Euro Awaits Inflation Data as EUR/USD Struggles for Momentum

XAUUSD

Prediction: Likely Increase

Fundamental Analysis:
On Friday morning (November 29), spot gold prices rebounded swiftly from a daily low of $2,633.85 per ounce, climbing to a high of $2,645.52. Gold remains supported above $2,600 per ounce, driven by geopolitical tensions and speculation surrounding potential Federal Reserve rate cuts. A 60-day ceasefire agreement between Israel and Lebanon has been reached. However, the ongoing escalation of the Russia-Ukraine conflict is expected to sustain gold prices above $2,600. On Thursday, Russian President Vladimir Putin stated that extensive attacks on Ukraine were in retaliation for Ukraine's use of Western missile systems against Russian territory. Earlier that day, Ukrainian authorities reported targeted attacks on energy infrastructure by Russian forces.

Technical Analysis:
Gold prices are currently consolidating within a range defined by the 50-day Simple Moving Average (SMA) at $2,668 per ounce and the 100-day SMA at $2,572 per ounce. In the near term, gold exhibits potential for upward movement, provided buyers can surpass critical resistance levels. A breakout above the 50-day SMA could set the stage for a move toward $2,700 per ounce. Beyond that, the price may aim for $2,750 and potentially challenge the all-time high of $2,790 per ounce. Conversely, if sellers manage to push prices below $2,600, gold could retest the 100-day SMA at $2,572, with further downside potentially targeting the November 14 low of $2,536 per ounce.

USDJPY

Prediction: Decline

Fundamental Analysis:
In the Asian session on Friday morning (November 29), the USD/JPY pair experienced a sharp decline, dropping around 90 points to trade near 150.60. The yen strengthened following stronger-than-expected Tokyo CPI data, fueling market speculation about a potential Bank of Japan (BoJ) rate hike in December. Tokyo’s core Consumer Price Index (CPI) rose to 2.2% year-on-year in November, exceeding the previous month's 1.8% and economists’ forecast of 2%. Overall inflation climbed to 2.6%, driven by rising food prices and reduced energy subsidies implemented by the Japanese government. Bloomberg highlighted that this trend indicates Japan’s inflation momentum aligns with the BoJ’s projections, potentially prompting the central bank to act.

Technical Analysis:
Japan’s core CPI continues to exceed the BoJ's 2% target, bolstering the yen and adding downward pressure on the USD/JPY pair. BoJ Governor Kazuo Ueda has reiterated that the central bank may consider further rate hikes if inflation consistently meets its target. On the other hand, US economic data released Wednesday showed that progress in reducing inflation has slowed, particularly reflected in the Personal Consumption Expenditures (PCE) report. This weakens the likelihood of significant Federal Reserve rate cuts in 2025. Although US bond yields may recover slightly, lending temporary support to the US dollar, markets have raised the probability of a Fed rate cut in December to 62.8%, up from 55.7% earlier in the week, according to the CME FedWatch Tool.

EURUSD

Outlook: Potential for a Modest Upswing

Fundamental Analysis:
The release of new EU inflation data on Friday could provide the Euro with a lift heading into the weekend. However, EUR/USD has struggled to gain upward momentum recently. Traders will closely monitor the Harmonized Index of Consumer Prices (HICP), with core inflation expected to edge up to 2.8% year-on-year in November, from the previous 2.7%. This uptick might complicate the European Central Bank's (ECB) messaging, as officials have been hinting at further rate cuts in December and throughout 2025 to support the economy.

Technical Analysis:
After a brief recovery on Wednesday, EUR/USD managed to rebound slightly from its recent low below 1.0400. However, the recovery remains limited. Immediate resistance lies near the 1.0600 level, and even if the pair breaks higher, further gains could be restrained. The 50-day Exponential Moving Average (EMA), trending downward near 1.0750, could act as a significant barrier to sustained upside momentum.

BTCUSD

Prediction: Likely Increase

Fundamental Analysis
Bitcoin has demonstrated strong recovery momentum, climbing above $95,600 after an earlier dip. The rebound has been fueled by optimism surrounding former President Trump’s newly announced cabinet, which features a pronounced cryptocurrency focus. Five of the senior members are prominent Bitcoin proponents, signaling a potential crypto-friendly policy direction. Although the nominations await Senate confirmation, the Republican majority increases the likelihood of approval. Trump himself has disclosed significant involvement in digital assets, with holdings worth $1-5 million in Ethereum-based assets and earnings exceeding $7.15 million from NFT ventures, including the Mugshot and Donald Trump Trading Card series.

Technical Analysis
Derivatives data highlights interesting dynamics as the November options expiry approaches. Notably, only 20% of call options have strike prices at or above $100,000, collectively representing a nominal value of $4.25 billion. In contrast, fewer than 2% of put options are positioned at this level, with their nominal value plunging to approximately $80 million, rendering them largely insignificant. This suggests a bullish sentiment among traders. Outcomes for the expiring options on Thursday will hinge on Bitcoin’s settlement price. While calls typically reflect bullish sentiment and puts lean toward neutral or bearish strategies, these insights exclude more complex trading setups that might influence the market direction.

 

 

 

 

 

 

 

 

 

 

 

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