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FTSE down on strong GBP, steady oil
The GBPUSD extended gains to 1.3480. The major driver of this week’s 260 pips rise was the EU/UK agreement on the Brexit settlement. The trend and momentum indicators point at a further rise. The next natural target for the GBPUSD-long positions is 1.3500. The key resistance is eyed at 1.3657, the 2018 high. Support could be found at 1.3370/1.3350 (50, 100-hour moving averages respectively).

The FTSE 100 fell on the lack of enthusiasm in the oil market and a stronger British pound.

Energy stocks (-0.49%) edged lower at the open.

OPEC and Russia agreed to extend their production cut agreement to the end of 2018. Oil prices gave two-sided reaction, but no important levels were breached, provided that the deal was fully priced in. At this point, the best OPEC could do is to meet its target. Therefore, the bias turns on the downside. Failure to clear the $60/barrel resistance could encourage a downside correction in WTI on its June – November rise. The mid-term support is eyed at $55.00 and $52.50 (minor 23.6% and major 38.2% retracement).

Eurozone inflation may have picked up in November

The EURUSD saw buyers at 1.1816, slightly above 1.1805-support defined by the 100-day moving average and 38.2% retracement on November rebound. The Eurozone’s November inflation estimate is due today. The headline inflation may have accelerated to 1.6% year-on-year versus 1.4% printed a month earlier. The core inflation may have advanced to 1.0% from 0.9%. A solid inflation read should be supportive for the euro during a period of hesitation between the hawks and the doves.

US stocks renew record, FANG slump

The S&P500 (-0.04%) closed flat after having traded at a fresh record high on Wednesday. The Dow Jones (+0.44%) renewed record at 23’959.76. As traders wonder whether the US stocks have reached a peak, there are only minor signs of anxiety in the market. The VIX index rose by 6.68%, yet the volatility index is still by its 100-day moving average (10.65%). FANG (Facebook, Amazon, Netflix, Google) erased $60 billion in one session, as capital flew into companies that would benefit the most from the eventual tax overhaul.

Due today, the US core PCE may have accelerated to 0.2% month-on-month, after having stagnated at 0.1% for five consecutive months. An encouraging PCE read could give a minor boost to the US dollar, yet the upside potential could be limited. The probability of a December rate hike stands at a solid 95.9%, but investors are unsure on how fast the Federal Reserve (Fed) would continue raising rates under Jerome Powell’s leadership starting from February.

AUD under pressure

The AUDUSD was better bid on the back of a better-than-expected Chinese PMI data. Both the manufacturing and non-manufacturing PMI hinted at a faster expansion in China's economic activity. Iron ore futures rallied past 2.30%. Despite the AUD-supportive influences, the AUDUSD may not gain a significant bullish momentum to reverse the actual negative trend that has been developing since September. The AU/US 2-year spread is negative, carry traders are nowhere to be found. The upside attempts could rapidly encounter resistance. Offers are eyed at 0.7610 (daily mid-Bollinger band). The 0.75 level is still on the radar.

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