The British monthly GDP is announced on Friday at 09:00 MT time.
News to trade on November 29
- Yesterday, the Fed Chairman Jerome Powell surprised the market with the dovish speech. According to his comments, he is not likely to continue with gradual rate hikes next year. “Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy" – the key statement from his speech.
Today, we anticipate the release of minutes of the Federal Open Market Committee November’s meeting at 21:00 MT time. We will see whether it can provide some support to the USD.
How did the Fed Chair speech affect the key currency pairs?
- EUR/USD tested the resistance at 1.1378. Dovish tone of the FOMC statement will help the pair to rise towards the resistance at 1.1429. Otherwise, if the statement contains some supportive data for the USD, it will fall towards the support at 1.1284.
In addition, the Italian budget issue still triggers the investors. According to the latest news, the Italian government is not planning to move their deficit target lower than 2.2%. This is a small update from the previous 2.4% level, which also pulls EUR/USD down.
- The British pound followed the same scenario after the dovish Powell. However, the Brexit uncertainties and negative outlooks ahead of the Parliamentary vote on December 11 keep affecting the market. If the FOMC statement shows uncertainty, GBP/USD will stick above the resistance at 1.2832. More negative news on Brexit will pull the pair towards the support at 1.2738.
- The USD suffered losses while trading against the Japanese yen. Positive comments from the American central bank will help the pair to rise towards the resistance at 114.132. In case of dovish tone, the pair will stick below the support at 113.286.
- During the Asian session, the New Zealand dollar slid due to the unchanged Business confidence numbers at -37%. The weak USD can help NZD/USD to rise towards the resistance at 0.6912. Otherwise, it can stick below the support at 0.6844.
- The AUD, on the other hand, was driven by bulls as the risk-on sentiment across the Asian equity markets increased. If the USD is weak, AUD/USD can continue moving towards the resistance at 0.7376. If the risk-off sentiment increases, the pair will fall below the support at 0.7303.
- In other news, oil extends losses ahead of the OPEC+ meeting on December 6. The fears that OPEC+ will fail to deliver the expected output cuts are moving the market. WTI dropped to the last year levels, testing the ground below $50. More comments on output cuts will help it to rise towards the resistance at $52.77. More uncertainties will pull the price below the psychological support at $50.
- As for Brent, it fell below the $60 level. The next support for the crude lies at $55.74. If the bulls take over, the resistance for it lies at $61.68
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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.
The US unemployment claims are out on Thursday at 15:30 MT time.
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.