the uptrend line shown in blue on the chart above. Therefore, we are bullish this week as long as the pair is traded above that. Our expected target for the week is 1.1950. This is conditioned by the continuation of trading above the uptrend line.
| Resistance levels: | Support levels: | Recommended: |
| ▪ 1.2000 ▪ 1.2100 ▪ 1.1960 |
▪ 1.1500 ▪ 1.1300 |
We remain bullish as long as the pair is traded above the uptrend line. |
- GBPUSD
Update: On its way to reach the uptrend line. As could be seen on the chart above that the pair is in nowhere to enter the market. So, we will be waiting for it to reach the uptrend line shown in red so we can go long targeting the level of 1.3450.
| Resistance levels: | Support levels: | Recommended: |
| ▪ 1.3700 ▪ 1.3650 ▪ 1.3540 |
▪ 1.2990 ▪ 1.2900 ▪ 1.2800 |
Waiting for the pair to reach the uptrend line. |
- GOLD
Update: Reached the level of 1239 so let’s see what will happen. Last week, the pair managed to breakthrough the uptrend line shown in red besides the support level of 1260 (resistance now). It may continue going down to reach the level of 1239 and if it is broken, we can go short targeting the level of 1220 followed by 1200.
| Resistance levels: | Support levels: | Recommended: |
| ▪ 1350 ▪ 1305 ▪ 1300 |
▪ 1260 ▪ 1240 |
If the level of 1239 is broken, we can go short. |
- AUDUSD
Update: We remain the same. The pair is still traded below the broken neck-line of the head and shoulders pattern detected a few weeks ago. Therefore, we will remain bearish. Our target for this week is 0.7400.
| Resistance levels: | Support levels: | Recommended: |
| ▪ 0.8100 ▪ 0.8060 ▪ 0.7940 |
▪ 0.7400 ▪ 0.7500 |
We remain bearish as long as the pair is traded below the nick line of the pattern. |
- GBPJPY
Update: We remain bearish. As could be seen on the chart above that the pair is traded below a strong resistance level 152.90. So, we believe that as long as the pair is traded below it, it is highly recommended to go short targeting the level of 150 followed by 149.70 during the week.
| Resistance levels: | Support levels: | Recommended: |
| ▪ 152.90 ▪ 152 |
▪ 148 ▪ 147 |
We remain bearish as long as the pair is traded below the level of 152.90. |
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