<p dir=“ltr“>This week we have two main risk events: the US CPI report and the <a target=“_blank“ href=“https://www.forexlive.com/news/what-to-expect-from-the-fomc-next-week-bofa-20221208/“>FOMC meeting</a>. These events will move the market in one way or the other depending on their outcomes. The current sentiment is bearish because after an incredible rally fuelled by worse than expected economic data and less hawkish Fed, the market recently leant on the defensive side as important reports surprised to the upside. </p><ul><li dir=“ltr“ aria-level=“1″><p dir=“ltr“ role=“presentation“>The <a target=“_blank“ href=“https://www.forexlive.com/news/us-november-non-farm-payrolls-263k-vs-200k-expected-20221202/“>NFP report</a> showed more jobs created and higher than expected wages with even a higher revision for the previous figures, which could indicate that inflation may be moderating but it may be harder for the Fed to return to their 2% target. </p></li></ul><ul><li dir=“ltr“ aria-level=“1″><p dir=“ltr“ role=“presentation“>The <a target=“_blank“ href=“https://www.forexlive.com/news/ism-november-us-services-565-vs-533-expected-20221205/“>ISM Services PMI</a> beat expectations and the prices paid sub-index remained high showing a resilience in the services sector. </p></li></ul><ul><li dir=“ltr“ aria-level=“1″><p dir=“ltr“ role=“presentation“>Finally, the <a target=“_blank“ href=“https://www.forexlive.com/news/us-november-ppi-74-vs-72-yy-expected-20221209/“>US PPI</a> beat expectations as well making the market fear a possible beat in the CPI report this week. The US CPI report may shape the FOMC reaction function.</p></li></ul><p dir=“ltr“>Going back to the chart. Below you can see how the price bounced from the lower band of the big yellow channel which has <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-confluence-20220318/“>confluence</a> with the lower band of the green and red regression channel. The price may now fall back to the 3937 level which is the area having a previous PoC (Point of Control) and VWAP (Volume-Weighted Average Price) and should provide some <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a>.</p><p dir=“ltr“>A 2-hours S&P500 E-mini Futures Chart on <a target=“_blank“ href=“https://tradingview.com“>tradingview.com</a></p><p dir=“ltr“>Looking ahead, the yellow channel may turn into a <a target=“_blank“ href=“https://www.forexlive.com/Education/chart-patterns-guide-20220125/“>bearish flag pattern</a> of the entire bear market. The breakout down of the strong 3920 level which acted as support 3 times and has confluence with the lower band of the yellow and the regression channel, may give the price momentum to resume the downtrend. So, watch out for the FOMC meeting on Wednesday as traders will be looking for trades after the event.</p><p dir=“ltr“>Watch the S&P 500 technical analysis video below to get a more detailed overview of the current state of the S&P500 and be prepared for the next moves. Click on the like button so you can get back to it if you need a refresh before the FOMC meeting.</p><p dir=“ltr“>Keep yourself updated on the latest developments in the markets following forexlive.com, and visit forexlive.com/technical-analysis to find more ideas and perspectives.</p>

This article was written by Itai Levitan at www.forexlive.com.

<ul><li>Prior 91.3</li></ul><p style=““ class=“text-align-justify“>US small business confidence rebounded last month but it is the 11th month running that the index stayed below its 49-year average of 98. Roughly 32% of business owners reported that inflation is their most important problem, down a point from October. About 51% of owners reported raising average selling prices on the month, up a point from October.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>18 of 28 economists see a 50 bps rate hike</li><li>9 of 28 economists see a 75 bps rate hike</li></ul><p style=““ class=“text-align-justify“>Some views from UBS and Citi on the upcoming Swiss central bank meeting:</p><p style=““ class=“text-align-justify“>“In our view, the SNB will not know the outcome of the ECB meeting beforehand and may not want to risk the rate differential becoming too wide, also given the ECB could surprise with a larger hike. Also, if in doubt, we think the SNB would rather opt for the more hawkish choice.“ — Felix Huefner, UBS senior European economist</p><p style=““ class=“text-align-justify“>“The slowing economy, falling energy prices but also the shift in emphasis to balance sheet reduction speak against big rate hikes. However, interest rate differentials are already historically wide with fewer meetings available, the SNB has to make bigger steps to keep up. That is why we stick with our call for a 75 bps rate hike to 1.25%.“ — Christian Schulz, Citi economist</p>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>Just something to keep an eye out for amid the hectic schedule in markets this week. Berlin says that „weapons deliveries are not on the agenda“ though. From earlier:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/is-the-g7-starting-a-quiet-push-for-peace-in-ukraine-virtual-g7-leaders-summit-called-20221212/“ target=“_blank“ rel=“follow“>Is the G7 starting a quiet push for peace in Ukraine? Virtual G7 leaders‘ summit called</a></li></ul>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>This comes amid more tepid sentiment in broader markets, with European stocks keeping slightly lower while US futures aren’t doing much. S&P 500 futures are up 4 points, or 0.1%, as investors have little appetite to go running. Meanwhile, 10-year Treasury yields are down 1.6 bps to 3.55% – not really offering much as well.</p><p style=““ class=“text-align-justify“>The dollar was slightly higher earlier on but is now trading little changed for the most part, sitting more mixed across the board. The technical picture remains unchanged as outlined earlier <a target=“_blank“ href=“https://www.forexlive.com/news/dollar-slightly-firmer-in-a-tense-start-to-the-week-20221212/“ target=“_blank“ rel=“follow“>here</a>. It’s all about the key risk events coming up in the next few days, so this tense period of waiting could very well continue through to tomorrow. Here’s a quick snapshot of dollar pairs at the moment:</p>

This article was written by Justin Low at www.forexlive.com.

<p class=“MsoNormal“>The S&P500 has been on an uptrend for 2 months now, which got amplified by the miss in the US CPI in November and unleashed a FOMO type rally out of it. </p><p class=“MsoNormal“>This “bear market rally” recently run into a strong technical year-long trendline and got some news against the narrative that supported the rally. This narrative was based on bad economic data in hope of a less aggressive Fed and earlier pause in their tightening cycle. </p><p class=“MsoNormal“>S&P500 Awaiting Key US Data</p><p class=“MsoNormal“>Tuesday: US CPI.</p><p class=“MsoNormal“>Wednesday: FOMC Policy Decision</p><p class=“MsoNormal“>We saw the uptick in the unemployment rate, the US Manufacturing PMI in free fall and the Fed signalling a slower pace of hikes beginning in December with a 50 bps move instead of 75 bps that they adopted for four consecutive times. </p><p class=“MsoNormal“>Finally, the US CPI report in November surprisingly missed expectations and prompted the market to expect an earlier pause from the Fed as the recessionary signals from the leading indicators may be finally showing signs in the lagging ones. </p><p class=“MsoNormal“>Recently though, the market got hit by <a target=“_blank“ href=“https://www.forexlive.com/terms/e/economic-data/“ target=“_blank“ id=“ed1b62b3-5e5b-4a70-82dc-4a13e98beda8_2″ class=“terms__main-term“>economic data</a> that show a resilience in the economy. In fact, after the huge intraday rally caused by a less hawkish than expected Fed Chair Powell speech, the US NFP report surprised beating expectations on jobs created and on the inflationary side higher than expected wages with previous figures revised upwards. </p><p class=“MsoNormal“>Some days later the ISM Services PMI beat expectations with prices paid sub-index remaining high. Finally, the US PPI report beat expectations and may make the market to err on the defensive ahead of the CPI report on Tuesday. Below you can see all the catalysts in the 1-hour S&P500 Futures chart.</p><p class=“MsoNormal“>S&P500 Technical Analysis</p><p class=“MsoCaption“>Recent two weeks of price action and catalysts on the S&P500 on tradingview.com</p><p class=“MsoNormal“>On the technical side the price has run into a year-long downward trendline that acted as resistance and started a fall breaking the 2 month-long upward trendline as the risk sentiment soured after the NFP and ISM data. After rebounding from the support in the 3920-3940 area, the price retested the broken trendline and got rejected as the US PPI data beat expectations. </p><p class=“MsoNormal“>Looking at the daily chart below we can see that the 3920-3940 area is also the neckline of the head and shoulders pattern and a breakout to the downside may see further sell-off, but we may need to wait for the US CPI and FOMC to have a clearer picture. </p><p class=“MsoCaption“>Daily chart of the S&P500 on <a target=“_blank“ href=“https://www.tradingview.com“ target=“_blank“ rel=“follow“>tradingview.com</a></p><p class=“MsoNormal“>If the two risk events come out on the hawkish side, then we will most likely see the price breaking down and resuming the downtrend and at this point waving goodbye to the hoped Santa Claus rally. </p><p class=“MsoNormal“>Otherwise, in case the US CPI report again misses expectations and the FOMC policy decision comes out as expected or even on the less hawkish side, then we may see the price rally again and possibly reach the 4320 level. </p>

This article was written by ForexLive at www.forexlive.com.

<ul><li>Domestic sight deposits CHF 510.8 bn vs CHF 518.0 bn prior</li></ul><p style=““ class=“text-align-justify“>Overall sight deposits continue to decline ahead of the SNB policy decision this week, in which the central bank is likely to announce a 50 bps rate hike (though with a risk that it could end up being just 25 bps). That will likely play into more policy adjustments involving sight deposits as outlined <a target=“_blank“ href=“https://www.forexlive.com/news/whats-behind-the-sudden-plunge-in-snb-sight-deposits-20221017/“ target=“_blank“ rel=“follow“>here</a> previously.</p>

This article was written by Justin Low at www.forexlive.com.

<p>The week is finally here. </p><p>The US CPI will kickstart the markets on Tuesday and that will transition into the Fed decision on Wednesday. Then when that is done, the SNB, BOE and ECB will all announce their interest rate decisions on Friday before the transition into the year end. </p><p>To better prepare, it is important to understand the key levels in play from a risk and bias defining perspective. </p><p>In this weekend report, Greg Michalowski of Forexlive speaks to the key fundamental events and then outlines the technical levels in play for the major currency pairs vs the USD. He also looks at the S&P, Nasdaq and 10 year yield and what those charts are telling traders technically.</p><p>Below are the currencies and instruments covered along with the start times. </p><ul><li>EURUSD: 4:46</li><li>USDJPY 10:50</li><li>GBPUSD 13:40</li><li>USDCHF 15.57</li><li>USDCADS 17:58</li><li>AUDUSD 19:10</li><li>NZDUSD 21:02</li><li>S&P 23:21</li><li>Nasdaq 24:22</li><li>10 year yield 24:46</li></ul>

This article was written by Greg Michalowski at www.forexlive.com.

<p>Bank of Japan monetary policy board member Hajime Takata in an interview with Japan’s Nikkei newspaper published on Saturday.</p><ul><li>Japan’s economy is not yet in a phase where the central bank can end yield curve control (YCC)</li><li>too soon to start a discussion about concrete methods of ending yield curve control</li><li> careful messaging would be needed when the time comes </li></ul><p>Takata acknowledged that risks have built due to the prolonged period of ultra-easy policy.</p><p>-</p><p>Takata is basically saying the same as Bank of Japan Governor Kuroda. Kuroda has repeated time and again that current policy is appropriate. This f<a target=“_blank“ href=“https://www.forexlive.com/centralbank/boj-governor-kuroda-says-its-too-early-to-discuss-specifics-on-the-banks-policy-framework-20221206/“ target=“_blank“ rel=“follow“>rom just last week</a>:</p><ul><li>when achieving the inflation target comes in sight the BOJ will likely debate a path towards an exit from easy monetary policy</li><li>at present, though, the benefits of current monetary easing outweighs the costs</li></ul><p>It pays to be aware that there is some murmuring in Japan about trimming back easy policy. From senior officials. As an example:</p><ul class=“text-align-start vertical-align-baseline“><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/bojs-tamura-says-policy-should-be-reviewed-says-2-cpi-goal-may-be-too-high-for-japan-20221201/“ rel=“follow“ target=“_blank“ class=“article-link“>BOJ’s Tamura says policy should be reviewed, says 2% CPI goal may be too high for Japan</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/possible-boj-kuroda-replacement-says-the-bank-should-review-its-policy-20221209/“ target=“_blank“ rel=“follow“>Possible BOJ Kuroda replacement says the Bank should review its policy</a></li></ul><p>-</p><p>While an exit from YCC or any other leg of Japan’s current ultra-loose monetary policy is not imminent, its something to watch out for in the new year, most likely some time after Q1. Governor Haruhiko Kuroda’s finishes in April 2023. New blood could bring new ideas. The JPY is seeing a headwind from current policy, especially as most other DM central banks jack rates higher. A change to YCC or any of the other planks of easy policy would be yen supportive, at the margin.</p><p>Bank of Japan monetary policy board member Hajime Takata. Takata is one of two new board members appointed under Prime Minister Kishida.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.

<ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-november-ppi-74-vs-72-yy-expected-20221209/“ target=“_blank“>US November PPI +7.4% vs +7.2% y/y expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/umich-us-december-prelim-consumer-sentiment-591-vs-569-expected-20221209/“ target=“_blank“ draggable=“false“>UMich US December prelim consumer sentiment 59.1 vs 56.9 expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/putin-we-will-think-about-oil-output-cuts-20221209/“ target=“_blank“>Putin: We will think about oil output cuts</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/baker-hughes-us-oil-rig-count-2-20221209/“ target=“_blank“>Baker Hughes US oil rig count -2</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/could-bank-of-americas-ceo-leave-his-job-to-be-treasury-secretary-20221209/“ target=“_blank“>Could Bank of America’s CEO leave his job to be Treasury Secretary?</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/atlanta-fed-q4-gdpnow-tracker-32-vs-34-prior-20221209/“ target=“_blank“>Atlanta Fed Q4 GDPNow tracker +3.2% vs +3.4% prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-october-wholesale-inventories-05-vs-08-expected-20221209/“ target=“_blank“>US October wholesale inventories +0.5% vs +0.8% expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/chinas-xi-advocates-for-yuan-settlement-of-oil-and-gas-trade-with-gulf-states-20221209/“ target=“_blank“ draggable=“false“>China’s Xi advocates for yuan settlement of oil and gas trade with Gulf states</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/german-governments-public-deficit-will-be-much-higher-in-2023-than-previously-thought-20221209/“ target=“_blank“ draggable=“false“>German government’s public deficit will be much higher in 2023 than previously thought</a></li></ul><p>Markets:</p><ul><li>Gold up $6.50 to $1795</li><li>US 10-year yields up 9.6 bps to 3.59%</li><li>WTI crude oil flat at $71.45 after touching $70.06</li><li>S&P 500 down 0.7%</li><li>NZD leads, CAD lags</li></ul><p>The dollar tried to rally on a hot PPI number for the second month in a row but the skeptics one the day as a brief 75-pip rally in USD was quickly wiped out. The UMich numbers also prompted a rally in USD/JPY and some smaller moves elsewhere but that also didn’t last. The led to some further dollar selling but late in the day there was a paring of those moves as stocks sagged.</p><p>At the end of the day, the moves that are left were mostly minor.</p><p>The larger drama was in the oil market where there was a sixth consecutive day of losses for crude. There had been some gains after tough talk from Putin but a closer look at the comments showed a less-aggressive stance than the headline. WTI tried to break $70.00 and came close but couldn’t break through and that led a quick rebound to the upside and flat trade on the day.</p>

This article was written by Adam Button at www.forexlive.com.