Weekly Technical Outlook – WTI, USDJPY, EURUSD

Weekly Technical Outlook – WTI, USDJPY, EURUSD

·         OPEC+ meeting expected to cut production; WTI crude oil remains in the red

·         US Core PCE index to soften; USDJPY fails to climb higher

·         Eurozone flash inflation to tick lower; EURUSD holds near previous 3-month high

OPEC meeting --> WTI 

The OPEC meeting was scheduled for November 26th but has been postponed to this Thursday. This suggests deepening alliance disagreements over whether to curtail production, according to investors. Saudi Arabia, which wants to keep prices from falling, will likely reach a deal. However, even if that is the true and OPEC+ provides a plan to tighten supply over the coming months, Saudi Arabia will probably not get as much reduction as it wanted. Any additional cuts beyond those announced on Thursday are likely off the agenda. 

Technically, WTI crude oil futures confirmed a bearish bias in the short-term after the rejection of jumping above the negative cross within the 20- and the 200-day simple moving averages (SMAs). More losses could drive the market towards the 72.30 support before meeting the lower boundary of the descending channel near 68.20. However, any jumps above the 200-day SMA could send the price towards the 80.00 round number. 

US Core PCE index --> USDJPY

The upcoming focal point will be the US dataset scheduled on Thursday, encompassing personal income and expenditure, alongside the core PCE price index. It is anticipated that both personal income and consumption experienced moderation in October. The core PCE inflation measure, which holds significant importance, is expected to have decelerated from 3.7% to 3.5% y/y in the month of October.

In FX markets, USDJPY has been stubbornly pushing for some recovery without success lately. The pair is still developing beneath the near-term SMAs, holding near the 149.00 area. In case of more declines, they could open the way for a test of the 147.10 and 145.80 barriers. Only a fall beneath the 200-day SMA at 141.85 could endorse the negative structure. On the other hand, a jump above the 13-month high of 151.90 could brighten the bullish outlook again. 

Eurozone flash CPI --> EURUSD

The preliminary measurements of inflation for November for the Eurozone will also be released on Thursday. It is anticipated that the Harmonized Index of Consumer Prices (HICP) will drop from 2.9% to 2.8% in November, marking the lowest level in almost two years. It is anticipated that the core measure, which excludes all volatile items, will come in at 4.0%, down from 4.2% in October.

EURUSD is failing to surpass the more-than-three-month high of 1.0965. A climb above this region could be a big achievement in the short-term timeframe, sending prices to the 1.1065 and 1.1150 resistance levels. Alternatively, a drop lower could challenge the 1.0850 support before resting near the 200-day SMA at 1.0810.