• EUR/USD is set to finish Friday a little softer, but pretty much band in line with where it started the week.
  • EUR/USD has respected its 1.1815-1.1890ish range nicely thus far, reflective of a broader lack of direction in the market this week.

EUR/USD is set to finish the week pretty much bang on where it started it, within 10 pips of the 1.1850 mark. On the day, the pair is around 15 pips or 0.1% lower, with the pair having run into significant selling pressure ahead weekly highs close to 1.1890. Recent trade has become characteristically thin as the weekend approaches. 

EUR/USD indicative of indecisive markets

EUR/USD has traded very nicely within a 1.1815-1.1890ish range this week; buoyed initially by a risk on start to the week given vaccine optimism (Moderna’s update) and a dovish tone from the FOMC and making highs in the 1.1890s, before reversing lower to set lows in the low 1.1800s on renewed fears regarding the worsening state of the global Covid-19 outbreak. Then the pair rallied again on Thursday as US fiscal stimulus talks between the Democrats got going again, testing the weekly highs again before pulling back to current levels.

Moving forward, the balancing act of pandemic and lockdown concerns (USD bullish) versus vaccine optimism, an increasingly dovish tone to FOMC speak and US political uncertainty (likely all USD bearish factors) is set to continue.

How the US Treasury’s decision not to renew emergency Fed lending programmes from 31 December (and to repatriate $455B in funds to the treasury coffers) will affect markets is unclear; a Fed with less ammunition to support the economy might be a USD negative as it might signal slower US growth ahead. Or would that trigger USD upside on the subsequent stronger demand for havens? Meanwhile, the repatriated funds are likely to be used to fund further fiscal stimulus. So does that actually mean faster growth ahead (likely a risk appetite positive)? Or does it take the pressure of Congress to get a new stimulus bill passed (risk appetite negative)?

Either way, the run into the end of the year will be anything but boring; how the pandemic develops and how the Fed and ECB react, how the early vaccine rollout goes, how the Trump to Biden Administration transition (which hasn’t even started yet) goes will all be crucial determinants of future EUR/USD direction.

With stronger global economic growth expected in 2021 following mass vaccinations and a return to normality, as well as better global trade conditions given the Biden Administration’s less protectionist stance, a number of banks are forecasting a weaker USD ahead. This might keep USD’s upside capped in the short-term, even if the pandemic does get significantly worse than expected this winter.

EUR/USD bang in the middle of its weekly range

EUR/USD is finishing the week right in the middle of its range this week. Thus, the most significant upside resistance comes in the form of weekly highs around 1.1890, while the most significant support comes at the weekly lows around 1.1815. A break in either direction next week (or in the coming weeks) will be indicative of either a continuation of the USD weakness we have already seen this November or a pullback on it.

In terms of notable levels outside of this week’s range; to the upside, the next level of note is just beyond the 1.1900 mark, the 10 September and 9 November highs at 1.1919. To the downside, the 11 November lows at just under 1.1750 will be important to watch.

EUR/USD one hour chart

EUR/USD one hour chart

  • EUR?GBP’s reversal finds support at 0.8915, remains within previous ranges.
  • The pound appreciates on Brexit deal hopes.
  • UK macroeconomic data underpins GBP demand.

The euro lost ground on Friday, retreating from Thursday’s high at 0.8965, against a firmer GBP, amid the upbeat comments from Brexit negotiators. The pair, however, has been supported above 0.8915 area and remains moving within previous ranges.

The pound nudges up on hopes of a Brexit deal

The cable has appreciated against its main peers after European Commission President, Ursula van der Leyden affirmed that she had observed progress on the negotiations over the last weeks, with movement on important files.

European and UK representatives have confirmed Van der Leyden’s views suggesting that the positions on key issues are getting closer and that a trade deal might be imminent. These comments have boosted optimism after Thursday’s disappointment when the talks had to be suspended due to a COVID-19 infection.

Apart from that, UK macroeconomic data has contributed to underpin GBP demand. British retail sales increased by 1.2% in October and 5.8% year on year, according to National Statistics. This is the eighth consecutive increase in retail consumption, which confirms the resilience of the sector in times of coronavirus and eases fears about the UK’s economic outlook.

EUR/GBP remains steady above 0.8915 support

From a technical perspective, the EUR/GBP is consolidating above 0.8900 with upside attempts capped below 0.8950. On the upside, above 0.8960 (November 19 high) next area of interest lies at 0.9000 (November 12 and 13 high) and 0.9050/65 where the November 5 and 6 highs meet the 50 and 100-day SMAs.

On the downside, below 0.8915 (November 18,19 lows), the pair might aim a key support level at 0.8860 (September 3, November 11 low). If that level is broken, the next target might be 0.8800/10 (May 4, 11 highs).

Technical levels to watch

 

  • El GBP/USD recupera el terreno perdido para alcanzar niveles antes de 1.3300.
  • Los comentarios optimistas de los negociadores del Brexit impulsan la libra.
  • Es probable que el GBP/USD se extienda por encima de 1.3280 – UOB.

La libra cotizó al alza el viernes, extendiendo su rebote desde los mínimos del jueves en 1.3195 hasta los máximos de la sesión unos pocos pips por debajo de 1.3300, donde los alcistas han perdido fuerza. El par, sin embargo, se mantiene estable por encima de 1.3260.

Libra avanza con la esperanza de un acuerdo del Brexit

La libra ha ganado alrededor del 0.25% en lo que va del viernes, impulsada por una opinión más optimista sobre el resultado de las negociaciones del Brexit. La presidenta de la Comisión Europea, Ursula van der Leyden, ha impulsado el sentimiento del mercado hoy, afirmando que ha observado un “mejor progreso” en los últimos días, con más movimiento en “archivos importantes”.

Los comentarios de Van der Leyden han sido confirmados por los comentarios de representantes británicos y de la UE, sugiriendo que las posiciones se están acercando y que el acuerdo podría ser inminente.

En el frente macroeconómico, las ventas minoristas del Reino Unido han mostrado un aumento mensual del 1.2% y un crecimiento interanual del 5.8% en octubre. Este es el sexto aumento consecutivo del consumo minorista, lo que demuestra la resistencia del sector en tiempos de coronavirus y ha contribuido a aumentar la confianza en la GBP.

Es probable que el GBP/USD aumente más allá de 1.3280 – UOB

El equipo de análisis de divisas de UOB ve a la libra sesgada al alza con espacio para un repunte adicional más allá de 1.3280: “GBP” tiene que moverse y mantenerse por encima de 1.3380 dentro de estos 1 o 2 días o una ruptura de 1.3160 ​​(sin cambios en el nivel de ) indicaría que la GBP no está lista para moverse por encima de 1.3322 ‘. Posteriormente, la libra esterlina cayó a 1.3198 antes de rebotar con fuerza para terminar el día con pocos cambios en 1.3265 (-0.02%). El impulso alcista continúa disminuyendo y, a menos que la GBP pueda mantenerse por encima de 1.3280 en estos 1 o 2 días, la perspectiva de un movimiento por encima de 1.3322 disminuiría rápidamente ”.

Niveles técnicos 

             

  • El USD/CAD ha experimentado una fuerte reversión al alza, habiendo estado cerca de alcanzar nuevos mínimos semanales por debajo de 1.3040.
  • Los comentarios pesimistas de los funcionarios de salud canadienses y el primer ministro Trudeau parecen haber contribuido a agriar el sentimiento del CAD.

El USD/CAD ha experimentado una fuerte reversión desde los mínimos cercanos a 1.3040 recientemente, con el par ahora cotizando en 1.3080 con ganancias de casi 20 pips o un poco más del 0.1% en el día. El USD/CAD estuvo cerca de alcanzar nuevos mínimos en la semana (establecido el miércoles justo por debajo de 1.3040), pero el par ahora se ha revertido para volver a negociarse a niveles en los que ha estado operando la mayor parte de la semana (entre aproximadamente 1.3060-1.3120).

CAD lastimado cuando el Primer Ministro Trudeau insinúa medidas de control de virus más estrictas

Si bien las preocupaciones sobre el Covid-19 han estado en la agenda de los operadores del CAD durante algún tiempo (el USD/CAD, al igual que otras divisas principales del USD, ha sido golpeado esta semana por el optimismo de las vacunas y el pesimismo de bloqueo).

Sin embargo, últimamente el número de virus al norte de la frontera ha aumentado. Los funcionarios de salud canadienses advirtieron hoy que las infecciones diarias por Covid-19 podrían llegar a 60 mil por ciento a fines de diciembre desde sus niveles actuales de 4.8 mil si las personas continúan aumentando su número de contactos diarios. Estas advertencias fueron seguidas por comentarios del Primer Ministro canadiense Justin Trudeau, quien dijo que Canadá está experimentando un “aumento masivo” en los casos y existe el riesgo de que los hospitales se abrumen. Los canadienses tendrían que hacer más para contener el virus de lo que hicieron hace unas semanas, lo que dijo que era frustrante.

Si bien el viernes no se anunciaron las medidas oficiales para frenar la propagación del virus, los mercados ahora están aumentando sus expectativas de que se aplique algún tipo de restricción económica en los próximos días.

Como resumen, también hubo algunos datos canadienses importantes hoy en forma de cifras de ventas minoristas de septiembre, así como datos del índice de precios de viviendas nuevas para octubre. Las ventas minoristas fueron mucho más sólidas de lo esperado con un + 1.1% intermensual (se esperaba un 0.2%), mientras que las ventas centrales aumentaron un 1.0% igualmente fuerte (el esperado también fue del 0.2%). CAD, sin embargo, no se inmutó y se centró más en temas globales.

USD/CAD se aleja de mínimos pero el sesgo bajista sigue intacto

El USD/CAD podría estar muy por debajo de los mínimos y es posible que no haya podido establecer nuevos mínimos semanales a principios de este viernes, pero el par continúa operando dentro de los límites de un canal de tendencia bajista, lo que implica que, muy probablemente, la rutina regrese hacia 1.3000 continuará.

El canal de tendencia enlaza los mínimos del 16 y 18 de noviembre (aproximadamente 1.3065 y 1.3035 respectivamente) y los máximos del 13 y 19 de noviembre (aproximadamente 1.3170 y 1,3125 respectivamente). En el lado negativo, la siguiente área clave serán, por supuesto, los mínimos del viernes en 1.3040, así como los mínimos semanales justo debajo de eso, los cuales deberán romperse en algún momento si la cruz va a continuar hacia el sur. Al alza, la parte superior del canal de tendencia bajista probablemente entrará en juego alrededor de la marca psicológica de 1.3100. Por encima de eso, hay una resistencia clave en forma de los máximos del 16 y 19 de noviembre en 1.3125. Luego está la DMA 21 en 1.3140.

Gráfico horario

 

 

  • GBP/USD regains lost ground to reach levels right ahead of 1.3300.
  • Upbeat comments from Brexit negotiators buoy the pound.
  • GBP/USD likely to extend past 1.3280 – UOB.

The sterling has traded higher on Friday, extending its rebound from Thursday’s lows at 1.3195 to session highs a few pips shy of 1.3300 where bulls have lost steam. The pair, however, remains steady above 1.3260.

Pound advances on hopes of a Brexit deal

The pound has gained about 0.25% so far on Friday, buoyed by a more upbeat view about the outcome of the Brexit negotiations. European Commission President, Ursula van der Leyden has boosted market sentiment earlier today affirming that she has observed “better progress” over the last days, with more movement on “important files”.

Van der Leyden’s remarks have been confirmed by comments of EU and British representatives, suggesting that the positions are getting closer and that the deal might be imminent.

On the macroeconomic front, UK retail sales have shown a 1.2% monthly increase and a 5.8% year-on-year growth in October. This is the sixth consecutive increase in retail consumption, which proves the resilience of the sector in times of coronavirus and has contributed to increase confidence in the GBP.

GBP/USD extra gains beyond 1.3280 are likely – UOB

The FX analysis team at UOB sees the pound biased higher with room for a further rally past 1.3280: “GBP ‘has to move and stay above 1.3380 within these 1 to 2 days or a break of 1.3160 (no change in ‘strong support’ level) would indicate that GBP is not ready to move above 1.3322’. GBP subsequently dropped to 1.3198 before rebounding strongly to end the day little changed at 1.3265 (-0.02%). Upward momentum continues to wane and unless GBP can maintain a foothold above 1.3280 within these 1 to 2 days, the prospect for a move above 1.3322 would diminish quickly.”

Technical levels to watch

 

The FX Research Team at Rabobank has turned more pessimistic about the mid-term outlook for the USD/JPY after this week’s bearish move below104.00 support.

Key quotes

“There are several reasons to suspect that USD/JPY may stay lower for longer. The obvious reason is broad-based USD weakness. However, the Japanese growth outlook may also be a factor.”

“The fact that interest rates are now so low across the G10 changes the dynamic for domestic Japanese investors and this may enhance relative JPY strength going forward.”

“Politics will also play into the outlook for the JPY. Investors will be looking for reassurances regarding PM Suga’s reformist agenda while geopolitical factors suggest that there is scope for the JPY to benefit from safe-haven demand in the medium-term.”

“We a forecasting USD/JPY at 103.00 on a 3-month view compared with a previous forecast of 105.00.”

  • WTI extends gains beyond $42 after Baker Hughes’ report.
  • US active oil rigs declined last week for the first time in more than two months.
  • The market remains cautious with all eyes on the OPEC.

Front-month WTI futures extended their rebound from session lows at $41.65, to return above $42.00 after Baker Hughes reported the first decline on US oil drills in more than two months.

Oil prices appreciate as US rigs drop

Baker Hughes has reported that the active US rigs drilling for oil declined by 5 in the week of November 13 to a total number of 231. This is the first time oil rigs post a negative reading since mid-September and has been welcomed by a market concerned about oversupply amid the grim outlook for global demand on the back of coronavirus lockdowns.

The price of the West Texas Intermediate barrel has appreciated more than $0.40 after the release of the report to hit session highs beyond $42.40. The risk-on sentiment triggered by the announcement of Drugmaker Pfizer about their plan to request an emergency-use authorization for their vaccine has been supportive for oil prices, pushing WTI higher for the third consecutive day.

From a wider perspective, however, WTI prices remain within previous ranges, roughly between $40 and $43. The market remains cautious as the OPEC debates the plan to taper the current output cuts, with all eyes on the November 30 meeting where the worlds’ mail producers are expected to come up with a specific program.

Technically speaking, the pair has reached intra-week highs at $42.40 where bulls might find resistance. If that level is breached, the next target would be $43 (November 11 high) and late August highs at $43.80. On the downside,, immediate support lies at $41.60 intraday lows, and below there, $41 (November 18 low) and below here, at  $40 (psychological level and November 13, 16 lows).

Technical levels to watch

 

  • NZD/USD bulls pushed the cross above the Q1 2019 double top on Friday, pushing the pair to its highest levels since 2018 and above 0.6950.
  • Kiwi bulls seem eager to front-run an anticipated strong 2021 for New Zealand, also emboldened by the country’s success against the virus.

NZD/USD is trading just below fresh multi-year highs above 0.6950 (highest level since Q4 2018). The kiwi is the best-performing currency in the G10 today, with NZD/USD trading higher by around 30 pips, or nearly half a percent.

Confident kiwi bulls clearly eager to front-run expectations for strong 2021

No specific New Zealand fundamental news has been on the agenda on Friday, or even really anything this whole week. New Zealand’s better than expected economic recovery thus far in 2020 has left the RBNZ struggling to justify threats to take rates negative in 2021, hence markets priced this out last week. This is a theme that likely continues to work in NZD/USD’s favour, given the increasingly dovish tone of the FOMC this week on the near-term outlook for the US economy increasing the chance of some central bank divergence over the coming months.

Indeed, pressure on the Fed to act is growing amid 1) a lack of fiscal stimulus from Congress (many analysts expect nothing to get done during Congress’ lame-duck session) and 2) the recent decision by the Treasury to not renew emergency Fed lending programmes at the end of the year (meaning the Fed might have to look at other stimulus options). Markets look to be increasingly betting that the Fed will expand the duration of its QE purchases.

Back to the kiwi; with New Zealand a virus-free country (for now) that is heading into the Summer (viruses struggle in the Summer given people spending more time in the better ventilated outdoors), they are not facing the same near-term risks as Northern Hemisphere developed economies, something which might be giving NZD (and AUD, for the same reason) an element of safe-haven appeal (in the short-run at least).

Moreover, with the incoming Biden administration already signalling intent to create a more stable, favourable global trade environment, export-dependent New Zealand is likely to be one of the main beneficiaries of this. These better global trading conditions are still some way off; the world needs to wait for Biden to arrive in office in January and recover from Covid-19 pandemic. But the latter half of 2021 ought to be a good year for the kiwi.

This line of thinking seems to be why kiwi has been this week’s standout performer in G10 FX. On the week, NZD/USD has rallied nearly 100 pips and is up roughly 1.5%.

NZD/USD at highest since 2018

NZD/USD bulls pushed the cross above the Q1 2019 double top on Friday, pushing the pair to its highest levels since 2018 and above 0.6950. The next level to the upside is the Q4 2018 high at 0.6969. Still looking at the pair through a broad lens, the next significant levels of support to the downside are in the 0.6800 region.

Looking at the pair on a short-time horizon; NZD/USD has been gaining within an upwards trending wedge since Thursday’s European morning session. A break below this trendline would open the door to a move back below 0.6900 and towards Thursday lows at 0.6880.

NZD/USD weekly chart

NZD/USD weekly chart

NZD/USD hourly chart

NZD/USD hourly chart

  • USD/CAD has seen a sharp reversal higher, having come close to making fresh weekly lows under 1.3040.
  • Pessimistic commentary from Canadian health officials and PM Trudeau seems to have contributed to the souring of CAD sentiment.

USD/CAD has seen a sharp reversal from lows close to 1.3040 in recent trade, with the pair now trading in the 1.3080s with gains of nearly 20 pips or just over 0.1% on the day. USD/CAD was close to making fresh lows on the week (set on Wednesday just below 1.3040), but the pair has now reversed to trade back to levels it has spent most of the week trading within (between roughly 1.3060-1.3120).

CAD hurt as PM Trudeau hints at tighter virus control measures

Whilst Covid-19 concerns have been on the agenda of CAD traders for some time (USD/CAD, much like other USD majors has been buffeted this week by vaccine optimism and lockdown pessimism), the focus has until now been on the situation abroad rather than the Covid-19 situation closer to home.

However, virus numbers North of the border have been creeping up as of late. Canadian health officials today warned that daily Covid-19 infections could reach 60K per by the end of December from their current levels of 4.8K if people continue to increase their number of daily contacts. These warnings were followed by comments from Canadian PM Justin Trudeau, who said that Canada is seeing a “massive spike” in cases and there is a risk that hospitals could get overwhelmed. Canadians would have to do more to contain the virus that they did a few weeks ago, which he said was frustrating.

Whilst official measures to curb the virus spread weren’t announced on Friday, markets are now upping their expectations for some form of economic restrictions to be enforced in the coming days.

As a recap, there was also some important Canadian data today in the form of retail sales numbers for September, as well as New House Price Index data for October. Retail sales came in much stronger than expected at +1.1% MoM (expected was 0.2%), while Core sales rose a similarly strong 1.0% (expected was also 0.2%). CAD, however, was largely unfazed and more focused on global themes.

USD/CAD off lows but bearish bias still intact

USD/CAD might be sharply off lows, and might have been unable to set fresh weekly lows earlier on this Friday, but the pair continues to trade within the bounds of a bearish trend channel, which implies that, most likely, the grind back towards 1.3000 will continue.

The trend channel links the lows of the 16 and 18 November (at roughly 1.3065 and 1.3035 respectively) and the highs of the 13 and 19 November (at roughly 1.3170 and 1.3125 respectively). To the downside, the next key area will of course be Friday’s lows at 1.3040, as well as the weekly lows just below that, both of which will need to be broken at some point if the cross is to continue to the south. To the upside, the downwards trend channel top will likely come into play around the psychological 1.3100 mark. Above that, there is key resistance in the form of the 16 and 19 November highs at 1.3125. Then there is the 21DMA at 1.3140.

USD/CAD hourly chart

USD/CAD one hour chart

  • La recuperación del AUD/USD desde 0.7250 se estanca por debajo de 0.7320
  • El dólar australiano se aprecia a medida que mejora la confianza del mercado.
  • AUD/USD: Es poco probable que suba por encima de 0.7350 – Westpac

El dólar australiano ha subido el viernes, rebotando desde 0.7250 para recuperar la mayor parte del terreno perdido el jueves, antes de tocar la resistencia en 0.7320. El par, sin embargo, se mantiene firme por encima de 0.7300, rumbo a una ganancia semanal del 0.7%.

El aussie se aprecia en un sentimiento de mercado más brillante

El apetito general por el riesgo observado el viernes, con el mercado cambiando su enfoque nuevamente hacia el progreso de las diversas vacunas COVID-19, ha impulsado al dólar australiano frente a un USD ampliamente más débil.

El anuncio de la farmacéutica Pfizer y BioNTech de que solicitarán a los reguladores estadounidenses una autorización de uso de emergencia ha aumentado las esperanzas de que la vacuna esté disponible a fines de diciembre o principios de enero. Esto ha aliviado los temores anteriores sobre el aumento de los casos de coronavirus que desencadenan un repunte del riesgo en el horario de la sesión europea, que ha perdido impulso durante el horario comercial de EE.UU.

El índice del dólar estadounidense cedió terreno durante la sesión asiática, para volver a los mínimos de la semana en el área de 92.20, aunque ha logrado repuntar, con el apetito por el riesgo disminuyendo durante la sesión estadounidense, volviéndose positivo en el día.

Es probable que el AUD/USD  por debajo de 0.7350 – Westpac

Desde un punto de vista técnico, el equipo de análisis de divisas de Westpac no espera que el dólar australiano llegue más allá de 0.7350: “La combinación de noticias positivas sobre vacunas, producción récord de acero en China impulsa una demanda récord de mineral de hierro y materias primas en general, además de los comentarios de Lowe que ‘ las tasas negativas seguían siendo extraordinariamente improbables en Australia “han elevado la confianza en dólares australianos en las últimas sesiones (…) Todavía vemos nuevos cierres/toques de queda y los pedidos en casa en los EE.UU. y Europa. Vemos al aussie limitado en 0.7350 por ahora”.

Niveles técnicos