The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
Market updates on December 3
You will never get bored in the anticipation of the US-China trade deal, as the sides have something to surprise the market all the time. While the major currency pairs have taken advantage of the weak USD, Trump has got something to make us worry. According to his comments, the US-China trade deal may come after the next year’s election. Together with the fresh tariffs against Brazil and France, these announcements will likely determine the market situation now. Pay attention to the risk-weighted currency pairs.
- The Australian dollar has strengthened after the RBA kept its interest rate on hold at 0.75%. On H4, AUD/USD broke the 200-period SMA and rose higher to the November resistance levels. The bullish momentum is supported by the weaker USD, too. Upside targets for the pair lie at 0.6863 and 0.6872. However, judging by Stochastic and RSI oscillators, a reversal is likely to happen soon. Stochastic oscillator formed a crossover in the overbought zone, while RSI is moving within this zone. As soon as it crosses the 70th level upside down, it may provide us a selling opportunity. From the downside, the support levels lie at 0.6836 and 0.6825.
- The kiwi is demonstrating a strong performance, too. NZD/USD is trading at the early August levels and targeting the resistance at 0.6543 on the 4-hour chart. Bulls may try to break this level and target the next resistance at 0.6561. At the same time, the Stochastic and RSI oscillators are overbought here. While RSI is looking down, a stochastic oscillator formed a crossover above 80. That is why we may expect a correction to the 0.6519 level. If this level is broken, the next support will lie at 0.6504.
- USD/JPY has fallen on the comments by the US President Donald Trump. On H4, the pair has been testing the support at 108.82 (200-period SMA). If the downward momentum continues, the next support will be placed at 108.65. From the upside, keep an eye on the 109.04 and 109.2 levels.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.