EUR/USD fails once again near 1.0950, Fedspeak eyed
EUR/USD pair failed once again to sustain at higher levels and drifted slightly lower on the arrival of the European traders, as dust settles over the US elections aftermath.Currently, EUR/USD trades +0.19% higher at 1.0930, unable to surpass 1.0950 resistance. The EUR/USD pair extends its downside consolidation phase into Europe, wavering back and forth in a 25-pips narrow range last hours. The major maintains the bid tone, although struggles to take on the recovery above 1.0950 levels as renewed market optimism on the back of an unexpected Trump win, keeps a lid on the prices. While further gains also remain limited on the back of a pause in the USD’s corrective slide.Meanwhile, markets digest the incoming poor industrial data from France, as focus shifts towards the US unemployment claims and FOMC member Bullard’s speech scheduled later in the NY session.In terms of technicals, the pair finds the immediate resistance 1.0980 (20-DMA). A break beyond the last, doors will open for a test of 1.1000 (round figure/ 5-DMA) and from there to 1.1039 (10-DMA). On the flip side, the immediate support is placed at 1.0900 (psychological levels) below which 1.0848 (multi-month low) and 1.0820 (March low) could be tested.
GBP/USD drops sharply to 1.2380 as USD extends rebound
The USD bulls jumped back on the bids as we progress towards the mid-European session, sending GBP/USD sharply lower to hit fresh daily lows below 1.24 handle.GBP/USD breaches 10-DMA support at 1.2388The cable witnessed aggressive selling pressure last minutes, largely on the back of resumption of broad based US dollar rally, as renewed optimism on a Trump win continues to underpin the buck.The major stalled its minor-recovery near 1.2450 region and eroded more than 60-pips to now hit fresh daily lows of 1.2380, down -0.22% from its opening price.Moreover, fresh selling in oil prices coupled with a pause in the European stocks rally also collaborated to the downslide in the GBP/USD pair.Amid a data-dry UK docket, risk-trends backed by a Trump win, continue to drive markets, as investors now await the US employment data and Fed official Bullard’s speech for fresh impetus.The pair finds immediate resistances placed at 1.2414 (5-DMA), 1.2450 (psychological levels) and 1.2500 (round number). While supports are lined up at 1.2321 (daily pivot) and 1.2303 (20-DMA) and below that at 1.2250 (psychological levels).
USD/JPY now targets 106.60 Commerzbank
In light of yesterday’s strong rebound from sub-102.00 levels, the pair could now attempt to visit the 106.60 area, according to Karen Jones, Head of FICC Technical Analysis at Commerzbank.“USD/JPY has seen a huge recovery intraday from the low of 101.19 yesterday. This has propelled the market back to the 105.55 May low, which has been eroded. Longer term we suspect that the market is basing and we target the 200 day ma at 106.60 and the 107.49 July high at this stage. The base offers an additional upside measured target to approximately 109.50”.“The bottom of the range is a band bordered by the 100.47 5 month support line and the 99.00 June low. Initial support is the 103.01 55 day ma”.
USD/CAD consolidative below 1.3400, US politics eyed
The greenback is giving away part of yesterday’s strong advance vs. its main rivals and is now taking USD/CAD to a sideline theme below the 1.3400 handle.The pair has deflated from recent multi-month tops above 1.3500 the figure although it seems to have found some decent support in the 1.3260/80 band so far this week.Spot remains vigilant after Donald Trump became the new US President in yesterday’s elections. Market participants are expected to closely follow his potential initial measures, particularly anything related to the Fed and to trade.CAD also remains supported by the so far tepid recovery in crude oil prices despite the recent build in crude inventories as reported by the API on Tuesday and the EIA on Wednesday. The barrel of West Texas Intermediate is currently gaining smalls in the $45.40 region.On the data front, Canadian New Housing Price Index is due along with the usual weekly report on US labour market.As of writing the pair is losing 0.25% at 1.3390 facing the next down barrier at 1.3315 (20-day sma) followed by 1.3260 (low Nov.9) and then 1.3189 (55-day sma). On the other hand, a break above 1.3526 (high Nov.9) would open the door to 1.3575 (50% Fibo of the 2016 drop) and finally 1.3839 (61.8% Fibo of the 2016 drop).
WTI challenges lows near $45.00 following IEA, USD
Crude oil prices are so far snapping a 3-day positive streak today, sending the West Texas Intermediate to test the key support around the $45.00 mark per barrel.The continuation of the buying bias around the greenback is pushing the barrel of WTI to the lower end of the range near the $45.00 handle.Adding to the downbeat sentiment, the IEA said in its monthly report that oversupply in oil markets could extend to next year if the OPEC does not cut its output. The Paris-based agency added that global supply rose to nearly 98 mbpd during October, following record output levels from the OPEC and rising production from non-OPEC countries.In the meantime, prices for the black gold remain resilient so far this week despite the recently reported increase in weekly crude supplies by the API and the EIA and the prospects of a stronger buck.Ahead in the week, markets’ focus will remain on US politics after Trump’s win, while the report on US drilling activity by Baker Hughes is only expected on the data front. At the moment the barrel of WTI is losing 0.35% at $45.11 facing the immediate support at $43.07 (low Nov.9) followed by $42.55 (low Sep.20) and finally $41.10 (low Aug.11). On the upside, a breakout of $45.95 (high Nov.9) would aim for $46.07 (100-day sma) and finally $47.62 (20-day sma).
What this means for the rest of the world Commerzbank
Research Team at Commerzbank, suggests that the Trump’s election as US President comes as a shock to most Western countries as Trump stands for positions most people in the EU consider to be at the right fringe of the political spectrum.“Trump stands for a culture shock. Other countries should mainly be affected in two policy areas.“Foreign trade policy: Trump is a declared opponent of free trade. Not only Mexico, Canada and China will suffer from this. Rather, he will cause severe damage to the entire world trade order. Global trade, which in price-adjusted terms has already been stagnant for two years, will surely not return to its former dynamic under a President Trump. The export nation Germany will feel the impact when the current consumption-driven upturn runs out in a few years.”“Security policy: In summer, Trump had raised doubts about NATO’s security guarantees for its Baltic members. A President Trump will weaken NATO, and this could entice Russia to stoke new conflicts in Europe. This is a considerable risk.”
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. We assume no liability for any loss arising from any investment made based on the information provided in this communication.