KVB Market Analysis | 27 Nov: PCE Inflation Data and Tokyo CPI: Impact on USD/JPY Trends

Product: XAU/USD

Prediction: Decrease

Fundamental Analysis:

Spot gold rebounded sharply after hitting a one-week low near $2,605 per ounce, closing above $2,630. Analysts note that while Israel's agreement on a ceasefire with Lebanon reduced safe-haven demand, concerns over the Russia-Ukraine war and Trump‘s tariff plans supported a recovery in gold prices. On Tuesday, spot gold rose about 0.3% to close at $2,632.67 per ounce, after earlier dipping to $2,605.15, its lowest level since November 18. Despite ceasefire news from the Middle East, gold prices managed to rise. Optimism about a ceasefire between Israel and Hezbollah weakened gold's appeal as a safe haven, but fears of a global trade war due to Trump’s tariff threats provided support. Additionally, escalating tensions in the Ukraine-Russia conflict helped limit the downside for gold.

Technical Analysis:

Gold prices remain neutral to bearish after sellers pushed them below the $2,700 per ounce level. Additionally, the price is showing a pattern of lower highs and lower lows. If sellers drive the price below $2,600, it could lead to a test of the 100-day moving average at $2,565, followed by the November 14 low at $2,536. On the other hand, if buyers regain control and push prices above the 50-day moving average at $2,665, it could open the door for a challenge of the $2,700 level. If this level is broken, the next targets would be $2,750 and the all-time high of $2,790. Momentum indicators like the Relative Strength Index (RSI) are trending downward, suggesting that sellers still have the upper hand.

Product: USD/JPY

Prediction: Decrease

Fundamental Analysis:

Investors are watching for the US Personal Consumption Expenditure (PCE) Price Index data for October, set to release on Wednesday. This report will provide clues about the Federal Reserve‘s (Fed) potential interest rate decisions in December. Analysts expect annual inflation to have risen compared to September, with steady growth in both headline and core PCE figures month-on-month. Meanwhile, the Japanese Yen (JPY) remains strong, despite lowered expectations for a Bank of Japan (BoJ) rate hike in December. Political uncertainties in Japan may limit further rate increases. Investors will also focus on Tokyo’s Consumer Price Index (CPI) data for October, due Thursday.

Technical Analysis:

From a technical view, dropping below the 100-period Simple Moving Average (SMA) suggests the USD/JPY pair could decline further. The next support lies near 153.30-153.25, followed by the 153.00 level. If this breaks, it may trigger more selling, pushing prices toward mid-152.00s and eventually the key 200-day SMA near 152.00. On the upside, 154.00 acts as an immediate resistance, followed by the Asian session high near 154.40. A strong move above these levels could lift the pair to the 155.00 mark and the 155.40-155.50 zone. Continued buying might target 156.00 and the November 15 high at 156.75.

Product: BTC/USD

Prediction: Decrease

Fundamental Analysis:

Bitcoin dropped sharply below $92,000, with the “Trump Trade” wiping out $200 billion in market value. However, this didn‘t cause panic or push key indicators into bearish territory. The current long/short ratio shows a bearish bias, as traders are heavily shorting Bitcoin. This imbalance comes with a warning: excessive leverage in the derivatives market could trigger sudden adjustments or even a short squeeze, which might become a hidden catalyst for Bitcoin’s potential rebound. Despite the rapid rise during this bull market cycle, dominant long positions have kept speculation in check. However, any deviation from the bullish trend may create opportunities for short sellers. The outcome？ A short squeeze forces traders to close positions, leading to sharp Bitcoin price drops.

Technical Analysis:

After reaching a record high of $99,609 on November 22, Bitcoin pulled back by 8.2% within four days. This drop caused $250 million in bullish leveraged positions to be liquidated but did not trigger panic or push key indicators into bearish territory. Long-term holders also added to the selling pressure. Historical trends show a similar pattern in late March when Bitcoin repeatedly failed to break the $73,500 level. Profit-taking by some large holders triggered a two-month correction, ultimately pushing Bitcoin to a low of $60,830 on May 1.