Financial markets have been very quiet due to the US holiday and most assets have held within a tight range although oil has seen a correction lower in light trading on thin volumes, with WTI down by 2%, at 45.00.
Elsewhere it has been a day of consolidation, with the FX markets ranging sideways although Sterling has corrected a little lower from the 3 month high, seen earlier in the week, as Brexit negotiations have apparently hit a road block over fishing rights. Otherwise all the major pairs are where they were 24 hours ago.
Stocks have also drifted away from the highs seen earlier in the week, but with little damage done and look set to be underpinned in the days ahead, after the FOMC Minutes, released yesterday, suggested that the Fed had seriously considered upwardly adjusting their QE programme. This may underpin risk associated assets in the days ahead as traders view the prospect of the Fed acting to do so at their next meeting on December 10. The ASX has also corrected lower from its new 9 month highs and could be a little heavy in the next couple of days. The daily charts do look a little toppish although in the longer term the weekly charts still look positive and I suspect that eventually we are going to revisit 7000. Given the huge gains seen in November, currently around 11.7%, further selling interest as asset managers lock in some profits before the end of the month, would not surprise.
Gold and Silver are flat although Copper has continued its recent strong run, up 1.5% on Thursday.
Friday will be a non-event in terms of economic data and with the US recovering from their Thanksgiving Day holiday it is likely to be a quiet end to the week. The main event will be the release of the EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, for November. Have a good weekend.
Economic data highlights will include:
Fri: NZ Consumer Confidence, Japan Tokyo CPI, EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate.
Market moves, in brief:
FX: DXY 92.00 (+0.03%)
Bonds: US10Y; +0878% (-0.55%), German 10Y; -0.567% (-0.39%), UK 10Y; 0.286% (-12.10%), Australian 10Y; 0.944% (+4.65%), NZ 10Y; 0.975% (+9.31 %), China 10Y; 3.31% (-0.17%)
Stock Indices: DJI; -0.58%, S+P; -0.16%, NASDAQ; +0.01%, EUStoxx50; -0.03%, FTSE100; -0.44%, Shanghai Composite; +0.22%, ASX200SPI: -0.75%
Metals: Gold $1810 oz (+0.15%), Silver $23.32 oz (-0.03%), Copper $3.3575 lb (+1.45%), Iron Ore $124.33 per tonne (NYMEX) (+0.14%),
Oil: WTI $45.00 pb (-1.90%)
Trend Table: November 27, 2020
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In the trend table below, when looking at the charts for a particular FX pair, index or commodity, we are we searching for 2 or 3 consecutive boxes of the same colour which might indicate a trend – and a possible trading opportunity. Consecutive (1 & 4 hour, 4 hour/daily, daily/weekly) green boxes indicate a possible short/medium/long term uptrend; red, a possible downtrend, while blue signifies a neutral bias (range trade possibility). The boxes on the trend table merely replicate the look of the charts for the specific time-frame in MT4/5. Assets with a mixture of colours are pretty much ignored as choppy conditions seem likely to prevail.
For instance, if we see consecutive green boxes in the 1 hour and 4 hour time-frames for the FX pair “EURUSD”, that would signify the chance of a move higher in that pair over the next 24 hours. If the dailies were also green that would add to the bullish conviction from a slightly longer term perspective, and if the weeklies are also green then it would give added credence to the longer term bullish view, albeit that it might take longer for the trend to play out, so patience will almost certainly be required. The opposite would be true of red boxes, which could signify downward momentum. The strength of any possible trend depends on the time-frame, with the longer term (daily, weekly charts) obviously having a greater overall weighting than the short-term charts.
In the near term though, the 1 and 4 hour charts are what are likely to combine to indicate the possibility of a trading idea for the next few, possibly up to 24, hours.
Note that a longer term bullish view (green daily/weekly boxes) does not discount the possibility of near term dips (i.e. Red 1 & 4 hour boxes), which may indicate near term weakness and suggesting that we should be looking to buy dips for a longer term rally – and vice versa if the near term boxes are green and the longer term; red.
|1 Hour||Turning Neutral||Neutral||Neutral – Turning Higher?||Turning Neutral||Turning Neutral||Turning Neutral|
|4 Hour||Turning Lower?||Neutral – Turning Lower?||Neutral – Turning Lower?||Turning Neutral||Turning Neutral||Turning Neutral|
|1 Day||Neutral – Turning Higher?||Neutral – Turning Higher?||Neutral – Turning Higher?||Neutral||Neutral – Turning Higher?||Turning Higher|
|1 Week||Turning Neutral||Turning Neutral||Neutral – Turning Higher?||Turning Higher?||Neutral – Turning Higher?||Turning Higher|
|1 Hour||Neutral – Turning Lower?||Turning Lower||Turning Neutral||Turning Neutral||Turning Neutral||Neutral – Turning Lower?|
|4 Hour||Neutral – Turning Higher?||Neutral – Turning Lower?||Turning Lower||Turning Higher||Turning Neutral||Possible Topping Formation|
|1 Day||Neutral – Turning Lower?||Neutral – Turning Higher?||Possible Topping Formation||Turning Lower||Neutral – Turning Lower?||Turning Higher?|
|1 Week||Possible Basing Formation||Up – Overbought||Up||Down||Down||Neutral|
|1 Hour||Turning Neutral||Turning Neutral||Neutral – Turning Higher?||Turning Neutral||Turning Neutral||Turning Neutral|
|4 Hour||Neutral – Turning Lower?||Neutral – Turning Higher?||Turning Neutral||Neutral – Turning Lower?||Turning Neutral||Turning Neutral|
|1 Day||Turning Neutral||Turning Neutral||Turning Neutral||Turning Neutral||Turning Neutral||Turning Lower?|
|1 Week||Neutral – Turning Lower?||Neutral – Turning Lower?||Turning Neutral||Turning Neutral||Turning Neutral||Turning Lower|
There is no outlook today, in the absence of nay US markets., with liquidity remaining thin. A weekly video outlook for next week will be released over the weekend.