What’s next

NFP

• Expect a slowdown from 263k previous to 197k consensus
• Adding more volatility to the USD to end the week
• If the actual missed the forecast, it could be a potential hindrance to Fed’s tight stance

FOMC statement summary

• Fed Chair Powell was more hawkish than what the market had expected
• He said a pause in rate hikes would be premature
• Also mentioned was the probability of a terminal rate that is going to exceed the forecast

Precious Metals

XAUUSD

XAUUSD H4

• The likelihood of price retesting the bearish trendline is high
• If it doesn’t happen in the next 4 hours, the volatility from NFP will probably force a retest anyhow
• Our preference remains bearish in the short to medium term, hunting for a short opportunity at the resistance area near 1665 to 1675

Forex

USDJPY

USDJPY H4

• USDJPY consolidates into a triangle pattern as NFP approaches
• The tendency for a bullish continuation is high, provided that the Fed is still perceived as hawkish
• We are eyeing a breakout to the upside without eliminating the possibility of a downward spike to near 147 whole level before the potential up move

Energies

Crude Oil

USOIL H4

• Oil gained as the dollar’s strength eased
• Supply is still tight with US’s inventories falling and an impending embargo against Russia starting December 
• Demand fears are keeping bulls in check. In the US, Powell said rate hikes are not pausing so soon, capping potential price gains. Covid flare-ups in Guangzhou, China are not good news for crude oil either
  

US Stocks

Dow Jones 30

DJ30 H4

• The Fed dropped a hammer on the stock market. 
• DJ30 dropped as much as 4.06% from its intraday high following the announcement
• From a technical perspective, the trendline lined up well with the FOMC statement and press conference, acting as a tough resistance for the Dow. 
• A still-hawkish Fed keeps pressure on equities
• Our preference is bearish for the short-term, targeting the 31000 support area

 Cryptocurrencies

Bitcoin

BTCUSD Daily

Bitcoin surprisingly holds up well amidst the fourth 75bps  rate hike from the Fed. Being a risk asset, Bitcoin is susceptible to wild swings and was expected to tank following the FOMC statements but that was not the case. In fact, the $20,000 seems to be solidifying and the consolidation range is getting expanded wider to the upside. 

There are many questions in the space now. Is it because of the expectations that the Fed is going to slow down the hikes in the near future after being so aggressive in recent months? Has Bitcoin bottomed out?

Technical analysis- the immediate support is now 20,000, with the next key support at 18,500. Should there be an impulsive move to the upside, 22400 will be Bitcoin bulls’ first test.

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