The big picture remains bearish for USD despite corrections
The big picture remains bearish for USD despite corrections
2020-12-17
• Updated
Ichimoku Kinko Hyo
CAD/JPY: The pair is trading below the cloud. Downward pressure would lead the pair to exit further the cloud, confirming a bearish outlook.
Fibonacci Levels
XAU/USD: Gold is trading strongly higher and achieves a full retracement.
US Market View
The Dollar Index fell to its lowest since May 2018, dropping below 90 as progress on a fiscal stimulus package and the promise of loose Federal Reserve policy for years to come encouraged moves into risk assets and alternative assets. U.S. stock markets are set to open higher as negotiators in Washington and Europe grind toward agreement on a U.S. fiscal stimulus package and an EU-U.K. post-Brexit free trade agreement. After a disappointing 1.1% drop in retail sales in November, the market will be looking to the release of data on jobless claims, housing starts and building permits for any further signs of economic weakness. Crude oil prices also hit their highest level since March, with the weak dollar and U.S. government stockpile data helping them to shrug off fears about the near-term demand trajectory.
USA Key Point
ADP Canada Nov employment +40.8K vs -79.5K prior
US Initial jobless claims 885K vs. 818K estimate
US November housing starts 1547K vs 1535K expected
The NZD is the strongest and the USD is the weakest
The Netflix stock (NFLX), with a market cap of $145.17B and a whooping 10 000+% rise since its inception 16 years ago, experienced some turbulence for a short period last year while trading around the $250 share price. However, the NFLX stock quickly recovered and rose to over $300 towards the end of the previous quarter of 2022.
The Crypto market usually also has a rough time in September. Bitcoin lost 12.7% in September 2021, 17.4% in 2020, 17.5% in 2018, 21.4% in 2017 and 45.4% in 2015. The main cryptocurrency increased by 13.3% and 3.95% in 2016 and 2019, respectively.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.