Last week’s the currency market saw the biggest rise in the value of the New Zealand dollar and the biggest drop in the value of the US dollar. There is a strong trend against the U.S. dollar; meaning, it is an attractive time to be trading Forex. Last week also saw fairly higher volatility in the Forex market, although there were not a lot of news and no surprising economic data releases.
Traders are expecting the US dollar to continue to decline while the commodity currencies (AUD, NZD, and CAD) are stronger and expect to advance. President Trump is still refusing to give in the Presidential election but there seems to be no chance that any of his legal challenges will be successful in changing any of the results so the Electoral College. Joe Biden seems set to confirm as President on 14th December.
Another major story last week was the US has been a reduction in new daily confirmed Covid-19 cases, although hospitalizations and deaths carry on increasing. Several states have announced new lockdowns and other restrictions in an attempt to stem the spread of the virus.
The biggest Covid-19 stories globally right now are the spiky rise in deaths worldwide, and the fact that two major pharmaceutical companies, Pfizer, and AstraZeneca, seem to have a 90%+ effective vaccine almost ready for rollout next month in December.
On the UK-EU Brexit negotiations yet another week passed with negotiators from both sides failing to find common ground. Chances for an unorderly exit from the European Union appear nearly imminent with time quickly running out.
The coming week is likely to bring a similarly moderate volatility to the Forex market. High-impact economic data due over the coming week includes the Reserve Bank of Australia’s monthly policy input and Australian GDP, Canadian employment data, and most importantly of all, U.S. non-farm payrolls numbers.
China will start the week with NBS Manufacturing PMI data. Later on, markets will focus on the RBA interest rate decision. Australia is also expected to release Q3 GDP data. Inflation and unemployment data out of the EU and Germany will come later on. The US will report Manufacturing PMI from ISM on Tuesday. Finally, the U.S. Non-farm payrolls report will cross the wires. Economists expect a 500k gain in jobs according to the Economic Calendar.
Oil traders will tune in the upcoming OPEC+ meeting scheduled to begin on Monday. The focal point in next week’s meeting will be persuading undecided member nations to extend the current round of supply cuts as demand worries remain.
EUR/USD
The currency pair made its peak at the New York close on Friday in more than 2 years, moving up in a concrete bullish trend.
Pullbacks in the short-term will probably continue, so looking for a good price downwards to buy is ideal. We remain bullish, and it certainly looks as if the euro is trying to take off.
FORECAST: LONG
Resistance: 1.1975, 1.2000, 1.2050
Support: 1.1925, 1.1900, 1.1850
AUD/USD
The Aussie continues to be in a bullish trend and it looks like is going to test the 0.74 resistance price. On the downside if it breaks down below the 0.725 price level, then the strategy will have to change towards the 0.71 level
FORECAST: LONG
Resistance: 0.7400, 0.7450, 0.7500
Support: 0.7375, 0.7350, 0.7300
GBP/USD
As always, Brexit headlines will be in focus this week trying to get some kind of deal. Also, the weakening of the US Dollar will come in play.
We expect this week the pair to range between the 1.3400 and 1.3275 price levels
FORECAST: NEUTAL/RANGE
Resistance: 1.3350, 1.3400, 1.3450
Support: 1.3275, 1.3200, 1.3150
GOLD (XAU/USD)
Gold trend remains bearish as the more optimism of an effective Covid-19 vaccine is rising due to the new developments of two major pharmaceutical companies, Pfizer, and AstraZeneca. They are expected to roll out the vaccine within December.
The pair on the RSI looks oversold and is expected this to range as Covid-19 risk has not ended just yet and the vaccines yet to be released and tested globally.
FORECAST: NEUTAL/RANGE
Resistance: 1800, 1850, 1900
Support: 1775, 1725, 1700
USD/JPY
Last week, the dollar yen bounced back from the 103.75 level and peaked 100 pips higher at the 104.75 level. The move was short-lived as the pair moved downwards towards the 104 support level.
The pair this week is expected to carry on the bearish pressure, as the dollar is stressed with all eyes on the Friday’s NFP number.
FORECAST: SHORT
Resistance: 104.25, 104.50, 105.00
Support: 104.00, 103.50, 103.00
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