S&P 500 Gains Ground After Powell’s Comments On Inflation And The Labor Market

Key Insights

  • S&P 500 gained strong upside momentum after the release of Fed Chair Powell remarks. 
  • The market focused on the potential slowdown of the pace of Fed rate hikes. 
  • A move above 4000 will push S&P 500 towards the resistance at 4015.

Powell’s Remarks Provided Support To Stocks

S&P 500 moved higher after the speech from Fed Chair Powell as his remarks contained no surprises.

Powell noted: “The time for moderating the pace of rate increases may come as soon as the December meeting […] It is likely that restoring price stability will require holding policy at a restrictive level for some time.”

In general, Powell said the same things as Fed speakers in their recent public statements. The Fed will have to raise interest rates to a restrictive level and then hold them at this level for some time to make sure that inflation is under control.

Markets are focused on the potential slowdown of the pace of rate hikes. It looks that traders hope that inflation will start moving lower at a robust pace, and the peak rate would not be too high.

Treasury yields moved lower after Powell’s remarks, which was bullish for tech stocks. NASDAQ Composite gained strong upside momentum and made an attempt to settle above the 11,150 level. Tesla, Meta, NVIDIA, Alphabet, and Microsoft were up by more than 2% in today’s trading session.

S&P 500 Is Moving Towards The 4000 Level

S&P 500

S&P 500 moved above the 3960 level after Powell’s remarks. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge. The next resistance level for S&P 500 is located at 4000. A move above this level will push S&P 500 towards the 4015 level. If S&P 500 gets above 4015, it will head towards the resistance at 4040.

On the support side, the previous resistance at 3960 will serve as the first support level for S&P 500. If S&P 500 gets back below 3960, it will head towards the support at 3920. A successful test of this level will push S&P 500 towards the next support near the 50 EMA at 3885.

For a look at all of today’s economic events, check out our economic calendar.

Russian Oil Price Cap Negotiations Enter The Final Stage

Key Insights

  • EU countries are trying to reach a deal on the Russian oil price cap. 
  • The latest reports indicate that the price cap may be set at $60.
  • Neste data shows that Russia’s oil discount to Brent has been mostly stable in recent weeks. 

Russian Oil Price Cap May Be Set At $60

EU countries continue negotiations on the Russian oil price cap deal. Time is running out as the deal should be reached before December 5, when the EU sanctions on Russian oil will be implemented.

Yesterday, reports indicated that Poland and the Baltic countries, which are pushing for an aggressive price cap, had limited success, and EU discussed a price cap of $62 per barrel.

Today’s reports show that the potential price cap has moved to the $60 level. According to the reports, the deal may be reached if other demands are met. For example, Poland and the Baltic countries want a new package of EU sanctions on Russia.

Meanwhile, Greece wants to make sure that its shipping industry is not hit by the price cap scheme. Greece fears that non-EU countries will take its market share and transport Russian oil.

Russia’s Urals Discount To Brent Is Not Growing, According to Neste Data

Neste shows that Russia’s Urals discount to Brent oil has been in the $23 $25 range in recent weeks. According to the data, the discount is not growing despite recent reports that indicated that Urals price declined to $52 per barrel ahead of the price cap.

The oil price cap negotiations have been challenging as two groups within the EU had opposing views. It looks that the majority of the EU countries will be happy with a $60 $70 price cap, but the decision should be unanimous, so everyone has to agree with the proposed scheme.

At this point, the challenging negotiations had little impact on oil markets, which were focused on the recent developments in China. Oil traders believe that the price cap scheme would not disrupt the market, and Russian oil exports would not suffer a serious blow.

Traders should be prepared for strong moves after the EU announces the details of the price cap scheme, although it remains to be seen whether consensus will be reached ahead of the weekend.

For a look at all of today’s economic events, check out our economic calendar.

WTI Oil Stays Above $80 After EIA Report

Key Insights

  • Crude inventories declined by 12.6 million barrels from the previous week. 
  • Natural gas moved below the $7.00 level as rail strike risks declined. 
  • Copper rallied as traders bet that China would relax its zero-COVID policy after recent protests. 

WTI Oil Pulled Back From Highs But Stayed Above The Key $80 Level

WTI oil continues to trade above the $80 level after the release of the EIA Weekly Petroleum Status Report.

The report indicated that crude inventories declined by 12.6 million barrels from the previous week, compared to analyst consensus of 2.76 million. It should be noted that crude oil imports declined by 1 million bpd from the previous week.

Total motor gasoline inventories increased by 2.8 million barrels, while distillate fuel inventories grew by 3.5 million barrels. Domestic oil production remained unchanged at 12.1 million bpd.

The sharp drop in crude inventories was driven by the fall in crude oil imports, while gasoline and distillate fuel inventories increased significantly. In the near term, traders will stay focused on the upcoming OPEC+ meeting and the Russian oil price cap story.

Natural Gas Retreats As U.S. Lawmakers Are Ready To Prevent The Strike

Natural gas pulled back below the $7.00 level as traders reacted to the decreasing risk of a rail strike.

The U.S. lawmakers plan to pass legislation that would avert the strike, which is bearish for natural gas markets. At this point, it looks that natural gas has a good chance to gain additional downside momentum in the near term.

Gold Pulls Back From Session Highs As Dollar Rebounds

Gold has recently made another attempt to settle above the $1760 level but lost momentum and pulled back towards $1750 as the U.S. dollar rebounded from session lows.

Gold

If gold settles below the $1750 level, it will move towards the next support level, which is located near the 20 EMA at $1730. A move below this level will open the way to the test of the support at the 50 EMA at $1715.

On the upside, gold needs to settle above the resistance at $1765 to gain additional upside momentum. The next resistance level for gold is located at $1775. A successful test of this level will push gold towards November highs at $1785.

Other precious metals are moving higher as traders hope that China will gradually ease its strict zero-COVID policy. Silver made an attempt to settle above the $22.00 level. Platinum moved towards $1050, while palladium rebounded towards the $1850 level.

Copper Tries To Settle Above $3.75

Copper rallied towards the $3.75 level as traders bet that China’s demand would increase when the country relaxes its anti-coronavirus measures. If copper settles above $3.75, it will head towards the next resistance at $3.80.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Dollar Rebounds After JOLTs Job Openings Report

Key Insights

  • Euro Area Inflation Rate declined from 10.6% to 10%.
  • USD/CAD pulled back as WTI oil managed to climb above the $80 level. 
  • USD/JPY is moving towards the psychologically important 140 level. 

U.S. Dollar Rebounds From Session Lows

U.S. Dollar Index moved away from session lows after JOLTs Job Openings report indicated that job offers declined from 10.69 million in September to 10.33 million in October, mostly in line with the analyst consensus.

Traders also had a chance to take a look at the Pending Home Sales report, which indicated that Pending Home Sales declined by 4.6% month-over-month in October. High interest rates continue to put pressure on the housing market. This report served as an additional positive catalyst for the U.S. dollar.

Earlier, ADP Employment Change report indicated that private businesses added 127,000 jobs in November, compared to analyst consensus of 200,000. The second estimate of the third-quarter GDP Growth Rate report showed that GDP increased by 2.9% quarter-over-quarter, compared to analyst consensus of 2.7%.

EUR/USD Faced Strong Resistance Near 1.0400

EUR/USD made another attempt to settle above the 1.0400 level but lost momentum and pulled back towards 1.0350.

Today, traders focused on inflation data from the EU. Euro Area Inflation Rate declined from 10.6% in October to 10% in November, compared to analyst consensus of 10.4%. It remains to be seen whether one data point will change ECB’s plans.

EUR/USD

The nearest support level for EUR/USD is located at 1.0320. In case EUR/USD declines below this level, it will head towards the next support at 1.0280. A successful test of the support at 1.0280 will push EUR/USD towards the support at the 20 EMA at 1.0250.

On the upside, the nearest resistance level for EUR/USD is located at 1.0360. If EUR/USD climbs above this level, it will head towards the resistance at 1.0400. This resistance level has already been tested several times and proved its strength. A move above 1.0400 will open the way to the test of the resistance at 1.0440.

GBP/USD Tests Support At 1.1950

GBP/USD continues its attempts to settle below the support level at 1.1950. In case GBP/USD manages to settle below this level, it will have a good chance to gain additional downside momentum.

The recent comments of BoE chief economist Huw Pill, who said that inflation could fall rapidly in the second half of 2023, may put some additional pressure on GBP/USD.

USD/CAD Pulls Back After Yesterday’s Rally

USD/CAD settled in the 1.3500 – 1.3550 range as WTI oil moved above the $80 level.

Other commodity-related currencies are mostly flat today. NZD/USD is trading near the 0.6200 level, while AUD/USD has settled near 0.6700.

USD/JPY Is Heading Towards The Key 140 Level

USD/JPY gained upside momentum and managed to get above the 139.50 level. Today, USD/JPY traders focused on the Housing Starts report from Japan. The report indicated that Housing Starts declined by 1.8% year-over-year, compared to analyst consensus of -1.3%. The disappointing report served as a bearish catalyst for the yen.

For a look at all of today’s economic events, check out our economic calendar.

S&P 500 Is Under Pressure As Tech Stocks Are Moving Lower

Key Insights

  • The pullback in tech stocks is led by Apple, which is losing ground amid reports that protests in China hurt shipments of iPhone Pro. 
  • Energy stocks rebound as OPEC+ is reportedly ready to keep production at current levels. 
  • A move below the 20 EMA will push S&P 500 towards the support at 3920.

S&P 500 Settled Below The Support At 3960

S&P 500 declined towards the 3950 level as tech stocks remained under pressure. The tech-heavy NASDAQ Composite is down by 0.8% in today’s trading session.

Apple is down by 2% amid reports that iPhone Pro shipments may be lower than expected due to protests in China. Amazon  is also under pressure, and it looks that traders are concerned about the company’s performance in the fourth quarter.

Treasury yields are moving higher, which is bearish for growth stocks. The yield of 10-year Treasuries is trying to settle above the 3.75% level. In case this attempt is successful, it will move towards the 3.80% level, which will be bearish for S&P 500 and NASDAQ Composite.

Meanwhile, energy stocks rebound as WTI oil prices have settled above the $78 level. The rebound is led by Halliburton, APA Corporation, and Schlumberger.

From a big picture point of view, S&P 500 will not be able to develop sustainable upside momentum if leading tech stocks remain under pressure. In this light, traders should monitor the developments in Treasury markets as tech stocks are sensitive to changes in Treasury yields.

At this point, it looks that the yield of 10-year Treasuries may have found strong support in the 3.65% – 3.70% area, and traders must watch whether it will be able to gain momentum in the upcoming trading sessions.

S&P 500 Attempts To Settle Below The 20 EMA

S&P 500

S&P 500 managed to get below the support level at 3960 and is trying to settle below the 20 EMA at 3935. In case this attempt is successful, S&P 500 will move towards the next support level at 3920. A move below this level will open the way to the test of the support near the 50 EMA at 3885. If S&P 500 declines below the 50 EMA, it will head towards the support at 3860.

On the upside, the previous support at 3960 will serve as the first resistance level for S&P 500. A move above 3960 will push S&P 500 towards the resistance at 4000. If S&P 500 gets above 4000, it will head towards the next resistance at 4015.

For a look at all of today’s economic events, check out our economic calendar.

Russian Oil Price Cap May Be Set At Lower Levels

Key Insights

  • According to recent reports, EU countries discuss a $62 price cap for Russian oil. 
  • Poland and Baltic countries maintain pressure to push the price cap to lower levels. 
  • Russia reiterates it is willing to cut production to avoid selling oil to countries that participate in the price cap scheme. 

The Price Cap May Be Set At $62

Last week, EU countries failed to reach consensus on the price cap deal as Poland wanted to set an aggressive cap to cut Russia’s oil revenues.

This week, negotiations continued. According to the recent report, EU is discussing a price cap of $62 per barrel. According to the report, Poland and Baltic countries believe that this price is too high. This group wants to set the price cap as low as possible.

Previously, EU countries discussed a price cap of $65 – $70 per barrel. Greece, which has a strong shipping industry, wanted to set a high price cap to protect its business.

However, it looks that Poland has managed to put enough pressure on other members, and the potential price cap is moving lower.

EU countries are trying to set the price cap before the EU sanctions on Russian oil are implemented on December 5. Most likely, negotiations will intensify in the upcoming days, and the consensus will be reached despite current challenges.

Russia Reiterates It Will Not Sell Oil To Countries That Participate In The Price Cap Scheme

While EU countries are trying to set the price cap on Russian oil, Russia continues to signal that it will not supply oil to countries that participate in the price cap deal.

Russian Deputy Prime Minister Alexander Novak, who previously served as Energy Minister, has once again reiterated Russia’s position.

He said that Russia would not supply oil even if the price cap is high because the whole idea of the price cap is unacceptable. Russia’s options include selling oil to countries that have not set the price cap or cutting production.

The second option will be bullish for oil markets, which have been under pressure in recent weeks amid concerns about the slowdown of the world economy and COVID-related problems in China.

At this point, oil traders do not believe that the price cap will have a dramatic impact on Russian oil exports. However, the market’s view may change quickly after December 5.

For a look at all of today’s economic events, check out our economic calendar.

WTI Oil Pulls Back From Session Highs As OPEC+ May Keep Output At Current Levels

Key Insights

  • Recent reports about OPEC+ plans to keep production levels intact put pressure on oil markets. 
  • Natural gas is moving higher as traders stay focused on the potential rail strike. 
  • Precious metals rebound despite higher Treasury yields. 

WTI Oil Failed To Settle Above The $79 Level

WTI oil  moved back towards the $79 level as fears about Chinese lockdowns eased. It looks that protests in China are under control, which is also bullish for oil markets.

However, oil markets lost momentum after reports indicated that OPEC+ may keep its production policy unchanged at the next meeting.

WTI Oil

The nearest support level for WTI oil is located at $77.25. If oil settles back below this level, it will head towards the support at $76.75. A move below $76.75 will push WTI oil towards the support at $76.30.

On the upside, a move above the $78 level will push WTI oil towards the resistance level at $79.15. If WTI oil climbs above this level, it will head towards the psychologically important resistance at $80.

Natural Gas Keeps Moving Higher

Natural gas prices have moved towards the $7.35 level as the potential rail strike continued to provide support to the market.

The weather forecast remains unfavorable for higher natural gas consumption, but traders focus on the potential demand boost from the strike. The timing of the Freeport LNG restart remains uncertain, and the market will be extremely sensitive to any news on this front.

The nearest resistance level for natural gas is located at $7.55. In case natural gas climbs above this level, it will head towards the resistance at $7.80.

Gold Rebounds Despite Higher Treasury Yields

Gold managed to get above the $1750 level despite higher Treasury yields. From a big picture point of view, gold is stuck in the $1740 – $1760 range.

Meanwhile, silver moved back towards the resistance at $21.25. In case silver settles above this level, it will head towards the next resistance level at $21.60.

Platinum made an attempt to settle above the resistance at $1015, while palladium pulled back towards $1825 after an unsuccessful attempt to settle above the $1850 level.

Copper Rebounds As Traders Hope That China Will Gradually Relax Its Strict COVID Rules

Copper rebounded towards the $3.65 level as traders bet that recent protests in China would not put additional pressure on the economy. Copper bulls hope that China will slowly relax its zero-COVID policy, which will provide additional support to copper markets. It remains to be seen whether China is ready for any serious moves on this front in the near term.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Tests Resistance At 1.3550 As Canada’s Economy Is Slowing Down

Key Insights

  • USD/CAD is moving higher as traders bet that BoC will be more dovish to support the economy. 
  • EUR/USD moved below 1.0350 as Germany’s inflation has started to slow down. 
  • USD/JPY rebounded above the 138.50 level.

USD/CAD Rallied To New Highs After Canada’s GDP Reports

USD/CAD gained upside momentum after the release of Canada’s GDP reports. GDP Growth Rate report indicated that third-quarter GDP increased by 0.7% quarter-over-quarter, compared to analyst forecast of 0.4%. On an annualized basis, third-quarter GDP grew by 2.9%, compared to analyst consensus of 1.5%. Preliminary data showed that Canada’s GDP was flat in October.

USD/CAD

USD/CAD is currently trying to settle above the resistance at 1.3550. In case this attempt is successful, USD/CAD will move towards the next resistance level, which is located at 1.3570. A move above this level will open the way to the test of the resistance at 1.3600.

On the support side, the nearest support level for USD/CAD is located at 1.3500. If USD/CAD declines below this level, it will head towards the next support at 1.3470. A successful test of the support at 1.3470 will push USD/CAD towards the support at 1.3450.

Other commodity-related currencies are moving higher today as commodity markets rebound. AUD/USD made an attempt to settle above 0.6750, while NZD/USD tested the 0.6250 level.

U.S. Dollar Moved Away From Session Lows

U.S. Dollar Index managed to rebound from session lows and is currently trying to settle above the 106.70 level.

House Price Index declined from 11.9% in August to 11% in September, compared to analyst forecast of 10.5%.

Meanwhile, Treasury yields are moving higher, and the yield of 10-year Treasuries is trying to settle above the 3.75% level. In case this attempt is successful, the U.S. dollar will get more support.

EUR/USD Pulls Back As Germany’s Inflation Declined To 10% In November

EUR/USD faced resistance near 1.0400 and pulled back below the 1.0350 level. Today, EUR/USD traders focused on inflation data from Germany.

Germany’s Inflation Rate declined from 10.4% in October to 10% in November. The report served as a negative catalyst for the euro.

GBP/USD Tests Support At 1.1950

GBP/USD  declined towards the 1.1950 level as traders focused on the broad rebound of the U.S. dollar in today’s trading session.

If GBP/USD manages to settle below 1.1950, it will gain additional downside momentum and move towards the next support level, which is located at 1.1900.

USD/JPY Is Moving Towards The 139 Level

USD/JPY received support near the 138 level and is moving towards 139. Japan’s Unemployment Rate remained unchanged at 2.6% in October, compared to analyst consensus of 2.5%.

Japan’s Retail Sales increased by 4.3% year-over-year in October, while analysts expected that Retail Sales would grow by 4.8%.

In the near term, the general dynamics of the U.S. dollar will remain the key catalyst for USD/JPY as the ultra-dovish policy of the BoJ is not expected to change.

For a look at all of today’s economic events, check out our economic calendar.

S&P 500 Moves To Session Lows After Hawkish Comments From Fed Officials

Key Insights

  • Protests in China raised worries about additional supply chain disruptions. 
  • Hawkish comments from Fed’s Williams and Bullard put more pressure on S&P 500 and NASDAQ Composite. 
  • A move below 3960 will push S&P 500 towards the support at 3920.

Fed Speakers And Protests In China Hurt Market Sentiment

S&P 500 settled below the 4000 level as traders reacted to protests in China and hawkish comments from Fed officials.

China was shaken by protests after 10 people died in a fire in the Xinjiang province. Protesters believed that victims of the fire did not get timely help due to anti-coronavirus measures.

Markets fear that China’s zero-COVID policy and protests will put more pressure on the country’s economy and lead to additional supply chain issues. These fears pushed WTI oil towards yearly lows, although oil markets managed to rebound amid rumors about a potential production cut from OPEC+ on December 4.

Fed speakers put additional pressure on market sentiment. Fed’s Williams said that inflation remained too high and that unemployment rate may grow up to 5% at the end of 2023. He noted that Fed should continue to raise rates.

Williams has also said that the Fed may start to bring down interest rates in 2024, which was too hawkish for the market that hopes that Fed would start cutting rates in the second half of 2023.

Meanwhile, Fed’s Bullard said that markets were underestimating chances of higher interest rates. He noted that the rates should be raised to at least 5%.

Today’s pullback was led by tech stocks, which are sensitive to the changes in the market’s appetite for risk. Apple, Microsoft, and Meta were down by about 2% in today’s trading session.

S&P 500 Heads Towards The Support Level At 3960

S&P 500

S&P 500 is currently moving towards the support level at 3960. A move below this level will open the way to the test of the support at 3920. In case S&P 500 declines below 3920, it will head towards the next support at the 50 EMA at 3885.

On the upside, the previous support at 4000 will serve as the first resistance level for S&P 500. If S&P 500 manages to settle back above this level, it will head towards the next resistance level at 4015. A move above the resistance at 4015 will push S&P 500 towards the resistance at 4040.

For a look at all of today’s economic events, check out our economic calendar.

WTI Oil Gains Ground After Testing Yearly Lows

Key Insights

  • WTI oil received support near $73.60 and moved towards the $77 level. 
  • Gold pulled back below $1750.
  • Copper found itself under pressure as traders bet that protests in China would hurt the economy. 

WTI Oil Rebounds As Traders Bet On Aggressive Production Cuts From OPEC+

WTI oil  tested lows near the $73.60 level as traders reacted to the protests in China, which were driven by strict anti-coronavirus measures.

However, oil prices managed to gain upside momentum and moved back towards the $77 level amid rumors that OPEC+ may decide to cut production aggressively at the next meeting on December 4.

Meanwhile, EU countries failed to reach consensus on the Russian oil price cap deal. Negotiations continue, and it remains to be seen whether EU officials will be able to strike a deal before December 5, when the EU embargo on Russian oil would be implemented.

Natural Gas Continues To Trade Above The $7.00 Level

Natural gas  is trading above the $7.00 level as traders wait for additional catalysts. The weather forecast points to moderate natural gas consumption in the near term, but there is no sell-off in natural gas markets.

Some traders continue to exit their positions after the recent rally, but demand for natural gas remains strong. Most likely, the market will need significant catalysts to gain additional momentum and move out of the current trading range.

Silver Retreats As Dollar Rebounds

Silver found itself under strong pressure today and moved below the $21.00 level. The strong rebound of the U.S. dollar served as a bearish catalyst for silver markets.

Silver

If silver settles below the $21.00 level, it will get to the test of the next support at $20.80. A successful test of this level will open the way to the test of the support at $20.60. In case silver declines below $20.60, it will head towards the support at $20.40.

On the upside, silver needs to climb back above $21.00 to have a chance to gain upside momentum in the near term. The next resistance level for silver is located at $21.25. If silver moves above this level, it will head towards the resistance at $21.60.

Other precious metals are also moving lower today. Gold pulled back towards the $1745 level, while palladium declined towards $1825. Platinum is trading near the $1000 level.

Copper Is Under Pressure Amid Protests In China

Copper moved below the $3.60 level as traders reacted to the protests in China, which is the world’s main consumer of copper. If China maintains its zero-COVID policy or protests get out of control, its economy will get hurt and demand for copper will drop. The events in China will likely serve as the key catalyst for copper markets in the upcoming days.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Dollar Rebounds From Session Lows

Key Insights

  • U.S. dollar managed to gain upside momentum after testing new lows. 
  • Christine Lagarde said she believed that inflation had not peaked. 
  • USD/JPY moved back above the 138.50 level after testing new lows. 

U.S. Dollar Moves Away From Session Lows As Demand For Safe-Haven Assets Increases

U.S. dollar rebounded from session lows as traders were ready to buy the American currency near multi-month lows.

Currently, the U.S. Dollar Index is trying to settle above the 106 level. In case this attempt is successful, the U.S. Dollar Index will move towards the resistance at 106.40.

EUR/USD Pulls Back After An Unsuccessful Test Of The 1.0500 Level

EUR/USD faced resistance near the 1.0500 level and pulled back towards 1.0430. ECB President Christine Lagarde has recently said that she would be surprised if the Eurozone inflation peaked in October. This comment has not provided additional support to the European currency.

EUR/USD

The nearest resistance level for EUR/USD is located at 1.0440. In case EUR/USD manages to settle above this level, it will move towards the next resistance at 1.0480. A successful test of this level will open the way to the test of the resistance at 1.0500.

On the support side, EUR/USD needs to stay below 1.0440 to have a chance to gain downside momentum in the near term. The next support level for EUR/USD is located at 1.0400. In case EUR/USD declines below this level, it will move towards the support at 1.0360.

GBP/USD Faced Resistance Near 1.2100

GBP/USD  has recently made an attempt to settle above the 1.2100 level but lost momentum and pulled back towards the support at 1.2050.

Today, traders focused on the CBI Distributive Trades report, which declined from 18 in October to -19 in November, compared to analyst forecast of -7. The report highlighted the weakness in the retail sales segment.

USD/CAD Gains Ground As WTI Oil Tests New Lows

USD/CAD tried to settle above the resistance at 1.3470 as WTI oil tested new lows amid protests in China. The protests were triggered by strict COVID-related measures. Oil rebounded from session lows, and USD/CAD pulled back towards 1.3430.

Other commodity-related currencies have also found themselves under pressure today. AUD/USD declined towards the 0.6700, while NZD/USD pulled back towards 0.6200.

USD/JPY Moved Back Above The 138.50 Level

USD/JPY tested new lows at 137.50 but lost momentum and rebounded above the 138.50 level. The broad rebound of the U.S. dollar served as the key driver behind the move.

For a look at all of today’s economic events, check out our economic calendar.

Russian Oil May Be Selling At A Major Discount Ahead Of Price Cap

Key Insights

  • Bloomberg reports that Russia’s Urals price dropped to $52 per barrel ahead of the price cap. 
  • EU continues negotiations as Poland wants to set an aggressive price cap to cut Russia’s revenues. 
  • Oil traders do not believe that the price cap scheme will push too much oil out of the market. 

Does Bloomberg Russian Oil Price Data Reflect The Real Situation In The Market?

While EU continues negotiations on the Russian oil price cap, Russian oil may be selling well below the proposed $65 – $70 range.

According to Bloomberg, the price of Russia’s Urals fell to $52 per barrel at the country’s two western terminals. The price was based on the data provided by Argus Media Ltd. Bloomberg also added that Platts believed that Urals price stood at $52 on Thursday in Primorsk, a key Russian terminal in the Baltic sea.

Meanwhile, Neste estimates that Urals’ discount to Brent oil is $24.4, based on the five-days rolling average.

It is not clear whether Bloomberg’s data reflects the real situation as potential buyers may be unwilling to get into deals before they learn the final decision on the price cap. In addition, some buyers may be willing to use “gray” schemes to purchase Russian oil, hiding its origin.

EU Officials Will Try To Reach Consensus On The Russian Oil Price Cap Deal Today

Yesterday, Russian oil price cap negotiations were postponed as Poland insisted on aggressive limits for the price of Russian oil. At the same time, countries like Greece, which profits from shipping services, wanted to set the cap at the $70 level to avoid losing business.

EU officials do not have much time to get the deal done as the European sanctions on Russian oil will be imposed on December 5.

Judging by the recent price action in the oil markets, traders do not believe that the price cap will be aggressive enough to push Russian oil out of the market.

It should be noted that China’s problems with coronavirus have also impacted the market mood in recent days. If China’s oil demand declines, Russia will be forced to offer its oil at a bigger discount to keep Asian buyers interested, which will be bearish for oil markets.

For a look at all of today’s economic events, check out our economic calendar.

WTI Oil Faced Strong Resistance Near The $80 Level

Key Insights

  • WTI oil tried to rebound but lost momentum and pulled back. 
  • Natural gas traders wait for additional catalysts. 
  • Copper remains stuck in the $3.60 – $3.65 range. 

WTI Oil Declined Below $78

WTI oil made an attempt to settle above the $80 level but lost momentum and pulled back below $78. Traders continue to wait for the news on the Russian oil price cap scheme. Yesterday, negotiations were postponed as Poland insisted on a $30 level, while other countries wanted to set the cap above the $65 level.

WTI Oil

In case WTI oil settles below the $78 level, it will move towards the support at $77.25. A successful test of this level will open the way to the test of the support at $76.75. In case WTI oil declines below $76.75, it will head towards the next support level at $76.30.

On the upside, WTI oil needs to settle back above $78 to have a chance to gain upside momentum in the near term. The next resistance level for WTI oil is located at $79.15. A move above $79.15 will push WTI oil towards the resistance at $80.00.

Natural Gas Is Mostly Flat

Natural gas markets are mostly flat as traders wait for additional catalysts. Trading activity will be low today as many traders have left for a long weekend and will get back to work on Monday.

In Europe, prices have started to move higher as traders expect that weather will become colder in early December. It remains to be seen whether the developments in the European markets will have any material impact on the U.S. markets in the near term as the restart of Freeport LNG has been delayed.

Gold Retreats As Dollar Rebounds

Gold pulled back towards the $1750 level as the U.S. dollar rebounded against a broad basket of currencies. Treasury yields moved higher, which was also bearish for gold.

Other precious metals have also found themselves under pressure in today’s trading session. Silver settled back below the $21.50 level. Platinum declined below $1000, while palladium moved towards the $1800 level.

Copper Needs Additional Catalysts To Move Higher

Copper  has recently made another attempt to settle above the $3.65 level but lost momentum and pulled back towards $3.62. Strict anti-coronavirus measures in China continue to serve as a significant negative catalyst for copper markets.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Dollar Gains Ground As Treasury Yields Rebound

Key Insights

  • U.S. dollar rebounds after the recent pullback. 
  • EUR/USD pulls back despite better-than-expected GDP report from Germany. 
  • USD/JPY managed to settle back above the 139 level.

U.S. Dollar Moves Higher Ahead Of The Weekend

U.S. Dollar Index managed to get back above the 106 level as traders rushed to buy the U.S. dollar after the recent pullback.

There are no important economic reports scheduled to be released in the U.S. today, so traders will focus on general market sentiment.

Treasury yields have moved higher today as the probability of a 50 bps rate hike at the next Fed meeting declined to 71.1%. This move served as a bullish catalyst for the U.S. dollar.

EUR/USD Settled Below 1.0400

EUR/USD declined below the 1.0400 level as traders took profits after the recent rally.

Today, traders focused on the economic data from Germany. The final reading of the third-quarter GDP Growth Rate report indicated that Germany’s GDP increased by 0.4% quarter-over-quarter, compared to analyst consensus of 0.3%.

Consumer Confidence improved from -41.9 in November to -40.2 in December, compared to analyst consensus of -39.6. The better-than-expected GDP Growth Rate report failed to provide enough support to the euro as traders focused on profit-taking ahead of the weekend.

GBP/USD Pulls Back As Traders Take Some Profits Off The Table

GBP/USD pulled back below the 1.2100 level as traders failed to find sufficient catalysts to continue the rebound.

From a big picture point of view, it looks that Rishi Sunak managed to calm markets. GBP/USD has already returned to August levels.

USD/CAD Rebounds After Pullback

USD/CAD managed to gain upside momentum as traders focused on the general strength of the U.S. dollar.

GBP/USD

Currently, USD/CAD is trying to settle above the 1.3400 level. In case this attempt is successful, USD/CAD will move towards the next resistance, which is located near the 50 EMA at 1.3450. A move above 1.3450 will open the way to the test of the resistance at 1.3470.

On the support side, the nearest support level for USD/CAD is located at 1.3360. If USD/CAD declines below this level, it will move towards the next support level at 1.3300. A successful test of the support at 1.3300 will open the way to the test of the support at 1.3230. No important levels have been formed between 1.3230 and 1.3300, so this move may be fast.

Other commodity-related currencies are also under pressure today. AUD/USD declined below 0.6750, while NZD/USD settled below 0.6250.

USD/JPY Settled Back Above The 139 Level

USD/JPY received support near the 138 level and rebounded towards 139.50. The broad rebound of the U.S. dollar served as the main catalyst for the move. In case USD/JPY manages to settle above 139.50, it will move towards the psychologically important 140 level.

For a look at all of today’s economic events, check out our economic calendar.

S&P 500 Looks Ready To Settle Above The 4040 Level

Key Insights

  • U.S. markets are closed, but traders will return tomorrow for a short trading session. 
  • From a big picture point of view, S&P 500 continues to rebound after an unsuccessful test of the 3500 level, which marked the yearly bottom. 
  • A move above the 4040 level will provide S&P 500 with an opportunity to gain additional upside momentum. 

S&P 500 Will Remain Extremely Sensitive To The Interest Rate Outlook

U.S. markets are closed today for the Thanksgiving holiday. Traders will return tomorrow to focus on the first results of Black Friday in the short trading session.

Traders will also stay focused on the interest rate outlook, which has changed after the release of dovish FOMC Minutes. Currently, the FedWatch Tool indicates that there is a 75.8% probability of a 50 bps rate hike at the next Fed meeting in December.

Markets expect that the target rate would peak at 500 – 525 bps in summer 2023, and that the Fed would begin to cut interest rates from September 2023. Any changes in the “peak rate” outlook will have a significant impact on S&P 500.

Tomorrow, traders will focus on retailer stocks. Trading in this market segment will likely be volatile in the first hours of the trading session. Traders should keep in mind that trading volume will remain low as many market participants have left for a long weekend and will get back to their desks on Monday.

S&P 500 Must Settle Above 4040 To Continue Its Rebound

S&P 500

Taking a look at the weekly chart, S&P 500 continues to rebound after an unsuccessful test of the 3500 level. S&P 500 has already gained more than 15% from October lows, so some traders may want to take profits off the table.

At the same time, S&P 500 looks ready to settle above the nearest resistance level at 4040 and continue the rebound. If Treasury yields move lower and the U.S. dollar continues to lose ground against a broad basket of currencies, S&P 500 will have a good chance to develop additional upside momentum.

For a look at all of today’s economic events, check out our economic calendar.

Russian Oil Price Cap Negotiations Are Postponed

Key Insights

  • Recent reports indicate that EU countries are stuck in negotiations over the Russian oil price cap. 
  • Poland wants to cut Moscow’s revenues and set the price cap at $30 per barrel. 
  • Most other EU countries want to ensure that Russian oil does not go away from the market. 

Why Russian Oil Price Cap Negotiations Are Stuck?

Oil traders continue to wait for the news about the Russian oil price cap. Yesterday, WTI oil found itself under significant pressure as reports indicated that the price cap would be set in the $65 – $70 range.

Today’s reports show that EU countries failed to reach consensus on the oil price cap scheme, and negotiations were delayed until Friday.

While the majority of the European countries would be happy with the price cap of $65 per barrel, Poland believes that this cap is too generous to Moscow. According to recent reports, Poland should have the support of Estonia, Latvia, and Lithuania.

Meanwhile, Greece wants to set the price cap at $70 or higher as it wants to protect its oil shipping industry. Cyprus and Malta may also support Greece.

Currently, Russia’s Urals oil is sold at a $25 discount to Brent oil. If the price cap is set at $70, Russia may continue to sell its oil as usual, which will be bearish for oil markets.

When Will The Price Cap Be Announced?

At this point, it looks that negotiations will continue on Friday. As Poland reportedly wants to set the price cap at just $30 per barrel, reaching consensus on the deal may take more than one day.

The $30 price cap, which has not been discussed by most countries, will certainly push a significant amount of Russian oil out of the market, as Russia would not supply oil at this price.

It remains to be seen whether Poland will try to defend its proposal as other countries are trying to keep Russian oil flowing, which means that the price cap must be set at a “reasonable” level.

Russia said that it would not supply oil to countries that participate in the price cap scheme, but a “generous” price cap will provide all market participants with an opportunity to strike deals while maintaining their harsh public rhetoric.

It should be noted that EU countries do not have too much time for negotiations as the price cap mechanism should be announced before December 5.

For a look at all of today’s economic events, check out our economic calendar.

Silver Tests Resistance At $21.60

Key Insights

  • Weaker dollar provided some support to precious metals in today’s trading session. 
  • WTI oil continued to trade near the $77.50 level as traders waited for the news on the Russian oil price cap. 
  • Natural gas made an attempt to settle below the support at $7.20.

Silver Tries To Continue Its Rebound

Silver  has recently made an attempt to settle above $21.60 but lost momentum and pulled back towards the $21.50 level. Weaker dollar provided support to silver in today’s trading session, but it looks that some traders decided to take profits off the table after the recent rebound.

Silver

The nearest resistance level for silver is located at $21.60. In case silver settles above this level, it will move towards the next resistance level at $21.80. A successful test of the resistance at $21.80 will open the way to the test of the resistance at $22.00.

On the support side, the nearest support for silver is located at $21.25. In case silver declines below this level, it will head towards the next support at $21.00. A move below the support at $21.00 will push silver towards the support level near the 20 EMA at $20.80.

Meanwhile, gold managed to gain some upside momentum and moved closer to the $1760 level. Platinum pulled back towards $1000, while palladium made an attempt to settle above $1900.

WTI Oil Is Mostly Flat As Traders Wait For News

WTI oil remains stuck near the $77.50 level as traders are waiting for the news about the Russian oil price cap.

Interestingly, rising coronavirus cases in China did not put additional pressure on the oil markets. In the near term, the Russian oil price cap story will remain the key driver for oil prices.

Natural Gas Tested Support At $7.20

Natural gas has recently made an attempt to settle below the support at $7.20 as traders took profits after the recent rally.

However, natural gas markets failed to develop additional downside momentum as rail strike fears provided some support to natural gas prices.

Most likely, natural gas markets will remain volatile in the upcoming trading sessions as traders will react to the developments in the rail strike story.

Copper Tried To Settle Above $3.65

Copper made an attempt to settle above the $3.65 level despite worries about the situation with coronavirus in China. Traders should keep in mind that trading volume will be low due to the holiday in the U.S., so it remains to be seen whether copper markets will be able to gain sufficient upside momentum to move above the $3.65 level.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Tests New Highs As Rally Continues

Key Insights

  • U.S. dollar continues to move lower as traders believe that the Fed would slow the pace of rate hikes. 
  • USD/JPY gained strong downside momentum and moved towards the 138 level. 
  • Commodity-related currencies enjoy support in today’s trading session. 

U.S. Dollar Remains Under Pressure

U.S. Dollar Index  remains under pressure as traders stay focused on the recent FOMC Minutes, which indicated that the Fed is leaning towards a “moderate” 50 bps rate hike at the next Fed meeting.

There are no economic reports scheduled to be released in the U.S. today, so traders will focus on general market sentiment. Currently, the U.S. Dollar Index is trying to settle below the 105.70 level. In case this attempt is successful, the U.S. Dollar Index will gain additional downside momentum and move towards the 105.50 level.

EUR/USD Settled Above The 1.0400 Level

EUR/USD managed to get above the 1.0400 level and is trying to gain additional upside momentum.

Today, EUR/USD traders focused on the Ifo Business Climate report from Germany. The report indicated that Germany’s Business Climate improved from 84.5 in October to 86.3 in November, compared to analyst consensus of 85.

It should be noted that Germany’s business sentiment remains at extremely low levels, but the market is ready to interpret any improvement as a bullish catalyst for the European currency.

GBP/USD Tested New Highs

GBP/USD continues to move higher as traders react to the dovish FOMC Minutes.

GBP/USD

Currently, GBP/USD is trying to settle above the resistance at 1.2130. RSI is close to the overbought territory, but there is enough room to gain additional upside momentum in case the right catalysts emerge. If GBP/USD settles above 1.2130, it will move towards the next resistance level at 1.2150. A successful test of this level will push GBP/USD towards the resistance at 1.2185.

On the support side, the nearest support level for GBP/USD is located at 1.2100. A move below this level will open the way to the test of the support at 1.2080. If GBP/USD declines below 1.2080, it will head towards the next support at 1.2050.

Commodity-Related Currencies Continue To Rebound

FOMC Minutes provided material support to commodity-related currencies, which continued to move higher.

AUD/USD managed to settle above the 0.6750 level, while NZD/USD moved above 0.6250. USD/CAD declined towards 1.3325.

USD/JPY Retreats Despite Disappointing PMI Data From Japan

USD/JPY declined towards 138.20 as the strong pullback continued. Today, USD/JPY traders had a chance to take a look at the flash Manufacturing PMI report from Japan.

The report indicated that Japan’s Manufacturing PMI declined from 50.7 in October to 49.4 in November, compared to analyst consensus of 50.8. Numbers below 50 show contraction.

While the report indicated that Japan’s economy was slowing down, the Japanese yen gained ground against the U.S. dollar as traders focused on the potential shift in Fed’s rhetoric after the release of the FOMC Minutes.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Pulls Back As Traders Take Profits After The Recent Rally

Key Insights

  • Traders decided to take some profits off the table after the recent rally.
  • The recent EIA report served as an additional negative catalyst for natural gas markets.  
  • In case natural gas settles below the support at $7.20, it will move towards the next support level at $6.90.

Natural Gas Retreats Amid Profit-Taking

Natural gas is losing ground as traders take profits after the recent rally, which was driven by fears of the U.S. rail strike.

The recent EIA Weekly Natural Gas Storage Report indicated that working gas in storage declined by 80 Bcf from the previous week. Analysts expected that it would decrease by 87 Bcf. Currently, total working gas is within the five-year historical range.

The weather forecast is not favorable for high natural gas consumption, but the market will likely stay focused on the potential rail strike, which may disrupt coal shipments and boost demand for natural gas.

Traders will also keep an eye on the fate of the Freeport LNG restart. Previously, Freeport LNG was expected to restart operations in late November. However, the restart was postponed to mid-December. The restart of Freeport LNG will be bullish for the U.S. natural gas markets.

Natural Gas Tests Support At $7.20

Natural Gas

Currently, natural gas is trying to settle below the support level at $7.20. In case this attempt is successful, natural gas will move towards the next support, which is located at $6.90. A move below $6.90 will open the way to the test of the support at $6.75. If natural gas manages to settle below $6.75, it will head towards the next support level at $6.40.

On the upside, natural gas needs to settle back above $7.20 to have a chance to gain upside momentum in the near term. The next resistance level for natural gas is located near the recent highs at $7.55. If natural gas manages to settle above this level, it will move towards the resistance at $7.80. A successful test of the resistance at $7.80 will open the way to the test of the next resistance level at $8.10.

For a look at all of today’s economic events, check out our economic calendar.

Gold Moves Above $1750 As Dollar Pulls Back

Key Insights

  • Gold continues to rebound as the U.S. dollar remains under pressure against a broad basket of currencies. 
  • Yesterday’s FOMC Minutes signaled that the Fed would slow the pace of rate hikes, which was bullish for precious metals. 
  • A successful test of the resistance at $1750 will open the way to the test of the next resistance level at $1765.

Weaker Dollar Provides Support To Gold Markets

Gold is currently trying to settle above the resistance at $1750 as the U.S. dollar remains under pressure.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, settled below the 106 level and moved towards 105.70 as traders reacted to the dovish FOMC Minutes.

The FedWatch Tool indicates that there is a 75.8% probability of a 50 bps rate hike at the next meeting. The market prepares for a slowdown in the pace of rate hikes, which is bearish for dollar and bullish for precious metals.

In the near term, gold traders will stay focused on the dynamics of the American currency. The U.S. Dollar Index is currently moving towards multi-month lows at 105.35. In case the U.S. Dollar Index settles below this level, it will gain additional downside momentum, which will provide more support to gold prices.

Gold Tries To Settle Above The $1750 Level

Gold

Gold has recently managed to get above the resistance at $1750 and is trying to gain additional upside momentum. RSI is in the moderate territory, and there is plenty of room to gain momentum in case the right catalysts emerge.

The nearest resistance level for gold is located at $1765. If gold settles above this level, it will head towards the next resistance, which is located at $1775. A successful test of the resistance at $1775 will open the way to the test of the next resistance at $1785.

On the support side, the previous resistance at $1750 will likely serve as the first support level for gold. If gold declines below this level, it will move towards the next support near the 20 EMA at $1730. A move below $1730 will push gold towards the support level at $1715.

For a look at all of today’s economic events, check out our economic calendar.