The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now.
Market updates on December 2
Key events ahead:
German Markit Manufacturing PMI Final – 10:55 MT time (08:55 GMT)
American ISM Manufacturing PMI – 17:00 MT time (15:00 GMT)
- EUR has started the day with a passive sideways movement. On the H4 chart of EURUSD, the Bollinger’s bands are pinched together. That means most probably the market is gathering power to start a more active movement soon. The MACD is slowly rising and preparing to cross the zero-line bottom-up. Once it is done, that would confirm the market’s intention to make a bullish move. For this scenario, the resistance may be placed at 1.1024 and 1.1029. The supports may be located at 1.1003 and 1.0990.
- USDJPY made a rise to the level of 109.70 this morning and bounced down. On the H4 chart of USDJPY, the Stochastic is preparing to enter the overbought zone, while the MACD is within the peak level. These indications mean that the price is likely to keep rising or move sideways for a while, before dropping. Once the Stochastic’s fast line crosses the slow one upside-down above the 80% level and the MACD rises above the signal line, that would be a signal that the market is overbought and it is time to open shorts. In this case, the support may be placed in the range of 109.45 – 109.41. The resistance may be kept at 109.70.
- USD is in an indecisive mode against the CAD so far. On the H4 chart of USDCAD, the price is continuing the sideways movement that has been in place since last Wednesday. The Bollinger’s compressed bands and the MACD’s low magnitude movement right at the zero-line show that the market is consolidating before making a stronger move in either direction. The support may be located within the range of 1.3271 – 1.3262. The resistance levels may be placed at 1.3297, 1.3308 and 1.3324.
On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies.
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This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.