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Daily Market Outlook, November 28, 2022
‘Risk Sentiment Softens As China Protests Escalate ’
Overnight Asian equity markets opened with a subdued tone as investors expressed concern with protests in China growing. Protesters took to the streets over Covid restrictions, which many believe played a major part in deaths in a fire in a block of flats. With Covid cases at record levels and civil unrest growing, markets are wary of further potential impacts on supply chains. Apple announced this morning that they will lose about six million iPhone Pros due to protests at its plant. The potential impact on global growth driven by China’s Covid policies coupled with civil unrest in the region has caused oil to plunge in overnight trade printing lows not seen since 2021 below $75 a barrel for WTI Crude. Black Friday retail data seems to suggest robust consumer spending with a projected record $9.12bln online sales, focus now shifts to Cyber Monday, Reuters expects record spending today as online sales grow 5.1% year over year to over $11bln.
For the day ahead: Markets will continue to monitor developments in China. On the data slate, there is a lack of tier-one data due today, in the Eurozone M3 money supply is expected to show modest annual growth falling from 6.3% to 6.1% for October. Later today ECB President Lagarde is to appear before the European Parliament's Economic and Monetary affairs, markets will parse her comments for any further clues as to the ECB's rate path and monetary policy outlook, as recent comments from ECB officials seem to suggest that the rate move for the December is a close call between 50-75bps. In the US markets will be looking to Fed speakers Bullard and Williams, Bullard is likely to push the line of a higher terminal rate, he is of the view that 5-7% is the appropriate ballpark, however, more weight will be given to Fed Chair Powell's speech later this week, for more details on the fundamental and technical drivers for the week ahead see my market outlook video here
Overnight Headlines
Chinese Protests Spread Over Government’s Covid Restrictions
China Markets Slide As Covid Protests Put Investors On Edge
Oil Retreats To The Lowest Since 2021 On China’s Covid Unrest
China's Party Paper Reiterates Enforcement Of Covid Policies
China Reports Another Daily Record Of Covid Cases Amid Protests
China’s Industrial Profits Drop As Covid Surges, Prices Fall
Australia Retail Sales Fall For First Time In 2022 As Rates Bite
RBA’s Lowe Sees Better Chance Of Australia ‘Soft Landing’ Than Peers
RBNZ’s Silk: NZ Faces 'Shallow' Recession As Rates Need To Rise More
ECB's Makhlouf Sees Smaller Interest Rate Hikes In 2023, If Needed
Yuan, Commodity Currencies Slide As China Covid Unrest Hits Mood
Iraq Plans To Start Expanding Oil Export Capacity From Next Year
Black Friday Lured Shoppers Back, In Early Test For Holiday Spending
US Bans Huawei, ZTE Equipment Sales, Citing National Security Risk
Technical & Trade Views
SP500 Bias: Bullish Above Bearish Below 3990/80
Technicals
Primary support is 3990/80
Primary upside objective is 4120
Next pattern confirmation, acceptance above 4050
Failure below 3950 opens a test of 3900
20 Day VWAP bullish, 5 Day VWAP bullish
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EURUSD Bias: Bullish Above Bearish below 1.0340
Technicals
Primary support is 1.0340
Primary upside objective is 1.0620
Next pattern confirmation, acceptance above 1.0485
Failure below 1.03 opens a test of 1.0220
20 Day VWAP bullish, 5 Day VWAP bullish
Today’s New York Cut Option Expiries: 1.0240-50 (2.4BN), 1.0250 (2.0BN), 1.0300 (737M), 1.0350 (377M), 1.0390-00 (1.06BN), 1.0405-15 (777M), 1.0425 (1.0BN), 1.0450-55 (708M)
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GBPUSD Bias: Bullish Above Bearish below 1.1950
Technicals
Primary support is 1.1950
Primary upside objective 1.22
Next pattern confirmation, acceptance above 1.21
Failure below 1.19 opens a test of 1.1770
20 Day VWAP bullish, 5 Day VWAP bullish
Today’s New York Cut Option Expiries: 1.2100 (991), 1.2300 (439M)
EUR/GBP: 0.8630 (229M), 0.8650-60 (310M)
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USDJPY Bias: Bullish above Bearish Below 140
Technicals
Primary resistance is 140
Primary downside objective is 136
Next pattern confirmation, acceptance below 138
Acceptance above 142.20 opens a test of 143
20 Day VWAP bearish, 5 Day VWAP bearish
Today's New York Cut Option Expiries: 137.50 (214M), 138.30 (900M), 138.50 (842M)
EUR/JPY: 145.95-05 (628M)
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AUDUSD Bias: Bullish Above Bearish below .6650
Technicals
Primary support is .6650
Primary upside objective is .6900
Next pattern confirmation, acceptance above .6775
Failure below .6660 opens a test of .6600
20 Day VWAP bullish, 5 Day VWAP bullish
Today’s New York Cut Option Expiries: 0.6600 (308M), 0.6700-05 (819M), 0.6710-15 (270M)
NZD/USD: 0.6140 (313M)
USD/CAD: 1.3300 (220M), 1.3325 (220M) 1.3400 (250M), 1.3540 (230M)
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BTCUSD Bias: Intraday Bullish Above Bearish below 16100
Technicals
Intraday 16100 is primary resistance
Primary upside objective is 17000
Next pattern confirmation, acceptance below 16750
Failure 16000 opens a test of 15500
20 Day VWAP bearish, 5 Day VWAP bullish
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!