Last week was not full of events, but we still saw decent moves in the charts of majors, S&P500, NASDAQ, oil, and crypto. The upcoming week will bring even more volatility to your favorite assets!
Daily News: a lot of comments
- The US dollar index is rising. It is moving to the psychological level of $95 again. Today traders will look at building permits and housing starts data. The forecast is mixed. If the actual data is greater than the forecast ones, the USD will be able to rise more.
- The US and South Korea agreed to suspend military drills as a part of an agreement between the US and North Korea.
- Trade wars tensions are hotter and hotter. Mr. Trump is ready to impose as many tariffs as possible. According to Reuters, he asked a US trade representative to identify $200 billion in Chinese goods for additional tariffs. Mr. Trump said that they will be imposed as soon as China increases tariffs on the US. Let’s wait!
- A lot of info on the Australian dollar. Trade wars tensions are increasing that weighs on the AUD. Moreover, the RBA released its monetary policy meeting minutes. Although nothing new on the aussie was said (“a rise in the Australian dollar would lead to a slower pickup in inflation, economic growth”), however, it affected the AUD as well.
The AUD/USD pair tested the support at 0.7380. 50-hour MA is near to cross the 200-hour MA that is a negative signal for the pair. If today the pair closes below the support, the further fall is anticipated. No important economic data will be released.
A forecast for the aussie isn’t encouraging. The banking group doesn’t see any driver for the AUD because of an uninspiring domestic data flow and a negative perspective on a rate hike. Moreover, trade wars tensions continue to weigh on the AUD. Risks of the housing market may put pressure on the Australian dollar as well. As a result, a fair value for the Australian dollar is 0.73 (let us remind that up to now, AUD/USD is near 0.7380).
ING has also represented its point of view on the Australian dollar. The main threat for the Australian dollar is the US policy. Firstly, the higher short-term US rates weigh on the aussie with the lower interest rate. Secondly, US tariffs on Chinese exports put pressure on the AUD. As a result, the forecast of the company is a consolidation within 0.7400-0.7600 until there are some directional catalysts.
- The euro continues to consolidate within 1.1550-1.1670. No important economic data will be released today. If the pair closes below 1.1550, the further fall to 1.1480 is anticipated. Otherwise, the pair has chances to turn around to 1.1670.
- Trade wars escalate, so the Japanese yen rises. USD/JPY has broken the support at 110.20 (200-day MA) and tested the next one at 109.70. The support at 109.70 is strong (100-week MA). If any tension increases, the pair will fall further. Otherwise, it will return to 110.20.
- Some comments on the Bank of Japan. A former BOJ official thinks that the BOJ should give up on inflation. According to him, the central bank’s policy couldn’t prove its efficiency. He advises the central bank to stop stimulating prices through large-scale bond buying and instead introduce a digital currency, enabling it to accept a new price goal of 0% inflation. Let’s see whether Mr. Kuroda will accept that.
That is all for today. Follow markets news with us!
The US will release the Philly Fed Manufacturing Index – the impactful event for the USD and thus for all the major pairs. It will be out on November 18 at 15:30 MT (GMT+2).
Hong Kong’s HK 50 index rose and the Chinese yuan edged up as traders assess the outcome of the first virtual meeting between US President Joe Biden and Chinese leader Xi Jinping.
ISM Manufacturing PMI will be announced at 17:00 MT (GMT+2) on Wednesday, December 1.
The Eurozone will publish the Indicator of GfK Consumer Confidence on November 25, at 09:00 GMT+2.
The United States will publish the Federal Open Market Committee Meeting Minutes on November 24, at 21:00 GMT+2.