Record Highs in US Household Debt

In the third quarter of 2023, the total household debt in the US saw a 1.3% increase, reaching a new peak of $17.29 trillion.

The rise in debt was seen across various sectors. Mortgage balances climbed to $12.14 trillion, while credit card balances reached $1.08 trillion. Student loan balances and auto loan balances both increased to $1.6 trillion, with the latter maintaining an upward trend that began in 2011. Other balances, encompassing retail credit cards and other consumer loans, remained relatively unchanged at $0.53 trillion.

Delinquency Rates on the Rise

There was also an increase in aggregate delinquency rates, with 3% of the total outstanding debt in some stage of delinquency. Transition rates into delinquency rose for most types of debt, with the exception of student loans and home equity lines of credit.

Donghoon Lee, an Economic Research Advisor at the New York Fed, noted a significant increase in credit card balances in the third quarter. This aligns with robust consumer spending and real GDP growth.

EURUSD Technical Analysis

The EURUSD has rebounded from the 1.06 pivot point, as anticipated. As long as the pair trades above this pivot, it's plausible for the EURUSD bulls to target the 1.081 resistance level.

However, if the pivot is broken and the bears close below it in the 4H chart, the bullish outlook will be invalidated, shifting the bearish target to S1.

GBPUSD

The GBPUSD pair experienced a decline after reaching the significant 1.24 mark. Currently, the pair is delicately poised below the pivot point, testing the resilience of the bullish channel’s median line.

In the short-term, if the GBPUSD price manages to maintain above the crucial 1.225 support level, we could witness a bullish trend. This scenario presents an optimistic outlook for traders who are bullish on the GBPUSD.

However, a break below the 1.225 level could signal a potential downturn, extending the decline to the 1.21 mark, which represents the lower boundary of the bullish channel. This development would be significant for those keeping a close eye on this currency pair.

GBPJPY Forex Analysis: Bullish Trend and Key Resistance Levels

The GBPJPY currency pair is currently trading above the trend line and the significant resistance level of 184.5. The market trend is bullish, as indicated by the Relative Strength Index (RSI), which is consistently above the 50 level. Given the current trend, we anticipate the pair to break the R1 resistance level and aim for R2 as its next target.

The pivot point is providing substantial support to the bullish scenario. However, if this level is breached and the GBPJPY price stabilizes below it, the bullish scenario may no longer hold.

USDCHF

The USDCHF currency pair is currently navigating a 4-hour bearish channel. It’s hovering above a key bullish trend line, marked in red. As long as the pair remains above this trendline, the target could potentially reach the R1 resistance level at 0.908.

However, if the USDCHF closes below this bullish trend line, it could signal a continuation of the downward momentum that began on November 1st. This could extend to the S1 level, followed by the S2 level.

It’s important to note that the bullish scenario appears weaker than the bearish scenario. The likelihood of the USDCHF bears closing below the Ichimoku cloud is high, which could pave the way for lower levels.

Remember, this analysis is based on current market conditions and could change with fluctuations in the market. Always trade responsibly.

EURJPY

The EURJPY currency pair has recently experienced a bounce from the upper line of the bullish flag, as observed in the 4-hour chart. This significant movement has caused the Relative Strength Index (RSI) to flip below the overbought zone. Despite the bullish trend, there's a possibility that the pair might correct the recent gains to the 160.7 support level, also known as S1.

The Euro’s Stagnation: Awaiting a Catalyst

The Euro, Europe’s single currency, has been hovering around the 1.07 mark, seemingly stuck in a narrow band of fluctuation. This pattern has been observed for nearly a week, with the trading range not exceeding 50 to 60 basis points. The market appears to have fully absorbed the 1.07 price level and is now on the lookout for a catalyst that could trigger a significant shift.

In this uncertain climate, investors have understandably been hesitant to make substantial bets, resulting in the exchange rate being confined to a tight range for over a week. This prolonged stagnation carries the risk of a sudden decompression, potentially triggered by the execution of significant stop-loss orders that investors have gradually placed to capitalize on the limited fluctuation range.

Central Banks and Interest Rates: The Unanswered Questions

The future actions of central banks, particularly the Federal Reserve Bank of the United States, remain a topic of speculation. The key question is whether the Federal Reserve has definitively ended its cycle of interest rate hikes. Currently, there is a slim chance of another 25 basis point hike. However, today’s announcement regarding the trajectory of US Consumer Inflation could drastically alter these odds, leading to significant exchange rate volatility.

The European Economy: A Mild Recession on the Horizon?

The development path of the European economy is not expected to hold any surprises. Most scenarios predict a mild recession in the European economy, which undoubtedly hampers the Euro’s attempts to gain strong upward momentum.

Despite these challenges, I would advise maintaining the same strategy and attempting to purchase the Euro following significant dips. The Euro’s resilience and ability to bounce back remain promising.

In conclusion, adopting a wait-and-see approach in anticipation of important announcements is often one of the best strategies. The impact of these economic factors on the economy is a complex issue, with both potential benefits and drawbacks. Understanding these dynamics is crucial for making informed decisions.

GBPUSD Technical Analysis

During today's trading sessions, the GBPUSD pair made a significant jump, breaking out from the bullish flag pattern. Currently, the pair is testing the 38.2% Fibonacci retracement level. If it manages to stabilize above this level, the bulls are likely to set their sights on 1.259, followed by a potential rise to 1.272.

The pivot point at 1.218 lends support to this bullish scenario. As long as the pair continues trading above this level, the bullish outlook remains valid and intact.

EURGBP Analysis

The EURGBP has experienced a decline from the median line of the bullish flag, extending to the 0.869 pivot. Importantly, this level aligns with the lower line of the bullish flag, making it a crucial point to maintain a bullish outlook.

The RSI (Relative Strength Index) indicator, currently hovering above the 50 level, supports the bullish sentiment. If the EURGBP price can sustain above this pivot, an increase in price towards the R1 resistance level is likely.

Conversely, if the EURGBP price closes below the pivot and stabilizes itself at this lower level, the bullish scenario becomes invalid. In such a case, bears might aim to further drive the price down towards the S1 support level.

EURUSD Technical Analysis: Nearing a Key Level

The EURUSD is approaching the upper boundary of the bullish flag in the 4-hour chart, just as anticipated. This critical juncture offers a compelling opportunity for buyers, with risks situated below the R2 level.

Should the R2 mark be breached, it would undermine the current bullish scenario.

GBPUSD Market Outlook

In recent trading sessions, the GBPUSD pair saw a reduction in downward pressure at the R1 level, aligning with the central line of the ongoing bullish flag pattern. Notably, the 4-hour chart of GBPUSD revealed a hammer candlestick formation, indicating a potential shift towards an upward movement. The chart analysis points towards an anticipated push towards the R2 resistance mark.

The bullish outlook is further reinforced by the support at 1.237. However, if this support fails, it's likely that the downward trend that began on November 15th may extend, targeting the 1.228 level as an immediate goal.

GBPUSD Technical Analysis

In line with expectations, the GBPUSD currency pair experienced a bounce back from the top boundary of its bullish flag pattern. This upward movement was further supported by the ADX indicator surpassing the 20 level, indicating an intensifying trend. As the pair holds above the flag's upper line, the bulls targeting GBPUSD are now likely setting their sights on the 50% Fibonacci retracement level as their next goal.

On the flip side, if the pair falls below the 1.24 threshold, it would negate the current bullish outlook, potentially leading to a downward trajectory towards the lows seen in October.