14 December 2017

Australian jobs report: Thursday, 00:30. The recent jobs report in Australia was somewhat disappointing, with a gain of only 3.7K jobs in October, lower than previous levels. The unemployment rate stood at 5.4%. In the recent rate decision, the RBA sounded upbeat about the jobs market, so perhaps October’s report was a one-off low and now we’ll get a rebound. A gain of 19.2K is on the cards and the unemployment rate carries expectations for remaining at 5.4%.

Swiss rate decision: Thursday, 8:30. The Swiss National Bank makes its decisions about the Libor Rate only once per quarter. It is expected to leave the rate unchanged at -0.75%, keeping it negative to discourage inflows that depress Swiss exports and also inflation. It will probably reaffirm its policy of occasional FX interventions to hold the CHF low. This comes despite the recent rises in EUR/CHF. A change in policy is unlikely, and will likely lead to a stronger franc. Many traders are still reeling from the January 2015 SNBomb.

UK rate decision: Thursday, 12:00. In November’s “Super Thursday” meeting, the Bank of England raised the interest rate back to 0.50%, citing the rise in inflation. However, it was a very “dovish hike”: they forecast only two more rate hikes in the span of three years. So, no change is expected now. This time, we will receive the meeting minutes but no new forecasts. It will be interesting to see if some members support a further hike to curb the still-high inflation, or if some regret the hike and want to cut it back to 0.25%. A unanimous “no-change” vote is more likely among the 9-member Monetary Policy Committee ahead of the holidays.

Euro-zone rate decision: Thursday, 12:45, press conference at 13:30. The big news was out already at the October meeting. The ECB will halve the volume of its bond-buys in January to 30 billion euros per month and the program will run through September 2018. Draghi left the door open to what happens afterward, and that was a dovish sign that sent the euro down. Since then, weak inflation reads, especially with core CPI slipping to 0.9%, vindicated his dovishness. This time, no changes are expected, but the ECB will publish new staff forecasts for inflation and growth. A downgrade of inflation forecasts could serve to weaken the euro and Draghi could join in. However, it is hard to ignore the robust growth, especially in Germany (0.8% q/q). As usual, Draghi will continue his balancing act. If he talks about ending QE after September, the euro will jump, but this is unlikely. The ECB can wait until around June to make such future announcements.


Australian jobs report


Swiss rate decision


UK rate decision


Euro-zone rate decision


Update: Started moving upwards as expected. 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.


Update: No changes. 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: Traded below the level of 1260. The upward movement could extend to the level of 1267. 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.

Update: Almost below the neckline of the head and shoulders pattern. We remain bearish. 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.

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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