After the calendar went quiet at the end of last week and the trading lull of the US Thanksgiving holiday, the data cranks up once more this week. It is a raft of inflation, PMIs, and unemployment data from across the regions. 

For the major announcements, Eurozone inflation is expected to continue higher, adding to the headache for the ECB. In the US, will data continue to paint a picture of gradual economic deterioration? After last week’s shock negative surprises in the flash PMIs, the focus will be on whether the ISM will move into contraction. Jobs data also looks to be turning sour as ADP and Nonfarm Payrolls are expected to falter.

Watch for: 

  • North America – US Consumer Confidence, Prelim US GDP, ISM Manufacturing and Nonfarm Payrolls
  • Europe – Eurozone inflation and manufacturing PMIs
  • Asia – Japanese unemployment and industrial production along with Chinese manufacturing PMIs
  • LatAm – Unemployment for Mexico, Chile, Brazil and Colombia, in addition to the Brazilian GDP

North America

N.B. Forecasts are the latest available consensus 

US dollar (USD)

The USD has had a bad few weeks, turning corrective across the major forex pairs. Economic data is increasingly deteriorating and also often surprising to the downside. In the wake of the dovish lean of the November FOMC minutes, this is adding momentum to the correction. 

Looking at the consensus for this week’s tier-one data, the picture is not looking any rosier. Consumer Confidence is falling, housing data continues to deteriorate and the ISM Manufacturing is expected to move into stagnation. Add in deteriorating jobs data on ADP and Nonfarm Payrolls faltering (payrolls growth around two-year lows) and the outlook for the USD appears set for now. If Treasury yields continue to track lower, so will the USD.

Canadian dollar (CAD)

With the Bank of Canada already more cautious in its tightening, the CAD continues to be the least volatile of the major currencies, and closest to tracking the performance of the USD. There is little reason to believe this will change any time soon. The deterioration in the performance of oil leaves little to drive CAD strength. There may be some added interest in CAD with GDP, the Manufacturing PMI and unemployment this week, but we are not positioning for any volatile moves.

  • USD/CAD – Having rebounded to the 1.3500 neckline resistance of the top pattern, the pair has fallen away once more. With the RSI negatively configured, rallies remain a chance to sell, with the 1.3020 implied correction from the head and shoulders top yet to be achieved. We favour a test of the 1.3225 support this week.


With Treasury yields slipping back lower in recent sessions, the rally in commodities has taken hold once more. With such strong negative correlations, any moves in yields remain vital for the outlook on precious metals. Lower yields help to support metals prices. 

There has been increased chatter about OPEC+ production levels in recent weeks. Any newsflow around this will impact oil. Saudi’s continued insistence on no change to levels could add some support to oil. However, as the US economic data increasingly underwhelms, a slide towards recession is developing. This continues to weigh on oil.

  • Brent Crude Oil – Oil is continue to trade with a near $20 medium-term range broadly between $83.50/$101.00. There is a mid-range pivot area between $88.25/$90.40 which is a gauge for the outlook within the range.
  • Gold – The medium-term recovery is being aided by the big double-bottom base pattern, with the neckline support around $1728/$1735 holding well. The bulls will look to use this as a basis for the next leg higher to test the $1786 resistance.
  • Silver – The market has a basis of support between $20.57/$21.25 following the breakout in recent weeks. We favour buying into weakness to retest neat term resistance at $22.25, but the market has struggled for traction in the past couple of weeks.

Wall Street

After the lull of Thanksgiving last week, the chatter will be about how companies have performed on Black Friday and Cyber Monday. This could elevate some interest for retailers especially. However, increasingly, for the coming weeks and until the end of the quarter, we may find that macro is the big driver of Wall Street. Therefore, if yields continue to fall, expect a Wall Street rally. We could also see the tech-heavy NASDAQ leading in this scenario too. 

  • S&P 500 futures – The medium-term recovery is on track having held on well to the support band between 3883/3935. The six-week recovery trend is also supportive in that band this week, as is the rising 55-day moving average. We look to use weakness as a chance to buy.
  • NASDAQ 100 futures – Holding the support around the neckline of the base pattern is key for the continued recovery. This leaves an important support band between 11525/11730 this week. Momentum has a positive bias backing a tentative strategy of buying into weakness. Resistance is at 12115 initially.
  • Dow futures – The strong run higher has broken through the resistance band 34000/34250. With strong momentum, we look to use weakness as a chance to buy. The old resistance is initially supportive at 34000/34250, whilst 33190 is a higher low now. The next important resistance is the key April lower high of 35410.


N.B. Forecasts are the latest available consensus 

Euro (EUR)

There will be a key focus on just how hot the inflation data comes in for the Eurozone. The German HICP will give early clues, but it looks like another significant jump in Eurozone inflation in November. Some members of the Governing Council have been sounding slightly less hawkish recently and the recent minutes of the last ECB meeting suggested growing concerns about a recession. However, the inflation pressures may continue to force the hand of the ECB into hiking by another 75bps in December. 

The EUR continues to perform well in the recovery, supported by the better-than-expected flash PMIs and German Ifo Business Climate. With the core/periphery yield spreads continuing to narrow, the positive momentum should ensure that corrections should be supported.

  • EUR/USD – Picking up from 1.0220 was key as it built on the breakout support between 1.0100/1.0200. Momentum is strong and suggests that weakness is a chance to buy for a test of the 1.0480 resistance. A breakout opens 1.0615 and potentially the May high of 1.0785.   

British pound (GBP)

GBP continues to confound some prettyr dreadful fundamentals for the UK. The performance is holding up relatively well across its major currency crosses, with Cable leading the way in recovery. There is a sense of relief that the “moron risk premium” is reversing following the further calming of the UK Autumn Fiscal Statement. Whilst we remain sceptical of GBP’s medium-term ability to continue to recover, the near-term positive momentum continues, for now. 

  • GBP/USD – the market continues to trend higher. With strengthening momentum, weakness is being bought into. Holding support at 1.1760/1.1780 is important, with the bulls looking towards the next key resistance of the August high at 1.2295.


The German DAX continues to be the big driver of the performance of the European indices. If US Treasury yields continue to falter and the USD correction continues, these fuel risk appetite. These are the conditions for the DAX to continue to perform well. FTSE 100 is a little more steady, but is also in strong recovery, helped by the continued strong performance of the heavily weighted energy and financials sectors.

  • DAX – The impressive six-week uptrend continues to underpin the recovery. Momentum remains strong but a crucial test lies ahead with the massive long-term resistance at 14700/14800. Support at 14125 remains an important first higher low.
  • FTSE 100 – The recovery uptrend remains supportive as the FSTE edges towards a test of first the September high (at 7516) and then the key August high (7578). With positive momentum, near-term weakness is still being seen as a chance to buy. Initial breakout support is at 7383/7441.


N.B. Forecasts are the latest available consensus 

Japanese yen (JPY)

Bond yields of major governments have fallen in recent weeks. This has allowed a significant recovery in the performance of JPY. As the spreads of major bonds yield versus JGBs have narrowed, the favourable yield differentials have driven a decisive recovery in the yen across major forex. If yields continue to fall, we expect JPY to remain strong. 

  • USD/JPY – As the market continues with the corrective trend lower over the past few weeks, rallies continue to be sold into. The resistance at 142.25 will be key this week but with the RSI still correctively configured, this favours a test of the 137.65/138.05 support. A closing breakdown opens the next leg lower. 
  • AUD/JPY – The market has turned into a tight choppy range over the past month. Support at 92.60 marks the range bottom, with resistance at 95.75. There is the slightest hint of lower highs that leave a mild corrective bias, but with the RSI hovering around 50 there is little decisive direction. 

Australian dollar (AUD)

The AUD has rallied decisively as the USD has faltered and risk appetite has notably picked up. If Treasury yields continue to fall, then the AUD will sustain its recovery.

  • AUD/USD – A strong pick-up last week has now broken a big downtrend dating back to April. The next test is for a breakout above 0.6797 resistance which would open 0.6915. With momentum positively configured near-term corrections are a chance to buy. Support at 0.6585 will be key this week.

New Zealand dollar (NZD)

The Reserve Bank of New Zealand hiked by 75bps and delivered what could be described as a hawkish hike (there could be potentially another 125bps of tightening until the terminal rate of 5.50%). This leaves NZD at the forefront of the performance of the forex majors as the USD continues to slide. 

  • NZD/USD – The impressive recovery remains on track. The rally has accelerated away from the five-week recovery trend to form a more aggressive three-week uptrend. The breakout support at 0.6160/0.6205 will be a good basis os support with the next key upside resistance not until 0.6470.


N.B. Forecasts are the latest available consensus 

Brazilian real (BRL)

The BRL has managed to stem the tide of selling versus the USD, at least for now. Brazilian Government bond yields continue to trend in the wrong direction (higher) and this is leaving BRL as an underperforming LatAm currency. 

  • USD/BRL –the pair continues to trade around the medium-term range highs although the BRL weakening has been restricted for now. Reaction to the near-term support band 5.280/5.334 will determine the next move, as the bias remains for pressure on the resistance between 5.4600/5.5600.

Mexican peso (MXN)

In a basket of LatAm currency volatility, the MXN remains a pillar of stability. The trend of gradual strength and outperformance has been quietly questioned but remains intact. Reaction to an expected increase in unemployment will be interesting, but given the macro backdrop, the jobless rate remains particularly low and under control.

  • USD/MXN – The MXN bulls continue to fight against any corrective forces and holding the pair decisively below 19.50 maintains the downside pressure on USD/MXN. Resistance is mounting overhead between 19.470/19.630 and we continue to favour a retest of the recent 19.250 lows.   

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