Today brings US CPI Inflation and the Fed Meeting with what is widely expected to be the bank third hike this year.
The US CPI is expected to come out 0.4% m/m and y/y inflation is expected to rise to 2.2% in November from 2.0% a previous number. On the other hand, Core inflation is expected to be 1.8%. Acceleration in headline inflation may push US Dollar Index and bond yields higher.
The Federal Reserve will conclude their last meeting for 2017 with the announcement of their interest rate decision. The FOMC meeting that is almost certain to generate a rate hike decision will shape the market. The target of 1.25 – 1.50%; which has been so expected. Also, It will be significant in the press conference, what the Fed says about their plans for 2018. If the Federal Reserve projects a more aggressive 2018 interest rate hike outlook, the US dollar would rise sharply.
Additionally, Traders will focus on UK October Unemployment Rate today and it is expected to decline to 4.2% from 4.3%. A Better than the previous realization in Unemployment Rate would be considered positive for UK economy which is expected to get hurt by the Brexit process.
Crude Oil Inventories will be another release to be followed closely today. Crude oil stocks are expected to decline by 3.759 M this week. It may be important for oil prices. Note that oil stocks declined by 5.610M barrels in last week.
Technical Analysis:
EUR/USD: Today is significant for US Dollar. US CPI Inflation and the FOMC Rate decision will be published. Ahead of the Rate decision, the EUR/USD pair is trading above the 1.1720 key support level. If the price breaks down and stays below 1.1720, on a four-hourly basis, the bearish action may gain more momentum. At this point, next support levels can be found at 1.1660 and 1.1607. Otherwise, if the price shows an upward movement, we will face 1.1769 and 1.1812 as resistance levels.
Support: 1.1720 – 1.1660 – 1.1607
Resistance: 1.1769 – 1.1812 – 1.1884
GOLD: The Gold price is currently trading below the 1243 daily level. As long as the yellow metal stays below 1243 on a daily basis, the bearish action may accelerate. At this point, we will watch 1235 and 1230 as support levels.On the other hand, If the price goes beyond 1243. The next resistance level will stand at 1249
Support: 1235 – 1230 - 1255
Resistance: 1243 – 1249 – 1256
USD/JPY: The USD/JPY pair is now trading below the 113.63 key resistance level. In order for the bullish action continue, it needs to rise and remains above 113.63 on a four hourly basis. In this case, next resistance levels will stand at 114.11 and 114.63. Otherwise, if the price shows a downward movement, we will watch again support level at 112.94 and 112.46
Support: 112.94 – 112.46 – 112.08
Resistance : 113.63 – 114.11 – 114.63
USD/CAD: The USD/CAD pair moved up yesterday and it is currently trading above the 1.2852 key support level. As long as the price trades above 1.2852, on a four-hourly basis, the Greenback may gain more value versus the Canadian Dollar. In this case, we will watch daily resistance level at 1.2918. On the other hand, If the price drops below 1.2852, the next support level can be found at 1.2754.
Support: 1.2852 – 1.2754 – 1.2699
Resistance: 1.2918 – 1.3019 – 1.3122
GBP/USD: The GBP/USD pair found sellers from the 1.3370 main resistance level yesterday and dropped to 1.3305 yesterday. UK Unemployment rate will be followed closely today. Ahead of the UK Unemployment rate, If the price breaks down and stays below 1.3305, on a four-hourly basis, the bearish action may gain more momentum. At this point, the next daily support level will stand at 1.3241. Otherwise, if the price shows an upward movement above 1.3305, we will face 1.3370 again as a resistance level.
Support: 1.3305 - 1.3241 – 1.3199
Resistance: 1.3370 – 1.3432 - 1.3485