Highlights from the summit so far include a meeting between Biden and Xi.

What You Need To Know

The Premier of China and the President of the U.S. have met at the G20 Summit and agreed to reduce tension between the 2 nations, leading the Hang Seng surge to its 1-month high. Meanwhile, the dollar has eased on its recent bearish momentum with the Fed highlighting that they will be persistent with tight monetary policy until the inflation rate is back at the 2% level. Oil prices remained gloomy despite the energy demand expected to increase in the winter season, with China’s surging Covid-19 cases wiping hope that the world’s biggest crude oil importer will reopen its economy soon and push oil demand higher. 

Look Out For

Current rate hike bets on 14th December Fed interest rate decision: 

75 bps (19.4%) VS 50 bps (80.6%)   

Market Movements

DXY

The Dollar Index rebounded amid technical correction after depreciating by 4% last week, marking its most significant weekly drop since March 2020 following the pessimistic US Consumer Price Index (CPI) prompting bets for slower hikes. Meanwhile, several Federal Reserve officials still insist on continuing its rate hike path, albeit at a slower pace. Fed Vice Chair Lael Brainard claimed it would be appropriate to move to a slower pace of increase, though he reiterated that there is still additional work to do to stabilise inflation.

The Dollar Index is trading higher following prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 33, indicating the index was going into oversold territory.  

Resistance level: 107.80, 109.65

Support level: 106.45, 105.00

XAU/USD

The safe-haven gold remains stable ahead of the Group of 20 (G20) meeting. The G20 summit, being held on Tuesday and Wednesday on the Indonesian island of Bali, where world leaders are gathering to discuss global issues from climate change to inflation, and rising food prices as the fallout from the Russia-Ukraine war looms. In addition, US President Joe Biden will meet Chinese leader Xi Jinping face-to-face on Monday for their first in-person talks since Joe Biden became president. The discussions could have long-lasting consequences for the world’s most important bilateral relationship, while investors will continue to eye on these developments for further trading signals.

The gold market is trading higher while currently testing the resistance level. Nevertheless, MACD has illustrated increasing bearish momentum, while RSI is at 69, suggesting the product is going into overbought territory.  

Resistance level: 1770.35, 1801.30

Support level: 1727.20, 1681.85

EUR/USD

The bullish momentum seems to have halted when the pair approaches its strong resistance at 1.03635. The bearish USD was at ease last night after the Fed’s Governor said that the Fed would persistently be working on curbing inflation to a favourable rate at 2%. 

A very strong resistance at 1.03635 is awaiting the pair to break through and the last time the pair traded above this level was in early July this year. The MACD line has crossed against the signal line on the above and the RSI has been hovering near 70; these suggest that the bullish momentum for the pair has slowed down and signal that a minor retrace may happen. 

Resistance level: 1.03635,1.0577

Support level: 1.0115, 0.9917

BTC/USD

The collapse of the world’s second-largest cryptocurrency broker, FTX, has brought BTC to its lowest since November 2020. The market’s uncertainty and instability are yet to clear, which will pressure the price movement of BTC. Things got worse after the Fed reiterated that they would be persistent in working on cooling inflation, which will indirectly strengthen the dollar and as a result, suppress BTC lower. 

There is a strong support for BTC at 15900 which the btc has rebounded 3 times at that level in a week. If there is no catalyst for the btc in recent times, it is believed that BTC will be consolidating in the range between 15900 to 17400. The MACD is picking up but still flows below the zero line, where the RSI is ranging near 50-level with no strong movement from both indicators. 

Resistance level: 17400, 18500

Support level: 15900

DJ30

The US equity market edged slightly lower after US Treasury yields rose as investors reassessed the rate hike path of the Federal Reserve. Investors are now awaiting the US Producer Price Index (PPI) data as well as a string of Fed officials’ statements for further trading signals. Nonetheless, the overall trend for the Dow Jones still remains subdued as investors prefer to avoid huge volatility ahead of the G20 meeting. 

The Dow is trading lower following prior retracement from the resistance level. MACD has illustrated diminishing bullish momentum, while RSI is at 65, suggesting the product was going into overbought territory. 

Resistance level: 34320, 35720

Support level: 33065, 31045

GBP/USD

The pound fell as the dollar had a technical rebound from its low on Monday. Meanwhile, British Chancellor Jeremy Hunt’s autumn statement shows that he is expected to set out tax raises and a cut back on spending. Investors could focus on the UK government’s budget plan, which will be announced on Thursday for future trading signals.

The pair is testing its resistance level at 1.1779 as of writing, suggesting that it might break through the resistance and is likely to move upwards. While MACD remains upward, indicating a bullish momentum ahead. Besides, RSI is trading at 65, which suggests it remains bullish in the short term. 

Resistance：1.1898, 1.2056

Support： 1.1484, 1.1134

USD/JPY

The dollar rose against the Japanese yen on Monday as more Federal Reserve officials made a case for even tighter monetary policy. As Japan’s economic recovery slammed, the dollar gained 0.34% to the yen at 140.35 as of writing. Japan’s GDP contracted at an annualised pace of 1.2% in the third quarter, as weakness in the currency inflated the country’s import bill.

MACD is hovering at bearish momentum, while RSI is trading at 37. Both indicators show that the pair trades within the bearish range of around 138 to 142. Investors can keep an eye on the next support level at 138, and if it breaks out of the support line, we could expect it might drop significantly. 

Resistance level: 142.04, 145.05

Support level: 138.57  136.34

CL OIL

Oil prices dipped after OPEC reduced its forecast for 2022 global oil demand growth, citing mounting economic challenges, including recession fears, and rising interest rates acting as a headwind for oil demand. According to the monthly report of the Organization of the Petroleum Exporting Countries (OPEC), oil demand in 2022 will only increase by 2.55 million barrels per day (bpd), down 100,000 bpd from the previous forecast.

Crude oil prices are trading lower following prior breakout below the previous support level. MACD has illustrated increasing bearish momentum, while RSI is at 33, suggesting downside is more favoured as the RSI stays below the midline. 

Resistance level: 89.75, 92.60

Support level: 85.75, 83.05