INDIA: Country Wrap: RBI tomorrow, No Cut Expected.
- RBI seems focused on ensuring sufficient liquidity is the in the system, rather than cutting rates.
- Key data metrics mentioned in last RBI statement remain strong, albeit down from prior months.
- Governor has continued to be hawkish in his comments publicly.
- No cut expected tomorrow but the narrative to open the door for potential cuts in 2025.
- See full review:
- https://media.marketnews.com/RBI_Preview_December_2024_FINAL_a6ed4b69a8.pdf?utm_source=email&utm_medium=email&utm_campaign=20241204
- The NIFTY 50 having had three days of positive returns is opening up weaker by -0.26% as traders become more balanced on the possibility of a rate cut from the RBI tomorrow.
- INR: steady again today at 84.73
- Bonds: very quiet start to Thursday with 10YR 6.687%
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Historical bullets
EURGBP TECHS: Trading Above Its Recent Lows
- RES 4: 0.8523 High Aug 22
- RES 3: 0.8499 61.8% retracement of the Aug 8 / Oct 18 bear leg
- RES 2: 0.8464 High Sep 11 and a key resistance
- RES 1: 0.8448 High Oct 31
- PRICE: 0.8395 @ 06:01 GMT Nov 5
- SUP 1: 0.8360/8295 20-day EMA / Low Oct 18 and the bear trigger
- SUP 2: 0.8276 3.382 projection of the Aug 8 - 13 - 14 price swing
- SUP 3: 0.8250 Low Apr 14 ‘22
- SUP 4: 0.8203 Low Mar 7 2022 and a major support
EURGBP traded sharply higher last week, resulting in a breach of both the 20- and 50-day EMAs - a strong short-term bullish development. Price has also pierced a key resistance at 0.8434, the Oct 3 high and a potential trend reversal point. Clearance of this level would strengthen a bullish theme and open 0.8464, the Sep 11 high. Initial support lies at 0.8363, the 20-day EMA. Key support is unchanged at 0.8295, the Oct 18 low.
SCHATZ TECHS: (Z4) Resistance Remains Intact
- RES 4: 107.110 High Oct 4
- RES 3: 107.070 High Oct 24 and the near-term bull trigger
- RES 2: 106.945 High Oct 29
- RES 1: 106.665/789 High Oct 1 / 20-day EMA
- PRICE: 106.565 @ 05:32 GMT Nov 5
- SUP 1: 106.375 Low Oct 31
- SUP 2: 106.315 1.000 proj of the Oct 1 - 10 - 24 price swing
- SUP 3: 106.137 1.1236 proj of the Oct 1 - 10 - 24 price swing
- SUP 4: 106.027 1.382 proj of the Oct 1 - 10 - 24 price swing
A bearish condition in Schatz futures remains intact, although the trend is oversold. Recent weakness reinforced current conditions and the move down resulted in a break of support at 106.580, the Oct 10 low. This confirms a resumption of the bear cycle that started early October and signals scope for a continuation lower near-term. Sights are on the 106.315, a Fibonacci projection. Initial firm resistance is seen at 106.789, the 20-day EMA.
GBPUSD TECHS: Trend Needle Points South
- RES 4: 1.3389 High Oct 1
- RES 3: 1.3274 High Oct 3 and the bull trigger
- RES 2: 1.3175 High Oct 4
- RES 1: 1.3009/3046 20- and 50-day EMA
- PRICE: 1.2962 @ 05:44 GMT Nov 5
- SUP 1: 1.2846/44 76.4% of the Aug 8 - Sep 25 bull leg / Low Oct 31
- SUP 2: 1.2799 Low Aug 15
- SUP 3: 1.2762 Low Aug 13
- SUP 4: 1.2665 Low Aug 8 and key support
The trend condition in GBPUSD remains bearish and short-term gains are considered corrective. Last Thursday’s sell-off reinforces the bear condition. The breach of 1.2908, the Oct 23 low, confirmed a resumption of the bear leg and exposed 1.2846, 76.4% of the Aug 8 - Sep 25 bull leg. It has been pierced, a clear break of it would strengthen a bearish theme and open 1.2799, the Aug 15 low. Initial firm resistance is 1.3046, the 50-day EMA.
