21 December 2018 Morning Session Analysis
Is US heading towards a recession?
Greenback slipped to 1-month low against other major currencies on Thursday following concerns that United States may be heading for a sharp economic decline despite Federal Reserve’s call to raise interest rates further next year. The dollar index tumbled 0.66%, last seen around 95.85 during Asian trading sessions. Despite Fed official’s call to raise interest rates three times by early 2020, US bond yield curve (widely considered as the indicator of future recessions) has flattened to 10 basis points, a tad above 11-years low. An inversion in yield curve is seen as a sign of economic recession as long-term bond yield fell below short-term bonds, triggering a flight in risky assets towards safe-haven such as Japanese yen and gold. Furthermore, the US dollar experienced additional bearish pressure following the release of downbeat economic data on yesterday. According to Philadelphia Fed, its Manufacturing Index for the month of December fell sharply to 9.4, missing economist forecast for a reading of 15.6. This has added up to a numerous series of recessive economic data which downplays US economic outlook in the long-term. Against other major currencies, GBP/USD rose 0.11% to 1.2670 while USD/JPY depreciates by 0.16% to 111.09.
In the commodities market, crude oil price appreciates by 0.39% to $46.09 per barrel. The commodity price received some support after Saudi Arabia announced its plans to cut oil output more than it has committed during OPEC meeting in Vienna. Otherwise, gold prices extended gains by 0.21% to $1,262.44 a troy ounce following broad weakness in the US dollar.
Today’s Holiday Market Close
Time Market Event
N/A
Today’s Highlight Events
Time Market Event
N/A
Today’s Highlight Economic Data
| Time | Market & Data | Previous | Forecast | Actual |
| 17:30 | GBP – GDP (QoQ) (Q3) | 0.6% | 0.6% | – |
| 21:30 | USD – Core Durable Goods Orders (MoM) (Nov) | 0.2% | 0.3% | – |
| 21:30 | USD – GDP (QoQ) (Q3) | 3.5% | 3.5% | – |
| 21:30 | CAD – Core Retail Sales (MoM) (Oct) | 0.1% | 0.2% | – |
| 21:30 | CAD – GDP (MoM) (Oct) | -0.1% | 0.2% | – |
| 23:00 | USD – Core PCE Price Index (MoM) (Nov) | 0.1% | 0.2% | – |
| 23:00 | USD – Michigan Consumer Sentiment (Dec) | 97.5 | 97.6 | – |
| 23:00 | USD – Personal Spending (MoM) (Nov) | 0.6% | 0.3% | – |
| 23:00 | USD – Personal Income (MoM) (Nov) | 0.5% | 0.3% | – |
| 02:00
(22nd) |
CrudeOIL – US Baker Hughes Oil Rig Count | 873 | – | – |
Technical Analysis
DOLLAR_INDX, H1: Dollar index was traded higher following prior rebound from the support level near 95.60. MACD which begins to form a golden cross signal suggest the index to be extend its gains in short-term as technical correction.
Resistance level: 96.00, 96.35
Support level: 95.60, 95.40
GBPUSD, H4: GBPUSD remains traded within a narrowing triangle following prior retracement from the top. Due to the lack of signal from Stochastic Oscillator and price action, it is suggested to wait for a breakout before entering the market.
Resistance level: 1.2700, 1.2770
Support level: 1.2575, 1.2500
EURUSD, H1: EURUSD was traded lower following prior retracement from the resistance level near 1.1490. MACD which has formed a bearish signal suggests the pair to extend its losses after closing below 1.1450.
Resistance level: 1.1490, 1.1520
Support level: 1.1450, 1.1410
USDJPY, H4: USDJPY was traded higher following prior rebound from the lower levels. MACD histogram which illustrate diminishing downward momentum suggests the pair to be traded higher in short-term as technical correction.
Resistance level: 111.60, 111.20
Support level: 110.70, 110.20
AUDUSD, H4: AUDUSD was traded flat within the range of 0.7140 and 0.7105. MACD which illustrate diminishing downward momentum suggests the pair to be traded higher in short-term, before extending its losses based on the current downward trendline.
Resistance level: 0.7140, 0.7170
Support level: 0.7105, 0.7060
NZDUSD, H1: NZDUSD was traded lower following prior retracement from the resistance level near 0.6780. MACD which illustrate diminishing upward momentum suggests the pair to be traded lower in short-term as technical correction.
Resistance level: 0.6780, 0.6840
Support level: 0.6710, 0.6650
USDCAD, H1: USDCAD remains traded within an ascending wedge. Stochastic Oscillator which illustrate a rebound signal suggests the pair to be traded higher in short-term, towards the direction of 1.3530.
Resistance level: 1.3530, 1.3615
Support level: 1.3430, 1.3380
USDCHF, H4: USDCHF was traded lower following prior closure below the support level of 0.9870. MACD which illustrate bearish signal and momentum suggests the pair to advance further down, towards the direction of 0.9820.
Resistance level: 0.9870, 0.9905
Support level: 0.9820, 0.9770
CrudeOIL, H1: Crude oil price was traded higher following prior rebound from a lower level. MACD which illustrate positive divergence signal suggests its prices to be traded higher in short-term as technical correction.
Resistance level: 47.50, 49.50
Support level: 45.40, 43.70
GOLD_, H4: Gold price extended its gains following prior closure above the resistance level at 1253.00. MACD which continues to illustrate bullish signal suggests the commodity price to advance further up after closing above 1263.20.
Resistance level: 1263.20, 1270.00
Support level: 1253.00, 1242.10