EUR/USD off-lows, reverts to 1.0600 ahead of German CPI
A renewed selling-wave seen behind the EUR/USD pair appears to have lost pace just below hourly 100-SMA at 1.0585, with the bulls now lifting the major back to 1.06 handle.Currently, EUR/USD trades -0.13% lower at 1.0600, retreating from session lows reached at 1.0582 some minutes ago. The main currency pair moved-off lows and climbed back to 1.06 handle, as the renewed uptick in the US dollar versus its main competitors faded, as cautiousness sets in heading into a busy economic calendar ahead. The common currency now eagerly awaits the German prelim CPI data due later this session, with markets expecting the German inflation to come in a tad softer than the previous reading of 0.2%.While in the NA session, the US Q3 prelim GDP report, consumer confidence numbers and Fedspeaks will hog the limelight. Fed officials Powell and Dudley are scheduled to speak on US economic growth at separate events later on Tuesday.In terms of technicals, the pair finds the immediate resistance 1.0621 (daily pivot). A break beyond the last, doors will open for a test of 1.0685 (weekly high) and from there to 1.0700 (round figure) On the flip side, the immediate support is placed at 1.0561 (Nov 28 low) below which 1.0535 (Nov 25 low) and 1.0515 (multi-month low) could be tested.
GBP/USD clinches highs near 1.2460 post-data
GBP/USD has leapt to the area of session highs near 1.2460 following the UK releases today.The pair has rapidly climbed to the mid-1.2400s after upbeat results from the UK docket showed Mortgage Approvals rose 67.52K during October, BoE’s Consumer Credit rose nearly £1.62 billion during the same period, M4 Money Supply rose 1.1% on a yearly basis and Net Lending to Individuals rose 4.9 billion, all prints have come in above expectations.Spot has thus extended the rebound from recent lows in sub-1.2400 levels despite the generalized lack of direction in the global markets and the recovery of the US dollar.Later in the NA session, the pair will remain under scrutiny in light of the release of US advanced Q3 GDP, Consumer Confidence tracked by the Conference Board, the S&P Case-Shiller index, PCE during Q3 and speeches by NY Fed W.Dudley (permanent voter, neutral) and J.Powell (permanent voter, neutral).On the positioning side, GBP speculative net shorts have dropped to the lowest level since mid-September, while Open Interest stayed at 4-week lows during the week ended on November 22 according to the latest CFTC report, reflecting the better tone seen in GBP in past weeks. As of writing the pair is advancing 0.27% at 1.2449 and a breakout of 1.2526 (55-day sma) would expose 1.2533 (high Nov.28) and then 1.2675 (high Nov.11). On the other hand, the next support is located at 1.2308 (low Nov.21) followed by 1.2297 (low Nov.18) and finally 1.2081 (low Oct.25).
USD/JPY hits fresh session peak at 112.70
Having posted a session low near 111.60 region, the USD/JPY pair regained traction and is now building on momentum back above 112.00 handle.Currently trading around 112.65-70 region, testing daily peaks, the pair has now reversed majority of Monday's corrective slide amid resurgent US Dollar strength, following a brief consolidation in the previous two trading sessions. The prevalent risk-on mood, as depicted by recovery in European equity markets, is seen denting the Japanese Yen's safe-haven appeal and supporting the bid tone surrounding the major. The pair's ongoing momentum, however, runs the risk of a sudden reversal in investor sentiment amid prevalent uncertainty around OPEC output deal and the Italian constitutional referendum. Meanwhile, today's US economic releases that include - revised US Q3 GDP print and Consumer Confidence index, coupled with speeches from FOMC members - William Dudley and Jerome Powell, might provide fresh impetus during NA trading session. Omkar Godbole, Editor and Analyst at FXStreet, notes, "A rounding top candle on Friday, followed by a bearish candle on Monday suggests a temporary top is in place at 113.90, although a deeper retracement appears unlikely as of now, given the 5-DMA and 10-DMA are still sloping upwards."He further adds, "Fresh demand is anticipated on dips below the 10-DMA level of 111.46; while a daily close today above 5-DMA of 112.55 would open doors for a revisit to 114.00 levels later this week."
NZD/USD making a fresh attempt to reclaim 0.7100 handle
The NZD/USD pair maintained strong bid tone for the third straight session and was seen building on to the ongoing recovery momentum from its worst levels in nearly 4-months. Currently trading around 0.7090-85 region, the pair on Monday moved back above the very important 200-day SMA and subsequently tested 0.7100 handle. On Tuesday, the pair was seen attempting a fresh move towards conquering 0.7100 handle amid broad based US Dollar consolidation phase near last week's multi-year highs.Traders now look forward to today's US economic docket featuring the release of revised US Q3 GDP growth and consumer confidence for short-term trading opportunities. Also in focus would also be speeches from couple of FOMC members - William Dudley and Jerome Powell, which would looked upon for clues over the Fed's near-term monetary policy outlook, beyond December meeting, and might infuse additional volatility during NY trading session. On Wednesday, RBNZ's Financial Stability Report and RBNZ Governor Graeme Wheeler's speech would be in focus during early Asian session. However, this week's monthly jobs report from the US (NFP) remains the key event risk and could be the next big fundamental trigger determining the pair's trajectory in the near-term.Sustained move above 0.7100 handle now seems to boost the pair immediately towards 0.7120 en-route 0.7140 strong horizontal resistance. On the flip side weakness below 0.7060 area might now drag the pair back towards 200-day SMA support near 0.7035 region below which the pair is likely to turn vulnerable to break through 0.70 psychological mark and aim towards retesting recent multi-month lows support near 0.6970 area.
AUD/USD offered below 0.7524/82 Commerzbank
In opinion of Karen Jones, Head of FICC Technical Analysis at Commerzbank, the Aussie dollar remains offered while below the 0.7524/82 band vs. the greenback.“AUD/USD’s recovery off its November low at .7312, made close to the June 24 low at .7310, has halted at the 38.2% retracement at .7490 and we look for the 200- and 55-day moving averages at .7524/82 to cap. While capped here, AUD/USD remains offered”.“Support below the .7312/10 area comes in between the mid-June low and 78.6% Fibonacci retracement at .7287/81. Further down lurks the May low at .7146. We view AUD/USD as having topped and eventually expect it to slide back to the .6828 January low”.
AUD/JPY tests Monday’s high, and then retreats
The cross in the AUD/JPY is seen receding gains, although remains strongly bid amid a sharply USD/JPY rally witnessed during the European session.The AUD/JPY pair now rises +025% to 83.95, although hovers within close proximity to 84 handle, as the bulls remain in command amid a major turnaround in risk conditions, as reflected by a -1.60% drop in the CBOE Volatility Index (VIX), a fear gauge, which suggests risk-on trades are back in vogue. Hence, the yen remains broadly sold-off into a renewed risk-on wave.However, further upside remains capped on the back of ongoing weakness seen behind AUD/USD, which is mainly attributed to heavy selling seen across the commodities’ space, particularly copper and oil prices. Focus now remains on the US GDP release due later in the NA session, ahead of the Australian building consents and private capex data due later in the week ahead. Higher side: 84.25/30 (daily high/ Nov 28 high), 84.92 (daily R2)Lower side: 83.61 (daily low), 83.15 (D-S1)
Oil: Saudi Arabia playing hard ball ahead of OPEC meeting MUFG
Lee Hardman, Currency Analyst at MUFG, suggests that the main event for oil related currencies this week is tomorrow’s OPEC meeting.“According to reports, Saudi Arabia is attempting to pressure Iran and Iraq into accepting a larger share of output cuts. Saudi Arabia has reportedly offered to cut 4.5% from its production levels of about 10.5 million barrels/day in October. But in return Iran must freeze production at about 3.8 million barrels/day; while all members must accept the use of third party production figures published by OPEC On top of that there must also be participation from producers outside the group.”“Saudi Arabia’s energy minister attempted to provide an upbeat outlook for the oil market stating that it will reach balance in 2017 even if there is no intervention by OPEC sending a message to other members that it is prepared to walk away from a deal. We are less sanguine and believe that a failure to reach an agreement to cut production will result in the price of oil and related currencies weakening materially heading into next year. The risk of lower prices for longer should increase pressure on OPEC members to ultimately reach an agreement to cut production.”
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