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Forex Market Outlook: 1 December 2022

Updated December 1, 2022

Dollar index plummeted following dovish remarks by Fed Chair Jerome Powell on Wednesday in a speech at Brookings institution, highlighting the need to ease the pace of rate hikes moving forward, with moderation taking effect as soon as the December meeting. He also noted that terminal rates could exceed 4.6% projections indicated in September. Elsewhere, Euro rallied against the greenback, following the Dollar’s decline on Thursday to trade at around 1.04 as investors digested easing inflation data which stood at 10% in November, albeit a far cry from ECB’s target of 2%. Markets are now weighing between a 50bps or 75bps rate hike in ECB’s December meeting, following President Lagarde’s remarks indicating that Eurozone inflation has yet to peak which could see the central bank stay on its course for more rate hikes to rein in inflation.  

Today’s trade ideas: 1 December 2022

NZDUSD H1: Bullish outlook seen, further upside above 0.6250

On the H1 time frame, prices are holding above an ascending channel where a throwback to the 0.6250 support zone, in line with the Fibonacci confluence levels could provide an opportunity to play the bounce to the resistance target at 0.6350, in line with the 100% Fibonacci extension level. Prices are holding above the Ichimoku cloud as well, supporting the bullish bias.

Coloured candles represent our projection
Source: TradingView. https://www.tradingview.com/chart/NZDUSD/kOuCEhmk-NZDUSD-H1-Bullish-outlook-seen-further-upside-above-0-6250/

XAUUSD D1: Bearish outlook seen, potential reversal below 1806.20

On the Daily time frame, prices are approaching the resistance zone at 1806.20, in line with the graphical support-turned-resistance level and 38.2% Fibonacci retracement. A pullback to the resistance zone at 1806.20 presents an opportunity to play the drop to the next support target at 1727.80 which coincides with the graphical support zone and Fibonacci confluence levels. Stochastic is testing resistance supporting the bearish bias.

Coloured candles represent our projection
Source: TradingView. https://www.tradingview.com/chart/XAUUSD/4kyNVFlM-XAUUSD-D1-Bearish-outlook-seen-potential-reversal-below-1806-2/

USDJPY H1: Bearish outlook seen, further downside below 138.50

On the H1 time frame, prices are facing bearish pressure from the resistance zone at 138.50, in line with the Fibonacci confluence levels where a pullback to this zone presents an opportunity to play the drop to the daily demand zone at 135.20. Prices are also holding below the 20 MA and Ichimoku cloud as well, supporting the bearish bias.

Coloured candles represent our projection
Source: TradingView. https://www.tradingview.com/chart/USDJPY/p1dtEmt0-USDJPY-H1-Bearish-outlook-seen-further-downside-below-138-50/  

Past performance is no indication of future performance. This report is provided by Zeta Labs, a specialized Forex Fintech Consultant and Technical Advisor who provides white-label solutions for FX Market Analysis, trading insights and education webinars. The team has a wealth of industry experience, with our analyst being part of the team recognised by The Technical Analyst Awards as Finalist for the Best FX Research for 4 consecutive years (2019, 2020, 2021, 2022)

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