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The main focus for today will be on the rate decision and the press conference by the ECB. Traders are awaiting the comments by the ECB president Mario Draghi on the recent slowdown in the biggest economies of Eurozone: Germany, France, and Italy. Analysts anticipate the ECB to acknowledge weaker growth and inflation outlook. If Mr. Draghi sounds unconfident, the EUR may fall. On the other hand, his positive tone will push the EUR up.
Also, the recent news on the trade talks between the US and China and the US shutdown worries resulted in mixed trading of the USD/JPY pair. Today, the Senate will vote on a pair of bills that could end the month-long partial shutdown. Optimistic news on that matter may push the USD up against the Japanese yen.
Let’s look at how the EUR has been trading against the USD.
As we can see on the daily chart, the pair has been trading below the 50-day MA. According to the parabolic SAR, the trend for the pear is bearish. A successful break of the current downtrend may push EUR/USD up. Otherwise, the pair will continue to decline.
Let’s look at the H4. As we can see, the possible dovish tone of the ECB is already priced in, as the pair has been falling down. If the pressure continues, the pair may stick below the support at 1.1344. The next support is placed at 1.1330. If Mario Draghi’s statement contains supportive data, the pair will rise. The next resistance lies at 1.1402. The break of this level will push the pair to the next resistance at 1.1410.
As for USD/JPY, the month-long uptrend for the pair is still on. On H4, if the pair gets positive momentum, it will rise to the resistance at 109.872. The next resistance is placed at 110.45. Otherwise, if the negative news on the shutdown is released, the pair will fall to the support at 109.395. The next support is placed at 109.214.
For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
The higher prices seen today are generally related to the pandemic, that’s no doubt. US consumer prices jumped in October at the fastest pace in three decades putting the Biden administration on the defensive and increasing prospects that the Federal Reserve will raise interest rates next year. Jerome Powell says Fed will discuss speeding up bond-buying taper at the December meeting. What does it mean for markets?
It seems like most of the assets have joined Black Friday's sell-off with global indices, risky currencies, and commodities going down.
More reports, the start of a rally in crypto, outlook for gold and forex. This week is full of impactful releases, and we are here to trade on them.
Gold is about to break the most significant support. The US dollar index keeps gaining momentum. However, the situation might change this week, and we might see a tiny correction. Investors might return to risk-on and push the US stock market indices and cryptocurrencies to the upside. These and more trade ideas are in our new weekly video! Do not miss it!
This week is likely to be pivotal for many assets, including gold, USD, and several stocks. However, we need to be focused and react fast to the ever-changing environment to get the most from it.
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