Last week was dominated by the US Elections which resulted in a close to call result with Joe Biden winning the presidency eventually.
This week traders are likely to focus on the worldwide Covid-19 headlines as there is a sharp rise in the deaths globally especially in US and Europe. The US saw record new cases of 132k in a day and deaths reaching an average of 1,200 a day.
Several European countries have imposed new lockdown measures in an attempt to get the pandemic under control. This will have dire economic effects in the months to come.
It is expected that this week is likely to bring a high level of volatility to the Major Forex pairs, possibly exceeding the already high volatility seen last week.
However, there are not high-impact economic announcements due over the week except the U.S. inflation data and monthly policy input from the Reserve Bank of New Zealand.
On Wednesday, French banks will be closed in observance of Armistice Day, Canadian banks will be closed in observance of Remembrance Day and US banks will be closed in observance of Veterans Day.
EUR/USD
Last week the EUR/USD secured a close above 1.1870 and broke above a key price line of 1.1850 on Friday. If the 1.1850 area holds as a support this week, we will possibly see the euro push into 1.1925/50 and even towards 1.2000.
However, fundamentally the rise of cases of the Covid-19 pandemic and the lockdowns imposed will probably delay this extension.
FORECAST: LONG
Resistance: 1.1925, 1.1950, 1.1975
Support: 1.1850, 1.1750, 1.1700
USD/JPY
The USD/JPY gave us a nice move last week with the Yen gaining from the US Election uncertainty which is expected to continue as the new president settles in and also deals with the Covid-19 crisis. The pair closed below 103.40 testing the 103.25 support level. This week the pair is looking to test the 103.00 support extending lower to 102.50 and 102.25.
FORECAST: SHORT
Resistance: 104.00, 104.25, 104.75
Support: 103.25, 103.00, 102.50
GBP/USD
The last week British pound gains were not only attributed to the fall in the dollar election uncertainty, but also thanks to the decision of the Bank of England, to further support the country’s economy last Thursday, by increasing the bond purchase program by £150 billion and bringing it to £895 billion. However, the new lockdown measures ending on the 2nd of December increases the uncertainty to the pound as the local economy will be hit.
There is a strong resistance between the 1.3175 and 1.3150 levels, which is going to be tested again by the current uptrend. On the downside the pound will try and test the support of 1.3075 and 1.3025.
FORECAST: NEUTRAL/RANGE
Resistance: 1.3150, 1.3175, 1.3200
Support: 1.3075, 1.3025, 1.3000
GOLD (XAU/USD)
Last week’s Gold gains, against the dollar we raised above the significant 1950 price level. The move was a result of the US Presidential Election uncertainty and the global coronavirus record cases and deaths.
The bull trend is expected to continue testing next the 1960 and the 1975 consecutively even with a possible push of the Covid-19 crisis. The downside support is expected to hold below 1925 and 1900 level.
FORECAST: LONG
Resistance: 1960, 1975, 2000
Support: 1925, 1900, 1875
USD/TRY
The Turkish Lira is struggling to keep up with the constant feed of negative press on a global political level. Also the recent Biden victory in the US will further pressure the Lira as tensions will rise due to expected sanctions to Turkey’s purchase of the Russian S-400.
USD/TRY has close last week above the 8.5 level and it’s expected to continue the long term strong uptrend. This week the pair is looking to test the 103.00 support extending lower to 102.50 and 102.25.
FORECAST: LONG
Resistance: 8.60, 8.80, 9.00
Support: 8.40, 8.30, 8.00
