Currency and Technical Analysis (1-Hour Chart) – November 18, 2024
USD/JPY: Strong Sell
EUR/USD: Buy
AUD/USD: Strong Sell
NZD/USD: Sell
GBP/USD: Sell
XAU/USD: Strong Buy
U.S. Market
The U.S. dollar (USD) is trending weaker against the Euro (EUR), British pound (GBP), and Japanese yen (JPY).
Federal Reserve Chairman Jerome Powell’s statements have been under close watch, as he expressed caution about further monetary easing, despite stable economic growth and a strong labor market. Additionally, the October Consumer Price Index (CPI) rose from 2.4% to 2.6% year-on-year, and the Producer Price Index (PPI) increased from 1.9% to 2.4%, which heightens the likelihood of the Fed refraining from a rate cut in December and slowing down rate cuts next year. Retail sales for October showed a decrease from 0.8% to 0.4%, although it exceeded market expectations of 0.3%.
Eurozone
The Euro (EUR) is stronger against the U.S. dollar (USD) and the British pound (GBP), but weaker against the Japanese yen (JPY).
In October, Germany’s Wholesale Price Index improved from a monthly decline of -0.3% to an increase of 0.1%, and the year-on-year change improved from -1.6% to -0.8%. However, this is unlikely to affect the ECB’s accommodative monetary policy stance. In today’s ECB meeting minutes, concerns were raised about inflation remaining below the target of 2.0%, with some officials suggesting the need for further rate cuts. Additionally, concerns over the new U.S. administration imposing additional tariffs on Europe remain a risk.
United Kingdom
The British pound (GBP) is stronger against the Japanese yen (JPY), but weaker against the U.S. dollar (USD) and mixed against the Euro (EUR).
The third-quarter GDP flash estimate showed mixed results: +0.1% on a quarterly basis (forecasted +0.2%), and +1.0% year-on-year (forecasted +0.1%). However, the September industrial production data came in at -0.5% month-on-month (forecasted +0.1%) and -1.8% year-on-year (forecasted -1.2%), indicating weak performance. This increases the likelihood that the Bank of England (BoE) will accelerate its monetary easing, though some officials remain cautious.
Japan
The Japanese yen (JPY) is stronger against the Euro (EUR), British pound (GBP), and U.S. dollar (USD).
The third-quarter GDP flash estimate shows a slowdown in growth, with a quarterly increase of +0.2% (from +0.7%) and year-on-year growth slowing from +2.9% to +0.9%. On the other hand, September’s industrial production increased by 1.6%, exceeding market expectations. Concerns are growing over the impact of China’s slowdown and U.S. tariff policies on Japan’s economy. Therefore, the Bank of Japan (BoJ) is expected to refrain from raising interest rates in the short term, which may result in continued yen depreciation.
Australia
The Australian dollar (AUD) is weaker against the yen (JPY) and the Euro (EUR), but stronger against the U.S. dollar (USD) and British pound (GBP).
Economists from National Australia Bank (NAB) revised the start date for the Reserve Bank of Australia (RBA) to begin easing monetary policy to between February and May 2024. This is due to a strong labor market and risks of accelerating inflation.
Crude Oil
Crude oil prices are showing a downward trend, influenced by multiple factors.
China’s industrial production came in at 5.3% year-on-year (below the forecast of 5.5%), and the country’s domestic oil refinery output decreased by 4.6%. On the other hand, U.S. Energy Information Administration (EIA) weekly inventory data showed a 2.089 million barrel increase in crude oil inventories, but a 4.407 million barrel decline in gasoline stocks and a 1.394 million barrel decrease in distillate fuel stocks, helping to mitigate price declines.
