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Daily Market Analysis From Forexmart.eu

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EUR/USD. November 23, 2020 – Euro reached the level 1.1900

EUR/USD maintains upward momentum, approaching the 1.1900 level. The current quote for the asset is 1.1890.

Emotions after the presidential elections in the United States have gradually subsided and now all the attention of the markets is shifting to negotiations in Congress on a new stimulus package for the American economy. Moreover, support for risky assets at the moment is provided by news on the vaccine. The UK is expected to approve a vaccine from Pfizer this week.

Friday's statistics from the euro area showed that consumer confidence in November deteriorated in line with forecasts: to -18.0 points against the October value of -16.0. For the European Union, the corresponding indicator fell in November to -19.0 points from the previous -16.5. The data is not very positive, but it was quite expected.

Today we should pay attention to the index of business activity in the manufacturing sector in Germany: the indicator rose to the level of 57.9 points, which is better than the forecast of 56.5. Activity in the service sector fell slightly short of the forecast and amounted to 46.2. The composite index of business activity for the entire eurozone came out worse than expected: 45.1 points against expectations of 45.8. However, these data did not prevent the euro from continuing to strengthen.

In the evening hours, the USA will present similar data. However, these data are unlikely to support the dollar, as experts predict a decline in absolutely all business activity indices. Thus, the weakening of the dollar will continue throughout the day.

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EUR/USD. November 24, 2020 – Euro is recovering from yesterday's drop to 1.18

Yesterday the euro rate fell sharply to the level of 1.18, but today the EUR/USD quotes returned to the 1.1880 level.

The dollar was supported yesterday by the statistics from the US, which came out stronger than expected and somewhat reduced the fears of market participants about the downturn in the economy. In particular, the preliminary index of business activity in the manufacturing sector from Markit showed an increase in November to 56.7 points against 53.4 earlier. Business activity in the service sector in November increased to 57.7 points from the previous 56.9.

In the eurozone, by contrast, similar indicators look less optimistic. The index of business activity in the manufacturing sector of the region in November fell to 53.6 points from 54.8 in October. The index of business activity in the non-manufacturing sector in November in the euro area deteriorated to 41.3 points from 46.9 earlier.

At the same time, the euro receives support on the news about the productive development of vaccines against coronavirus - the third option is already known. This restrains the dollar's growth and supports interest in the euro as a risky asset.

Today the macroeconomic calendar is almost empty, only the data on house prices in the United States will attract attention, the growth rate of which may accelerate from 5.2% to 5.5%, as well as the Conference Board consumer confidence index for November (data is forecast to deteriorate).

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Brent. November 25, 2020 – Oil continues to renew highs

The oil market continues to grow, hitting multi-month highs. Brent is currently quoted at $48.50 per barrel.

Prices are supported by hopes for improved economic outlook and increased demand for hydrocarbons. Pharmaceutical companies continue to share positive news of the success of the Covid vaccines, boosting hopes for a fast global recovery and resumption of international travel.

Additional support for oil was also provided by the results of the recent US presidential election, which was won by the representative of the Democratic Party, Joe Biden. The political uncertainty surrounding the elections has significantly decreased, which has given strength to risky assets, which traditionally include oil.

EUR/USD. November 25, 2020 – Euro has renewed its maximum in early September

On Wednesday morning, the EUR/USD pair rose to 1.1930, hitting the high of early September. The European currency is supported by hopes that the coronavirus pandemic will be defeated in the near future. Markets are in anticipation of the imminent production of the Covid vaccine and the recovery of the global economy.

At the same time, the pressure on the dollar came from a weaker than expected value of the US consumer confidence index from the Conference Board. In November, the indicator fell to 96.1 points against the forecast of 97.7 and the previous value of 100.9 points. The current value has become the lowest in the last three months. Such data indicate that the stability of the labor market and the general state of the economy are still far from ideal.

From such data, it can also be concluded that retail sales in December-January will be weaker than forecasts (simply due to less optimism of buyers).

An additional influence on the dynamics of the pair is provided by the news about the readiness of the administration of US President Donald Trump to begin the process of transferring power to Joe Biden.

Today you should pay attention to the block of statistics from the US: GDP for the III quarter, the volume of orders for durable goods in October, the balance of foreign trade in goods for October and the number of initial claims for unemployment benefits in October.

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EUR/USD. November 26, 2020 – Euro will continue to rally

Yesterday, the EUR/USD pair renewed its early September high at 1.1940, later declining to 1.1900.

The European currency is supported by optimistic investor sentiment: the markets expect that an effective Covid vaccine will appear in the near future, which can contribute to a rapid recovery of the global economy.

The short-term strengthening of the dollar yesterday was caused by strong data on new home sales in October: the indicator rose to 999 thousand against the September value of 959 thousand. The positive statistics ended there, and the rest of the US data only disappointed the markets.

In particular, the number of initial applications for unemployment benefits rose again over the week, from 748 thousand to 778 thousand. The GDP level for the third quarter did not change against the previous figure and amounted to 33.1%, which is worse than the forecasted 33.2%. Most disappointing was the data on personal incomes of American households, which fell 0.7% m / m. At the same time, costs increased by 0.5% m / m.

Moreover, at the end of the day, the minutes of the last meeting of the US Federal Reserve System were published, which indicated that the regulator's course was maintained for further easing of monetary policy. Considering all that has been said, we can conclude that the «rally» of the euro will continue in the near future.

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Brent. November 27, 2020 – Oil is correcting after an upward rally

Yesterday Brent began to decline, interrupting the upward rally. Prices failed to hold on to the reached maximum near $49 per barrel and retreated to $47.45. The current quotation is $48.40 per barrel.

Most likely, the driver of the decline was the news that Venezuela, despite the US sanctions, resumed oil supplies to China. This once again caused investors to worry about a possible oversupply of oil.

The Venezuelan state-owned company PdVSA signed a contract with China to resume oil supplies in August this year. And after the publication of the results of the US presidential election, Venezuela apparently decided to ignore Trump's sanctions.

Today is a quiet trading day as the United States continues to celebrate Thanksgiving. Brent will fluctuate weakly around $48.50 a barrel.

EUR/USD. November 27, 2020 – Euro is trading above 1.1900

On Friday, the EUR/USD pair resumed its growth: the current quotation of the asset is 1.1920. Thanksgiving weekend continues in the US, so the dynamics of trading today is rather sluggish.

The euro is strengthening, despite weak data from Germany, published yesterday. The consumer climate index in Germany from the GfK institute for December fell to -6.7 points from -3.1 earlier. This is even worse than predicted, suggesting that consumer sentiment is becoming increasingly pessimistic.

The index of economic expectations fell to -0.2 points from the previous 7.3, which was the worst value since May this year.

Today the macroeconomic calendar is almost empty and the EUR/USD pair will continue to fluctuate slightly above the 1.19 level.

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EUR/USD. November 30, 2020 – Euro continues to rally

The European currency demonstrates steady growth in the trading on Monday, renewing September highs and coming close to strong psychological resistance at 1.20. The current quote for the EUR/USD pair is 1.1983.

The euro is growing despite the negative statistics released last Friday. In particular, the indicator of sentiment in the eurozone services sector in November fell from -12.1 to -17.3 points, while analysts had expected a fall only to -15.5 points. The level of consumer confidence for the same period decreased from -15.5 to -17.6 points.

The main reason for the growth of the EUR/USD pair can be called the general weakness of the US dollar against the background of persisting significant epidemiological risks. In addition, investors expect that with the arrival of the new Joe Biden administration, long-awaited economic reforms will take place, and urgent programs to help the American economy will be approved. And that won't do the dollar any good.

Today we should pay attention to the speech of the head of the ECB Christine Lagarde, the consumer price index for November in Germany, as well as data on the volume of pending home sales in the United States in October.

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GBP/USD. November 01, 2020 – The pound is confidently approaching the level of 1.3300

The British currency continues to show a decline from the 1.3400 highs area. The current quote for the pair is 1.3315.

Investors are still awaiting progress in the Brexit negotiations. Earlier, the head of the European Commission, Ursula von der Leyen, noted that the fate of the trade agreement will be decided this week, while the EU is ready to exit without a deal with Great Britain.

Yesterday, the dynamics of the pound was also affected by economic reports: the volume of consumer lending in October fell by 0.6 billion pounds, but the total number of approved applications increased from 91.454 to 97.5 thousand.

Today we should pay attention to the November house price index from Nationwide and the PMI of the manufacturing sector in the UK. Business activity in the country remained at 55.6 points, while analysts predicted the figure at 55.2. In the US, the manufacturing PMI will also be published and Jerome Powell will speak.

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Brent. December 02,2020 – Oil declines after postponing OPEC+ meeting

During trading on Wednesday, oil recovered somewhat after falling to $46.90 per barrel. The current Brent quote is $47.30.

The pressure on prices increased after OPEC+ postponed until Thursday the final decision on oil production quotas, which will operate from January 1, 2021. The oil cartel was supposed to make the appropriate decision on Tuesday.

Currently, the cumulative reduction in oil production by the alliance countries is 7.7 million barrels per day. OPEC+ planned that from January production will increase by 2 million barrels per day. However, the countries did not reach a consensus during the meeting on Monday due to persistent disagreements between Saudi Arabia and the UAE over countries that were in bad faith in fulfilling the terms of the deal, in particular Russia.

Market participants are looking forward to the outcome of the next meeting: the most likely outcome will be an extension of the current terms of the deal by three months. However, this is unlikely to be enough to offset the negative impact on demand amid the deteriorating situation with the coronavirus in the world, so the sales in the oil market are likely to continue.
 

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EUR/USD. December 3, 2020 – Euro updated its April 2018 high

Quotes of the EUR/USD pair continue to update their highs: the current price of the euro is 1.2125. The last time the couple was at such heights at the end of April 2018.

The euro is being supported by investors' hopes that the US authorities are about to start supporting the economy. After the Democrats and Republicans in the US Congress agreed on the size of the fiscal stimulus program in the amount of $ 908 billion, the markets returned to the hope that support will be provided later this year.

An additional «bearish» factor for the greenback is rumors that the Fed will start a «twist» operation in December with the purchase of long-term bonds. In addition, yesterday's data on the labor market from ADP also disappointed investors: statistics showed the worst dynamics since July. It is reported that employment in the private sector will grow by only 307 thousand, which is worse than the forecast of 433 thousand and last month's figure of 404 thousand.

The RSI indicator has leveled off to a horizontal position, which signals that the pair will adhere to flat dynamics during the day near the 1.2100 level.
 

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EUR/USD. December 04, 2020 – Euro has updated its maximum at around 1.2175

The euro continues to renew its multi-year highs, reaching 1.2175. In November, the growth of the pair was due to the general weakness of the US dollar and increased interest in risky assets. In December, the US currency continues to decline against the background of continuing negotiations on fiscal stimulus in the US Congress.

Democrats and Republicans were finally able to agree on the volume of the aid package, which will amount to $908 billion. At the same time, Joe Biden noted that the American economy will need much more injections.

However, the position of the European currency is rather shaky in the medium term. At the moment, it is the eurozone that is the brake on the world economy, which is confirmed by the recently published statistics on business activity in the region. Market participants assume that the European Central Bank will expand the asset purchase program by at least 500 billion euro at its December meeting and will extend its duration until the end of 2021.

Moreover, the European Union faced problems when discussing the creation of a pandemic rescue fund in the amount of 750 billion euros. Poland and Hungary do not agree with the position of the European Commission, and, possibly, these countries will be excluded from the support program. All of these factors increase political uncertainty in Europe, which could put pressure on the euro in the near future.

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AUD / USD. 07.12 | "Inside bar" above the level of 0.7400

On the daily chart, the Australian Dollar / US Dollar currency pair has formed an “inside bar” candlestick pattern based on the resistance level of 0.7400, giving a signal to buy.

At the end of last week, the AUD / USD price renewed its maximum since August 2018 at 0.7448, after which it went into a slight correction. In the medium term, I would like to see further development of the upward trend.

On the one hand, you can take a closer look at purchases according to the specified pattern, on the other hand, first wait for the development of a correction for a more convenient entry into the market. To make a decision, it makes sense to follow the price behavior and the formation of buy signals on lower timeframes. The next upside target is at 0.7500.

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EUR/AUD. 08.12 | Consolidation between the lines EMA 21 and EMA 60

The euro / Australian dollar currency pair has formed on the daily chart a series of doji patterns above the resistance level of 1.6300, located between the exponential moving averages for 21 and 60 days - EMA 21 and EMA 60.

Earlier, the EUR / AUD price renewed its maximum since November 4, after which it corrected to the nearest strong support level - 1.6300. I would like to see the completion of consolidation and continued growth along the upward trend.

I will monitor the appearance of buy signals. The nearest target is at the level of 1.6400, near the EMA 200 line. The medium-term target for growth is at the level of 1.6500.

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GBP / USD. December 09, 2020 - Pin bar "from the level of 1.3300

The GBP / USD currency pair formed a pin bar reversal pattern on the daily chart, rebounding from the 1.3300 resistance level.

The price of the GBP / USD trading instrument corrected to the line of the 21-day exponential moving average - EMA 21, after which it turned around, giving a buy signal. The pound sterling rose in price amid news of the success of the Brexit negotiations.

Most likely, the correction is over and the pair is ready to continue growing. The immediate upside target is 1.3500, which is in the area of highs since May 2018.

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XAU / USD. December 10.2020 - "Absorption" from the EMA 60 line

At the end of yesterday's trading, the gold / US dollar trading pair formed an engulfing candlestick pattern on the daily chart based on the 60-day exponential moving average line - EMA 60.

The price of the trading instrument XAU / USD has renewed its maximum since November 23 at around 1874, after which it turned around, giving a signal to sell. We failed to consolidate at the level of 1860 and, most likely, the pair will start a new downward wave.

It makes sense to take a closer look at sales according to the specified candlestick pattern. The closest reference for the decline is at 1800, near the EMA 200 line.

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NZD / USD. December 11.2020 - Growth to highs

The New Zealand dollar / US dollar currency pair bounced off the round level of 0.7000 in yesterday's trading and formed an engulfing candlestick pattern on the daily chart, giving a buy signal.

The NZD / USD price rose to the 0.7100 resistance level, which is located in the area of the highs since April 2018. Buyers were unable to overcome the resistance at the indicated level, and today the pair went into a slight correction.

In the medium term, I would like to see continued growth along the upward trend. At the same time, it is better to enter new deals after breaking through the level of 0.7100, the next target is at 0.7200.

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EUR/USD. December 14, 2020 – Euro remains in local highs

Euro continues to feel confident in the area of local highs. The couple is stable, even despite the fact that there is no progress with vaccines as such, however, there is still a strong optimism on the market about an early vaccination, which supports interest in risky assets. The current quote for the EUR/USD pair is 1.2160.

Today the macroeconomic calendar is almost empty. Only the data on the volume of industrial production in the euro zone in October will attract attention: the forecast assumes an increase of 1.8% m/m against a decline of 0.4% m/m in September.

The ECB meeting last week did not please the bears either. The European regulator did not give any signals regarding further monetary policy and the high rate of the single currency. Moreover, the situation with Brexit no longer scares investors, which also allows the euro to remain in the highs.

Experts note that the meeting of the US Federal Reserve may become the only factor that can cool the ardor of sellers. It is known that the Fed is not going to launch a «twist», which, together with the lack of plans for fiscal stimulus, may provide visible support to the dollar.

Brent. December 14, 2020 – Oil returns to February highs

Brent crude oil prices rise on Monday, trading at $50.50 a barrel. The asset is supported by general market optimism regarding the imminent mass vaccination against coronavirus, which should restore global demand for fuel. Vaccinations are starting in the United States today, which gives hope for the lifting of quarantine restrictions in the near future.

Prices were further supported by an explosion on a tanker in a Saudi port, raising concerns about a possible disruption to supplies. Shipping company Hafnia reported an explosion on one of its tankers following an «external unidentified object strike» while unloading at the port of Jeddah.

However, the problem of falling demand is also exacerbated by an increase in supply. On Friday, Baker Hughes announced an increase in the existing oil rigs in the US by 12 units, to 258. Earlier, the OPEC + countries also agreed to increase oil production by 500 thousand barrels, starting in January 2021. Given that the threat of oversupply is becoming more real, a reversal in the oil market could occur at any time.

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EUR/USD. December 15, 2020 – Euro is stable at 1.2170 area

The EUR/USD pair remains stable on Tuesday, trading in the highs just below the 1.2170 level.

Eurozone industrial output statistics for October released yesterday exceeded analysts' expectations, reflecting 2.1% m/m growth. The forecast implied an increase of 1.8%, while a month earlier the indicator rose by 0.1% m/m.

At the same time, the US dollar is under pressure from further actions of the American authorities in the issue of providing financial assistance to the economy. It is noted that a bipartisan incentive plan may be presented at the Congress level in the coming hours. We are talking about an amount of $908 billion, and the financing will most likely take place in 2 stages.

Today we should pay attention to the data on the volume of industrial production in the US for November, the degree of utilization of production facilities, import prices and the index of business activity in the manufacturing sector in New York. Experts predict that the rate of decline in American industry may slow down from -5.3% to -5.0%. And although the scale of the slowdown is extremely small, this data may be a reason for the dollar to strengthen by the end of the day.
 

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Brent. December 16, 2020 – The oil market is growing despite a number of negative factors

Oil prices continue to remain stable above $50 a barrel, ignoring all the fundamental factors that could cause a corrective pullback.

First, according to the OPEC forecast, oil demand in 2021 will remain low, and oil consumption worldwide will average 97.3 million barrels per day in the IV quarter of the year. By comparison, in 2019, the same figure was recorded at over 100 million barrels.

The International Energy Agency (IEA) has similar views, which has lowered its forecast for a recovery in demand in 2021 by 170 thousand barrels per day – to 5.7 million barrels per day.

Secondly, an increasing number of countries in Europe and states in the US are tightening coronavirus restrictions during the Christmas and New Year periods, which will also negatively affect oil demand.

Today we should pay attention to the data on changes in US oil reserves last week. Analysts predict a drop in US oil inventories by 1.9 million barrels, an increase in gasoline inventories by 2.6 million barrels and an increase in distillate stocks by 1.1 million barrels.

EUR/USD. December 16, 2020 – Euro broke through the level of 1.22 on expectations of the results of the US Federal Reserve meeting

The European currency continues to renew its multi-year highs, breaking the 1.22 mark. The currency was supported by the news that Germany from December 23 will issue a permit for the use of vaccines from Pfizer and BioNTech, as well as strong statistics from the euro area.

The main event of the day today will be the announcement of the results of the US Federal Reserve meeting. Market participants are almost sure that after a large-scale expansion of the ECB's quantitative easing program, it is highly likely that the Fed will take similar steps. And this is an extremely negative factor for the US currency rate.

Moreover, the situation on the labor market in the United States is noticeably worsening: the current indicators indicate not only a slowdown in the pace of its recovery, but also an increase in unemployment.

From the economic reports today it is worth highlighting the data on the index of business activity in the manufacturing sector in Germany: the indicator came out better than forecast (58.6 points against the forecast of 56.4). The similar index in the service sector also increased (47.7 against the forecast of 44.0 points). Moreover, business activity throughout the eurozone also showed an increase in all indicators, which was another positive factor for the euro exchange rate.

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Brent. December 17, 2020 – Oil has updated the maximum in 9 months after the US Federal Reserve  meeting

Brent crude hit a 9-month high on Thursday after the Energy Information Administration (EIA) reported declining US inventories last week. The current Brent price is $51.80 per barrel.

According to yesterday's statistics, crude oil inventories in the United States fell by 3.135 million barrels over the week (to 500.1 million barrels), which was better than the forecast for a decrease of 1.9 million.

Additional support to the asset is provided by some progress in the discussion of the issue of fiscal stimulus in the US Congress, as well as strong demand for oil in Asia. American lawmakers yesterday came close to an agreement on measures to support the economy in the amount of $900 billion.

At the same time, the US dollar was again under pressure. This time, the driver of the weakening of the currency was the results of yesterday's meeting of the US Federal Reserve: the regulator kept the rate at 0-0.25% per annum, while predicting that the rate would remain at this level until 2023.

GBP/USD. December 17, 2020 – Sterling has renewed its maximum in 2.5 years

The British currency continues to update maximum after maximum. The current quote for the GBP/USD pair is 1.3570. The last time such values were recorded in mid-May 2018.

The pound is growing amid weakness in the US dollar and strong business activity in the UK. Manufacturing activity in the country in November rose to 57.3 points after rising to 55.6 in October. At the same time, activity in the service sector was in the red zone.

Further support for the pound is provided by the progress in negotiations between the UK and the EU on the controversial Brexit issues. The head of the European Commission, Ursula von der Leyen, said that there is «a way to an agreement» and in fact, the deal could be concluded in the next few days. Moreover, Britain has signed a customs agreement with the United States, ensuring business continuity.

At the same time, the results of yesterday's meeting of the US Federal Reserve System exerted strong pressure on the dollar rate. The US regulator kept the target range for the federal funds rate at 0-0.25% and said it intends to maintain this range until conditions in the labor market reach peak employment levels and inflation approaches 2%.

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