Weekly Technical Outlook – US 500, GBPUSD, USDJPY
US 500 muted ahead of FOMC minutes
GBPUSD meets key levels awaiting Eurozone’s and UK PMIs
Japanese inflation may drive USDJPY even lower?
FOMC minutes --> US 500
The FOMC minutes are one of the highlight events of the week, coming up on Tuesday instead of Wednesday due to the Thanksgiving holiday on Thursday in the US. During this meeting, the Federal Reserve opted to maintain interest rates at their current level and adopted a neutral stance. They emphasized the uncertainty about whether or not current policy is restrictive enough at curbing inflation.
The US500 (Cash) index has been losing momentum over the past three days but is still holding well above the broken descending trend line, which has been drawn since July 27. The next important resistance levels to watch are 4,540 and the 16-month high of 4,607. Alternatively, a retreat could take the market back near the uptrend line and the 100-day simple moving average (SMA) around 4,400.EU and UK PMIs --> GBPUSD
The business surveys on Thursday will attract significant attention in both the Eurozone and the UK. Both economies exhibit comparable conditions, characterized by a prolonged period of sluggish economic growth during most of this year, with the possibility of entering a recession, as indicated by earlier iterations of these business surveys.
GBPUSD found strong support at the 200-day SMA and is trying to surpass the 38.2% Fibonacci retracement level of the down leg from 1.3140 to 1.2035 at 1.2460. Notably, a rally above the 1.2500 round number could endorse the bullish outlook in the short-term, sending prices even higher.Japanese inflation --> USDJPY
At the end of the week, Japanese inflation data for October will be released on Friday, with core CPI expected to tick up. The yen has been devastated this year, almost touching a three-decade low against the US dollar as interest rate differential widened against it.
USDJPY has plunged more than 2% since Thursday, penetrating the medium-term ascending trend line to the downside. More declines could meet the 147.30 barrier and then the 145.80 support, continuing the downside correction. The RSI and the stochastic oscillators are endorsing this view as both are meeting their negative zones.
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