Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
News to trade on December 12
- During the early Asian session, comments by US President Donald Trump cheered the markets. He said that he would intervene in Huawei CFO case if it’s good for reaching a great trade deal between the countries and national security. He also noted that negotiations with China have already started via phone. As for Auto tariffs on Japan and EU, they depend on trade negotiations with these countries.However, did not have much effect on the AUD and the NZD due to the strong US Dollar. Positive news on trade deal will help AUD/USD to rise towards the resistance at 0.7260. The risk-off sentiment will pull the pair downwards to the support at 0.7126.
- As for NZD/USD, the risk-on mood can help the pair to recover and stick above the resistance at 0.6890. Otherwise, the strong US Dollar will pull it towards the support at 0.6811.
- The USD got stronger against the JPY and drove USD/JPY towards the resistance at 113.6. If the USD weakens, the first support for the pair lies at 112.909.
- Today we anticipate the release of the headline CPI and core CPI at 15:30 MT time. According to analysts, the headline consumer price index will drop to 0%, while the core CPI will stay at the same level at 0.2%. If the actual data is higher than the forecast, EUR/USD will fall. The first support lies at 1.1260. What can make EUR/USD rise? The successful negotiations between the European Commission president Mr. Juncker and the Italian prime minister Mr. Conte on Italian budget at 17:00 MT time. If the sides will renegotiate on the target of the Italian budget deficit, EUR/USD will rise towards the resistance at 1.1374. Otherwise, it will fall towards 1.1260.
- Great Britain is awaiting the Confidence Vote on the Theresa May’s leadership. The members of the Conservative party will vote on whether they have confidence in the current prime minister at 20:00 MT time. If she loses, the leadership contest will begin and it will increase the uncertainty over the Brexit future. The negative news will pull GBP/USD towards the support at 1.2461. Otherwise, if Theresa May protects her place in the government and increases confidence in the Brexit deal, the pair will stick above the resistance at 1.2559.
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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.
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The Canadian central bank will make a monetary policy report and announce interest rates on Wednesday, January 20, at 17:00 MT time. Also, the BOC press conference will be held later.
USD’s rally takes a pause, while riskier assets are modestly rising.