There is a sense of consolidation across major markets this morning as traders look ahead to the crucial US CPI inflation data later in the session. With a lack of driving newsflow, traders are seeing the slightest USD positive bias with indices also a shade lower. However, all eyes will be on the US inflation data after last month's massive upside surprise caused shockwaves across markets. The Michigan Sentiment is also on the docket.

Today’s news

  • Main drivers: Market markets are cautious in early moves; slight USD positive bias; UK monthly GDP misses estimates; Economic calendar: US CPI inflation and Michigan Sentiment later
  • Sentiment mixed: European indices are weaker again but off earlier session lows, a mild USD positive bias, precious metals slipping again, oil flat.
  • UK data disappoints: a raft of UK data for October has disappointed this morning. Monthly GDP growth of just +0.1% (+0.4% exp), Industrial Production also weaker than expected and a worse than expected trade balance [GBP negative]
  • USD positive bias ahead of inflation: USD strengthened significantly after an upside surprise in last month’s US CPI data. There is a slight upside USD bias ahead of the latest data which is expected to show another rise in inflation 
  • Central bank speakers: the FOMC is in its Blackout Period. There will be no FOMC speakers until after the next FOMC meeting on Wednesday 15th December.
  • Economic Data:
  • US CPI at 1330GMT is expected to see the headline CPI increasing to 6.8% YoY in November (from 6.2% in October) and core CPI increasing to 4.9% (from 4.6%).
  • Michigan Sentiment at 1500GMT is expected to slip slightly in December to 67.1 (from 67.4 in November)

Markets Outlook

Broad outlook: a cautious look across major markets ahead of US CPI data, with a slight USD positive bias. This is a drag on precious metals however, there are hints that indices may be getting ready for the next leg higher again.

  • Forex: a slight USD positive bias forming ahead of US CPI. We are anticipating a significant reaction across major forex following the US inflation data.
  • EUR/USD a drift lower from 1.1355 continues as the pair unwinds into the middle of the range between 1.1185/1.1385. Initial support 1.1227.
  • GBP/USD with another rally into downtrend resistance which is now seeing the pair falling over. We look for further weakness and a retest of the recent lows of 1.3160/1.3170. Below 1.3130 the next real support is 1.2850. Resistance comes in between 1.3260 and 1.3290.


  • AUD/USD the recovery is consolidating. We would look to use weakness as a chance to buy, with support between 0.7115/0.7140. A move above 0.7185 opens 0.7275.
  • Commodities: having built support precious metals are starting to fall over again. Oil is drifting back slightly.
  • Gold has once more fallen over between $1790/$1800 and a renewing negative drift is now testing the support at $1762/$1772. Technical signals continue to favour selling into strength for a retest of $1758. The bulls need a break above $1815.
  • Silver breaking down below support at $22.00/$22.25 to continue the trend lower for a test of crucial support at $21.40. The old support is now acting as resistance. Above $22.60 needed to engage a recovery.
  • Brent Crude oil recovery has just eased back slightly towards the near term breakout support around $73.20/$73.50 and is looking to build a higher low for the next leg higher. Key resistance overhead at $77.80.

Indices: A near term unwinding drift looks to be starting to form the support needed for the basis of the next leg higher. We look to use supported weakness as a chance to buy.   

  • S&P 500 futures have unwound from 4711 and is looking to build support around the pivot band 4650/4669. We look for a retest of the highs again at 4740.
  • DAX has corrected back into the support band 15,510/15,600 and the bulls will look to build a new higher low. Although the correction is still trending lower over the past couple of days, there are signs of a shift in sentiment forming. Initial resistance is 15,685/15,760.
  • FTSE 100 after the corrective drift into the band of support around 7260/7320 there are signs of a shift in sentiment coming as the market picks up from session lows at 7297. A move above 7341 re-opens the resistance at 7401.

Support and resistance levels