Overnight, we have the last major economic data from New Zealand and Australia for the year. After that, we can expect their pairs to slip into vacation mode for the next couple of weeks.
It seems that the two countries whose currencies usually move in tandem because of their similarity, are seeing a divergence in their economic numbers.
The expectations for later today and early tomorrow reflect this. There’s a consensus that New Zealand data will be worse than before, while Australian data will show an improvement.
Let’s go over what that means for the markets.
New Zealand’s (slow) Economic Growth
We have two bits of data coming out at the same time that routinely affect the currency. However, the one that’s likely to get most of the attention is quarterly GDP.
Expectations are for the economy to have grown by 0.4% in the third quarter, a slowing of the pace from 0.5% prior. On an annualized basis, that would just barely keep the same rate of growth at just 2.1%.
This would, again, be the worst performance since late 2013, with expectations of continuing slowdown in the services sector. Services are generally internally oriented, and depend on the domestic market.
Primary activities, which are a majority for export and depend on the global situation, have been improving. Projections are for them to continue to do so, albeit, not enough to overcome the weakness in the services sector.
The Markets
There are dueling views on how much the economy has expanded. So, the consensus survey is a bit shaky.
The more optimistic analysts point to the better than expected performance in retail sales. They also point to rising tourism numbers (New Zealand, in part, benefitting from the commotion in Chile, another favorite southern hemisphere destination).
Without a firm consensus, the market isn’t pricing in expectations. Therefore, we could get a stronger reaction than usual if the data comes in a few decimals away from the average.
Australia’s Employment Situation
Last time around, the jobs report from Australia was surprisingly negative. The expectation is that there will be a substantial recovery this time around.
The RBA is increasingly focusing on maintaining job growth as a means of supporting currency stability so the market has a stronger reaction to employment data.
The consensus is for Australia to have added 31.2K jobs during November. This would be a substantial increase from the unusually low -19K during October (which could also be revised higher).
Expectations are for the unemployment rate to stay at 5.3% as a consequence of the increasing participation rate. Despite. or because of, the general weakness in the economy, increasingly more Australians are moving into the workforce.
This week will see the continuation of central bank meetings, with the Bank of Japan and the Bank of England meetings on the docket.
The meetings come at a time when some of the global risks are starting to show signs of progress.
The trade deal and the UK Brexit issues were the two biggest concerns. However, with reports suggesting that a deal has been made, investors and economists are likely to be a bit more relaxed.
Both central banks will most likely refrain from making any changes to the respective interest rates. This would keep these meetings consistent with other central bank meetings in the past week.
The Federal Reserve and the ECB both maintained their respective policies unchanged. There was also not much of a deviation from the forward statements either. Thus, it wouldn’t be surprising to see any changes from the BoJ or the BoE this week.
Here’s a quick preview of what to expect from the respective central bank meetings.
Bank of Japan to Hold the Ship Steady
At the outset, the Bank of Japan is not expected to make any changes. However, given the central bank’s propensity to spring a surprise, there is a probability.
For the moment, central bank officials will likely give some time for the fiscal spending to impact the economy. Expectations show that policymakers will stay on the sidelines ahead of the spending plans due to roll out next year.
BoJ Rates
Global risks are showing positive signs. The concerns of trade wars will likely fall. But questions remain on whether this will really have much of an impact on the domestic economy in Japan.
Recent data indicates that domestic growth is sluggish. The latest Tankan Survey was disappointing. Following the global financial crisis, the Tankan Surveys have been some of the worst-performing. This suggests that business sentiment remains weak in Japan.
But the October BoJ report expects that demand will rise over the coming months.
Overall, the BoJ meeting will not be a major market-moving event.
Bank of England Could Turn Dovish
Although the Bank of England will also stay on the sidelines, the odds of a dovish outlook now rises.
This comes with at least part of the Brexit uncertainty receding. Investors are assigning a 50% probability for a rate cut in March 2020.
If Boris Johnson’s plans of leaving the EU, end of January remains on track, then we anticipate that focus will shift to the economic data.
BoE Rates
There is already evidence from the United Kingdom that the economy is still not out of the woods. Growth has been hit largely due to the Brexit uncertainty. Therefore, a premature move (hawkish) from the BoE could be the straw that breaks the camel’s back.
It will be interesting to see if there will be a shift in the BoE’s language. Another factor to watch out for is the number of dissenting voters.
The December BoE meeting will also be the penultimate meeting chaired by Mark Carney. Carney is set to leave the Bank of England end of January next year.
The Federal Reserve left its benchmark interest rate unchanged as expected last week. However, Fed Chairman Jerome Powell made news with some of his most dovish remarks to date – stating flatly that he won’t hike rates again until inflation moves up significantly.
“In order to move rates up, I would want to see inflation that’s persistent and that’s significant,” Powell said at a news conference following the Fed’s announcement.
He would be anticipating “a significant move up in inflation that’s also persistent before raising rates to address inflation concerns.”
He could get his wish in the months ahead as monetary policy, fiscal policy, and the economy all seem to be lining up to push the inflation rate higher. In 2020, inflation may become a front-page problem for the first time in many years.
The government’s release of a blockbuster jobs report this month diminishes the odds of the economy falling into a recession next year. At the same time, it increases the likelihood of inflation rates rising.
It’s not that the economy is at risk of “overheating.” Overall GDP growth is likely to come in moderate at best next year.
Rather, the economy is merely showing signs of sustaining its expansion at a time when fiscal and monetary policy are extremely stimulative.
The U.S. government is now running trillion-dollar budget deficits for the first time since the aftermath of the 2008 financial crisis. It will effectively pump $1 trillion worth of artificial demand back into the economy in 2020.
Needless to say, there is no will or way in Washington to cut spending or raise taxes in an election year.
At the same time, the Fed is holding its benchmark short-term interest rate at 1.50%-1.75%, which is a negative real rate.
Explains Barron’s columnist Randall W. Forsyth, “The fed-funds rate is actually below zero in real terms, that is, after factoring in inflation. Negative real rates usually are imposed to spur spending and investment to stimulate an economy in recession, which is far from the present state.”
Inflation as measured by the Consumer Price Index is running at 2.1% annually according to the latest data reported by the Bureau of Labor Statistics on Wednesday. Consumer prices have climbed more than expected this fall on rising energy costs.
But it’s still not enough inflation for the Fed’s liking!
The central bank’s preferred inflation gauge is the core Personal Consumption Expenditures index, which is running only at an estimated 1.5% year-on-year. Jerome Powell and company want to push it to 2%…and above, on a “persistent” basis, before tightening monetary policy.
Let’s not forget (like some in the financial media apparently have) that the Fed is also pursuing a massive balance sheet expansion. Even though policymakers refuse to call it QE, the monthly liquidity injections and T-bill purchases are of similar magnitude as previous rounds of Quantitative Easing.
In fact, since “not QE” was announced in September (and subsequently expanded), the Fed’s balance sheet has been growing at a 28% rate. The money supply itself is expanding at an 11% clip.
All this stimulus will have consequences, and they won’t just show up in the form of higher stock prices. Although the stock market seems poised to continue advancing, higher commodity and consumer prices could begin to spread through the economy as well.
Though long depressed, crude oil prices have started to trend higher in recent months.
Copper and precious metals prices are also showing some strength and could be on the verge of major breakouts heading into year end.
When Americans think of nasty inflation, they tend to recall the late 1970s stagflation. It coincided with spikes in gold and silver markets.
The inflation monster wasn’t finally tamed until Fed chairman Paul Volcker stepped in and jacked up interest rates to double-digit levels, triggering a recession. Volcker’s decision wasn’t popular on Wall Street or in Washington, but it did restore confidence in the dollar and set the stage for the expansions of the 80s and 90s.
The current crop of central bankers is too cowardly, too beholden to bankers and politicians, to do what Volcker did. He passed away this month and will be remembered as an inflation hawk.
But today, the doves are in charge at the Fed – and they bound and determined to create a new inflation cycle.
The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.
According to the stress tests carried out by the Bank of England this week, the UK banking sector is “resilient” enough to withstand even a worst-case “no-deal” Brexit scenario.
Worst Case Scenario
Each of the UK’s main banks underwent their yearly “stress tests” this week, designed to illuminate any weaknesses within the financial system. As part of the tests, analysts measured how the banking sector could withstand the worst of financial shocks.
The most extreme scenario used was one that far surpasses the current predictions for the fallout from a “no-deal” Brexit.
In the conditions used, the UK would crash out of the EU without a deal, sending GDP lower by 4.7%. Meanwhile, interest rates would climb 4%, with the unemployment rate rocketing up to 9.2%.
This constitutes the most severe “stress test” conducted over recent years.
All Banks Pass BOE Stress Tests
However, investors will be pleased to know that each of the UK’s leading banks survived the tests. But, the tests did reveal that Barclays and Lloyd’s would need to trigger their emergency debt-to-equity conversions as a result of changes to accountancy due to take place in 2023.
That being said, in total, the capital ratios of the main banks combined was still over 200% more than they were after the financial crisis in 2008.
Following the tests, the BOE recommended that each of the banks involved increase its capital buffers by 1%.
Financial Stability Report Cites Brexit Risks
Along with the stress test results, the BOE also released its financial stability report.
In it, the BOE noted:
“Against a backdrop of Brexit-related uncertainty, growth has slowed and international investor demand for assets, notably commercial real estate, has fallen.”
BOE To Keep Rates on Hold Despite Dovish Risks
This assessment from the bank comes ahead of the final Monetary Policy Meeting of the year due on Thursday. Despite the concern for the economy, we aren’t expecting the BOE to cut rates at this point.
At the November meeting, two of the BOE’s policy-makers voted in favor of rate cuts. This marked the first support for such a move since the 2016 rate cut.
However, the Conservative party has now won a majority in parliament. And Johnson will probably be getting the backing he needs for his deal on Friday. So, it seems likely that the UK will leave the EU by the planned date of January 31st.
This greater level of clarity has been welcomed by traders. The BOE, as such, is likely to keep its powder dry at this point. This is particularly true given that there is a growing risk later into 2020, following news that the PM will add a clause to Friday’s bill to block parliament from extending the December 31st deadline for the Brexit transitional phase.
The bill means that the UK will leave the single market on that date regardless of whether the UK and EU have agreed on a trade deal.
Technical Perspective
EURGBP found support at a test of the .8317 level this week and is currently retesting the broken .8477 support. If price moves back above here, focus will shift to a retest of the .8659 level, where e also have the bearish trend line from year to date highs. To the downside, the main level to watch is the .8317 region.
The US dollar continues to hold steady amid a quiet few days. Economic data from the US was confined to the building permits report.
US building permits rose by 1.48 million, while housing starts grew by 1.37 million. Both the numbers were higher than the forecasts.
Industrial production was up 1.1% in November, recovering from a 0.9% slump in the month before.
Euro Trades Mixed on Trade Balance Figures
The euro was trading flat amid a quiet day. Economic data was limited to the trade balance figures for October.
Official data showed that the euro area posted a surplus of 28 billion euro. On a seasonally adjusted basis, the trade balance was 24.5 billion, marking an increase from 18.7 billion in September.
EURUSD to Consolidate in the Short Term
The currency pair is quite likely to remain range-bound within the current levels of 1.1177 and 1.1131. Unless there is a breakout from this level we do not expect to see prices heading anywhere.
The bias remains mixed especially considering the holiday week coming up.
Sterling Slips on Hard-Brexit Concerns
The pound sterling was down by over one and half percent on Tuesday. The declines came on concerns on a hard-Brexit. PM Johnson said that the post-Brexit standstill period would remain until end of next year.
This means that the UK will leave the EU regardless of a Brexit deal by end of next year. Johnson is expected to table the bill in the UK parliament this week.
GBPUSD on Track to Test the Support
The currency pair’s current declines will likely see a drop to the lower support area at 1.3100. This would push the pair back to the pre-election lows, just before it surged.
The price level at 1.3226 will be key in the short term. If this level acts as resistance, then we anticipate further declines.
Gold Holds Steady Amid Lack of Fundamentals
The precious metal was trading mixed on Tuesday. A lack of any major fundamentals over the day saw prices in check. Investors await for key central bank meetings later this week, which includes the Bank of Japan and the Bank of England.
XAUUSD Maintains Consolidation
XAUUSD continues to trade flat within the 1483 and 1462 levels. There is the potential that prices are forming a base currently. However, gold needs to break out from this range to ascertain its direction. The bias remains to the upside as long as the minor rising trend line holds.
The US dollar continues a week of lackluster trading over the European session so far on Wednesday. Price has remained relatively muted, still sitting at the bottom of last week’s decline for now.
With little in the way of noteworthy US data, light flows are likely to continue. However, US-China trade deal headlines have the potential to cause volatility. USD index trades 96.85 last.
EUR Data Beats
EURUSD was initially higher at the European open today, though has since given back most of the gains to come back to trading around flat on the day. The German Ifo business climate reading came in a little better than expected today.
However, in light of the recent weight of data weakness, it was unable to provide much support. EURUSD trades 1.1132 last, continuing to move away from the week’s highs.
CPI Higher – BOE In Focus Tomorrow
GBPUSD has had a quiet start to the day too, with price still sitting at the bottom of recent lows, trading 1.3111 last. On the data front, November CPI released today was seen higher at 1.5% vs 1.4% expected.
The BOE holds its final MPC of the year tomorrow. While no rate cut is likely, the bank’s outlook is likely to remain tilted to the downside as Brexit uncertainty continues.
The UK parliament is due to vote on Johnson’s Brexit deal this Friday which will now include a provision to stop the transition phase deadline from being extended.
SPX500 Rallying Again
Risk assets continue to move higher today with the SPX500 trading 3193.13 last. The US-China trade deal is currently under legal review before being officially signed. The US Trade Secretary has confirmed that the deal is “totally done”, keeping risk appetite support into the middle of the week.
JPY Lower, Gold Higher
Safe havens have had another mixed day so far with the Japanese yen a little lower against USD while gold has been a little firmer. JPY remains under pressure as a result of the continued rally in equities while gold has benefitted from the sell-off in USD over the last week.
USDJPY trades 109.43 last, continuing to move away from the week’s highs. XAUUSD trades 1478.96 last, turning back up towards the highs of the week.
Bearish API Report Weighs – EIA Next
Oil prices have come back under pressure over the last 24 hours following a bearish report from the API yesterday which noted an unexpected build in US crude stores last week.
Traders are now waiting on the headline EIA report later today which could add further pressure if a similar build is reported. Crude trades 60.29 last, still holding above the 60 level for now.
Crude Still Helping CAD
USDCAD has been a little lower again today, despite the weakness in crude prices. Looking beyond the reported increase in US crude stores, the outlook is positive for crude now. This is on the back of the US-China trade deal.
Higher prices will help boost CAD in the medium term. USDCAD trades 1.3160 last, still above the 1.3145 level for now.
AUD Data On Watch
AUDUSD has posted a mild recovery over the middle session of the week so far, recovering off the week’s lows to trade .6851 last.
A dovish set of RBA meeting minutes earlier in the week put the pair under pressure though downside has stalled for now. AUD unemployment data due overnight tonight will be the key domestic data focus, expected to remain unchanged at 5.3%
Maurice Jackson of Proven and Probable speaks with Dr. John-Mark Staude, CEO of Riverside Resources, about his company’s recent exploration efforts at its Oakes gold project in Ontario and what lies ahead in the new year.
Maurice Jackson: Welcome to Proven and Probable. I’m Maurice Jackson. Joining us for conversation is Dr. John-Mark Staude, the president and CEO of Riverside Resources Inc. (RRI:TSX.V; RVSDF:OTCQB).
It is a pleasure to be speaking with you. Riverside has some updates for shareholders regarding the second phase of targeting at the Oakes project, which is the first in a series of new projects that Riverside Resources has added to the property bank in Ontario. Dr. Staude, for someone new to the story, introduce us to Riverside Resources and the opportunity the company presents to the market.
Dr. John-Mark S: Riverside’s a prospect generator. We’re working in Canada, working in a major gold region and have the opportunity to be exposed to multiple different projects through partner programs. We also work in Mexico; we have BHP, multiple partners in Mexico, as well. Shareholders of Riverside have a diversified portfolio opportunity by buying and owning shares of Riverside.
Maurice Jackson: John-Mark, take us to western Ontario to the Oakes project where Riverside has just completed its second round of exploration. What can you share with us regarding drill targets and results?
Dr. John-Mark S: Riverside’s working around Lake Superior on the northern side on the corner of this map and it’s in the western part of Ontario, the province to the north of us is the project and the whole mining district of Red Lake, which has had big results, Timmins gold is just to the east of us and that’s had over 75 million ounces of production. The Greenstone belt, that’s the boundary of some of these geological terranes on the image above, which is the key area around the Geraldton Mine. What’s important to note is that the Geraldton mine district has over 8 million ounces of gold and the Black Interstate stretches from Eastern Canada to Western Canada and it is right by the Oakes project.
The Oakes Project is in a good location geologically and infrastructure wise; it just doesn’t get better right next to the Trans-Canada highway.
Maurice Jackson: John-Mark, what are we taking a look at here with regards to the Oakes project?
Dr. John-Mark S: The Oakes Project lines are identified here in brown. The VLF trends are the historical, very long low-frequency geophysical anomalies that we see in the detailed survey. We have good continuity between two sets of surveys that we’ve done to different lines and it’s so far going over 2.6 kilometers of a major structural zone. In that structural zone similar to other big mines in the region and big mines in Canada, the VLF anomaly, which is a conductive geophysical anomaly, has high-grade trench samples of 20 grams, even 30 grams of gold, very high-grade gold on Riverside’s projects.
Riverside is finding gold on the surface and now we see multiple other targets in here that were coming up and much greater continuity. So that’s a very exciting step in the geophysics and an exciting step for the project because it’s showing us that these projects could be now over two kilometers and this high-grade gold that goes underneath shallow cover. There are no outcrops, this really gives good potential for drilling. We are actively looking for partner drilling to explore these targets now; we’re very excited by this development at the Oakes project.
Maurice Jackson: Speaking of partners, looking forward, how does a prospective JV partner benefit from the refinement of these real targets?
Dr. John-Mark S: There are a number of virtues for a prospective JV partner. First is the location. Combine the location with the real benefit of having the following data, such as the trench data, the geophysical data, the field data, the mapping, and even the geological. And here we have some geological features that show us why there are breaks, allow us to figure out, okay, we have drill targets now, so we have this historical data ready to drill and what they really do is have this big upside. If this can go over two kilometers, this can be giant, really great, unbounded at depth. That’s the way these targets are. They have great depth to go but along strike it can be excellent as well, so a partner really can see this now as a turnkey, ready-to-go project just as Riverside as our business model focuses on doing.
Maurice Jackson: John-Mark, can you share with us or have any partners or prospective partners, I should say, contacted you regarding the Oakes project?
Dr. John-Mark S: We have. Right now we’re wrapping up the year and starting 2020, and we’re getting lots of interest because people realize it’s such an accessible project. Secondly, because it’s a project in Canada for 2020, people that have flow-through financing are looking for a really good project where there can be certainty that they can get there and could drill into some good geophysical features. These features here that we see on these maps that we can now put together give certainty that we know we have geophysics, we know we have good targets, we’re getting some good interest and we’re looking forward to working with those people. We have a number of conferences coming up early in 2020, and so we definitely see that this is going to be a great way to go on the project.
Maurice Jackson: John-Mark, Riverside conducted some mapping and survey work last month. What were you able to discover?
Dr. John-Mark S: While conducting the mapping, we were able to discover greater continuity of gold mineralization identified on this geological map, these trends extend over two kilometers and the second on the map goes for almost two and a half kilometers; these are big kilometer-long zones of mineralization. The mapping is finding greater continuity of high grade and greater continuity of geological targets.
The above image is from the site, and allows us to see isoclinal folds in mapping some displacement by Cross Fitting structures; here in the mapping we see some of the sheers. These things are allowing us to therefore see that the mapping is being able to develop greater extension from the gold we saw on the surface and we have sampling now to start to see it fits with the drill targets.
When we come back in and look in this bigger belt, we realize that we’re in a big belt with big potential. Similar to what you’re seeing at the Geraldton District. We’re seeing that over here at our Long Lac and our Oakes project. This is what the mapping is really showing that we have good detailed maps fitting in with the big regional structure that’s showing us that, yeah, this is now getting to be a really exciting drill target for partners.
Maurice Jackson: Does today’s press release impact the genetic or exploration model on the Oakes project?
Dr. John-Mark S: It doesn’t change it but it makes it better. I think the thing that it really helps us with is to see from the geophysics that we can go down deeper into the structures and or confirm a genetic perspective. We can see that definitely we have the chance to have a big system. We’re very excited by this geophysical data and by the greater sampling, that really helps us see that this can be bigger, so it doesn’t change the genetic but it fits with the genetic and it makes it seem even bigger as the target size.
Maurice Jackson: John-Mark, what is the next unanswered question for Riverside Resources? When could we expect an answer and what will determine success?
Dr. John-Mark S: Here at the Oakes project, the unanswered question is now can we get partners? And secondly with drilling and exploration, we see that as big scale now is drill ready. So we’re ready now with the focused drill program, which can easily be done to see if we can expand and make a big discovery. For Riverside, the next unanswered question fits in part with BHP. With BHP this coming week we’ll be doing presentations and looking for additional funding. We have a steady flow of base funding and that’s going well. Now we can get with BHP to fund even more aggressive exploration in Mexico, and another unanswered question is the Los Cuarentas project for Riverside where we having been sampling the field and we’ll look forward early in 2020 to have sample results leading towards drill targeting there.
Riverside has a flow of new results, a number of unanswered questions and we’re looking forward to 2020 early in the year to having a lot of good flow of news and multiple projects in part with partners’ funding. We’re really excited for where we are at Riverside right now.
Maurice Jackson: Before we close, John-Mark, please provide us with an update on the capital structure.
Dr. John-Mark S: The capital structure continues to be the same. A tight share structure with 63 million shares out, still with a good cash position of over $2.5 million cash, no debt. Still we run the company tight and carefully and we’re delighted to do that as we look into 2020 as well.
Maurice Jackson: Dr. Staude, for someone listening who wants to get more information on Riverside Resources, please share the contact details.
Dr. John-Mark S: Please come to the website, that’s www.rivres.com, or please phone us at (778) 327-6671. We’d love to speak to you. We’re delighted for anyone coming and putting any questions to the website
Maurice Jackson: And as a reminder, Riverside Resources trades on the TSX.V: RRI | OTCQB: RVSDF.
Before you make your next bullion purchase, make sure you call me; I’m a licensed representative for Miles Franklin Precious Metals Investments where we provide a number of options to expand your precious metals portfolio from physical delivery, offshore depositories, precious metal IRAs, and private blockchain distributed ledger technology. Call me directly at (855) 505-1900 or you may email [email protected]. Finally, we invite you to subscribe to www.ProvenandProbable.com, where we provide Mining Insights and Bullion Sales.
Riverside Resources is a sponsor of Proven and Probable and we are proud shareholders of Riverside Resources for the virtues conveyed in today’s message.
Dr. John-Mark Staude of Riverside Resources, thank you for joining us today on Proven and Probable.
Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.
Disclosure: 1) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Riverside Resources. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Riverside Resources is a sponsor of Proven and Probable. Proven and Probable disclosures are listed below. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own shares of Riverside Resources, a company mentioned in this article.
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German Ifo business sentiment index rose more than expected in December. Will the EURUSD rise?
On 1-hour timeframe EURUSD: H1 is in downtrend, poised to test the 200-period moving average MA(200) which is level. The RSI indicator is below 50 but has not reached the oversold zone.
In the H4 chart, there was a gap on the price chart and a divergence on MACD, after which the pair reached 61.8% fibo. We can see that GBPUSD has already eliminated the gap and right now is correcting to the downside. After completing the pullback, the instrument may start another rising wave towards 76.0% fibo at 1.3794.
The H1 chart shows the more detailed structure of the current descending correction. At the moment, the pair is getting close to 38.2% fibo at 1.3011 and may later reach 50.0% and 61.8% fibo at 1.2856 and 1.2700 respectively. The resistance is the high at 1.3514.
EURJPY, “Euro vs. Japanese Yen”
In the H4 chart, EURJPY continues the uptrend to break 76.0% fibo and reach its mid-term high at 123.36. At the same time, there is a divergence on MACD, which may indicate a possible pullback. The support is at 61.8% fibo (120.50).
As we can see in the H1 chart, the first descending wave has reached 38.2% fibo. The next wave to the downside may be heading towards 50.0% and 61.8% fibo at 121.32 and 121.00 respectively. The local resistance is the high at 122.65.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
After completing the ascending structure towards 1.1170 and returning to 1.1140, EURUSD is still moving downwards to reach 1.1123. Possibly, today the pair may test 1.1140 from below and then resume falling with the target at 1.1100.
GBPUSD, “Great Britain Pound vs US Dollar”
After forming a downside continuation pattern and breaking 1.3300, GBPUSD has reached 1.3074. Today, the pair may recover by growing towards 1.3180. If later the price breaks this level to the upside, the market may continue moving upwards with the target at 1.3300.
USDCHF, “US Dollar vs Swiss Franc”
USDCHF has broken 0.9817 downwards. Possibly, today the pair may test this level from below and then form a new descending structure towards 0.9790. After that, the instrument may resume the uptrend with the first target at 0.9890.
USDJPY, “US Dollar vs Japanese Yen”
USDJPY is still consolidating around 109.45. Today, the pair may fall towards 109.13 and then start a new growth to return to 109.45.
AUDUSD, “Australian Dollar vs US Dollar”
AUDUSD has reached 0.6865; right now, it is consolidating around this level. If later the price breaks this range to the upside at 0.6860, the market may resume moving upwards with the target at 0.6890; if to the downside at 0.6835 – start a new decline towards 0.6810.
USDRUB, “US Dollar vs Russian Ruble”
USDRUB is consolidating around 62.45. Possibly, today the pair may fall towards 62.25 and then start another growth to return to 62.45. Later, the market may continue trading inside the downtrend with the target at 62.02.
USDCAD, “US Dollar vs Canadian Dollar”
USDCAD is consolidating around 1.3160. Today, the pair may expand the range towards 1.3175. Later, the market may start another decline to return to 1.3160 and then form one more ascending structure with the target at 1.3199.
XAUUSD, “Gold vs US Dollar”
Gold is consolidating around 1476.16 without any particular direction. The main scenario implies that the price may expand the range towards 1481.26 and then resume moving downwards with the target at 1465.05.
BRENT
Brent has completed the ascending wave at 66.30; right now, it is correcting downwards to reach 65.55. After that, the instrument may continue the uptrend towards 67.07.
BTCUSD, “Bitcoin vs US Dollar”
After finishing the descending wave at 6840.00, BTCUSD has formed another consolidation range. Possibly, the pair may break this range to the downside and continue trading inside the downtrend with the target at 6500.00. Today, the price is expected to reach the target and then resume moving upwards to test 6840.00 from below.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
