SGT Chart Book

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A gradual cooling of the still-solid labour market extended into November, renewing optimism that the economy is still on a glide path for a soft landing.

Friday, U.S. employers added 199,000 jobs in November, the Labor Department said, a slowdown from earlier in the year but more than economists had expected. The unemployment rate slipped to 3.7%.

 

The equity markets cheered the report, with the Dow Jones Industrial Average gaining 130 points, or 0.4%, in line with the percentage gains of the S&P 500 and Nasdaq Composite. All three indexes closed at their highest level of the year.

 

Markets ticked higher to end the week after closely watched jobs data came in slightly hotter than expectations.

 

Friday’s data added to optimism that the economy is gliding toward a soft landing. Stocks have rallied and bond yields have dropped since the beginning of November as investors have bet that the Federal Reserve will get inflation under control without causing a steep recession.

 

Now, traders are pricing in rate cuts from the central bank next year, with the first coming as soon as March. Traders see a roughly 50% chance of a rate cut at the Fed’s March meeting, according to the CME FedWatch Tool. Treasury yields rose after the jobs report, with the yield on the benchmark 10-year note hitting 4.244%, from 4.129% Thursday.

 

Commentators suggested that while the market is pricing in five rate cuts for next year, the Fed will need to see more evidence of a “soft landing with staying power” before doing so.

 

Japanese stocks fell, and government bonds sold off for a second day as expectations that the country’s central bank will end its negative interest rate policy continued to affect markets.

USA30

Gains into the end of 2023 are still expected.

USA100

After the breakout of the down channel seen on the below chart, the bulls are clearly in control.

USA500

Clear challenge of the 4600-level seen last week. While getting overbought in the short term. We still favour the upside into the end of 2023.

US 10-YEAR NOTE

Testing up-trendline support

EURUSD

Pull back in recent rally challenges the Fibonacci 50% retracement level.

USDJPY

Selling pressure from above the 150-level pushed market through the base of channel support.

USDCAD

Trendline support hovering below the market to provide some levels for USD bulls to enter.

EURCHF

While the down-sloping trendline dominates, look left and see testing of previous lows to offer market support.

XAUUSD

WOW, what a ride last week after break above the previous highs to spike higher before the big sell off.

XAGUSD

Similar to Gold, trendline resistance was broken to see higher levels before an aggressive turnaround. Short-term up-trendline can offer some support.

USOIL

WTI Oil broke below $70 per barrel last week.

BTCUSD

Another high seen for BTC last week. The market is significantly over-bought and showing signs of bearish divergencies against the RSI indicators, while not a reason to sell alone worth keeping close eye on price action.

ETHUSD

Clear break higher above the series of tops and bottoms, look left. We also notice bearish divergencies against price action. Maybe suggesting a period of consolidation in the short term.

Until next week, happy trading.
SGT Trade Desk

Disclaimer: Trading Desk Observations are not trade recommendations. The purpose of these charts is to bring to your attention potential chart patterns you may wish to monitor.

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