• AUD and NZD log third straight weekly gain
• GBP continued to fall, but manage to hold support against CHF, JPY, and USD
• USDX traced a double top pattern
The dollar index snapped the three-week rally, currently trading at 96.30. It has failed to settle above resistance zone 96.80-97.00 levels and traced a double top pattern on the daily chart. As long as dollar index close below 97.00 more dollar selling/antipodeans and EUR rally can be expected. The flipside the dollar index downside will be limited this week ahead of the short trading week for US traders (Thursday’s Thanksgiving holiday) it is likely to consolidate between 95.00-97.00$.
NZD was the top G10 gainer after it rose more than 2.00%-its third straight week-which has not seen since April 2018, followed by AUD 1.40%, DKK, EUR and JPY rose 0.70% each. On the flipside, NOK again down by 0.20% but GBP resumed its decline down by more than a percent.
In majors, Brexit fears hammered the GBP whereas technically oversold and the unchanged Italian budged outcome seems the EURUSD price to be holding support for now around 61.8% fib reaction of Jan 2017 low-Feb 2018 high.
The lower dollar tends to support the commodities; we understand there’s an inverse relationship between the value of the dollar and commodity prices. As a result, Palladium up by more than 5.50%, followed by Copper rose 2.50% and Gold and Silver up by nearly 1.30%.
With the Brent oil price corrected over 25.00% from their early-October peak, whereas manage to find the foot and entered oversold levels like EURUSD.
With the limited macroeconomic data risk, the focus of the FX and commodity markets this week would shift to event risk. Data wise our key focus remains on EA and US November PMIs. Besides UK political noise and renewed Brexit headlines remain focus to trade GDP.
Australia: Minutes of November 2018 Monetary Policy Meeting of the Reserve Bank Board 20 November 2018, 11.30 am AEDT, Speech by Philip Lowe, Governor – Trust and Prosperity – at the CEDA Annual Dinner, Melbourne 20 November 2018, 7.20 pm AEDT.
Japan: BOJ Gov Kuroda Speak due to speak at the Paris EUROPLACE International Financial Forum, in Tokyo. (Tue) also, National CPI (Thu).
UK: Bank of England inflation report, 10.00am GMT (Tue)
EZ: Governing Council of the ECB: non-monetary policy meeting in Frankfurt (Wed)
November EZ Flash PMI surveys and estimates of German GDP (Fri)
Advance Report on Durable Goods (Wed) and November Manufacturing PMI (Fri)
It seems testimonies should drive the FX technical landscape in the G10 block and commodities.
Chart of the week: CHFJPY
CHFJPY: Sell below 111.50. We are watching for 110.70 and 108.50. To limit the risk use, stop loss at 113.75
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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