Market Talk
- The dollar was flat on Friday morning in Asia, holding steady amid small market moves and thin trading volume as U.S. market was closed for the Thanksgiving holiday on Thursday.
- The dollar has been under pressure this week, as riskier currencies benefited from increased optimism over a string of COVID-19 vaccines news reports and hopes for a more stable period in U.S. politics.
- The pound saw a near three-month high as well on Thursday, as investors look towards progress on Brexit talks between the U.K. and the European Union (EU). EU chief negotiator Michel Barnier is reportedly due to speak with some EU fisheries ministers later in the day to discuss the current state of the trade discussions.
- European Central Bank (ECB) chief economist Philip Lane and the minutes from the ECB’s October meeting further confirmed the expected announcement of stimulus measures when the central bank meets in December. The euro saw little change against the dollar but did reach a more than two-months high on Thursday in the wake of the minutes’ release.
- Gold was up on Friday morning in Asia, with the markets digesting potential hiccups on the way to a global vaccination rollout providing a boost. However, increased risk-on appetite pushed prices in the opposite direction.
Chart Focus USD/CAD
Key Points
1. Sell USD/CAD recommendation
2. Sell USD/CAD at 1.3020. Stop at 1.3050 and profit target at 1.2930
3. Optimism of COVID-19 vaccine and higher crude oil price have weighed on the US dollar
4. Price is capped by a strong resistance point and MACD is hinting of a bearish price trend ahead.
Fundamental Comments
1. Optimism over vaccine news has increased risk appetite, moving investors into riskier currencies and away from safe haven US dollar.
2. Higher crude oil price has benefited the Canadian currency.
Technical Comments
1. Price has been capped by the 20EMA and a previous resistance level
2. MACD remains bullish and the fast line is turning down, hinting of a bearish price trend ahead
Key Levels
| Support | 1.2985 | 1.2940 | 1.2905 |
| Resistance | 1.3025 | 1.3070 | 1.3115 |
Technical Overview
USD/JPY – Our stop loss from Monday’s recommendation was stopped out at 104.20. We are out of this position without a loss as we had shifted stop to our entry price. Stochastic is still weak and not turning around as yet despite in the oversold zone. 20EMA is bearish and heading lower while MACD is still bullish. We are looking at price testing the previous low of 103.65 in the next 24 hours.
| Support | 103.90 | 103.60 | 103.15 |
| Resistance | 104.20 | 104.50 | 104.95 |
EUR/USD – Price had broken above 1.1920 to reach a high of 1.1940. Price was again unable to sustain above 1.1920 and declined to 1.1885 overnight. However, price has managed to recover to 1.1920 again this morning. The underlying trend remains bullish as MACD is above the zero line and 20EMA is pointing higher with a steep slope. We remain bullish for 1.2010 in the next few days
| Support | 1.1915 | 1.1890 | 1.1860 |
| Resistance | 1.1945 | 1.1985 | 1.2010 |
GBP/USD – Yesterday, we had raised our stop to entry price at 1.3330 but this was triggered when price reached a low of 1.3321 overnight. We are out of this position without a loss. While our stop was triggered, our view on this pair remains unchanged. We are looking at 1.3321 being the low and another rally to 1.3410 in the next 1-2 days ahead. MACD and 20EMA remain bullish and are both hinting of a bullish price trend ahead.
| Support | 1.3350 | 1.3310 | 1.3265 |
| Resistance | 1.3395 | 1.3425 | 1.3480 |
XAU/USD -We had a sell call at 1818.50 yesterday but price only reached a high of $1818.13. Price has declined to $1806.50 and our view remains unchanged. We are looking for another decline in price to $1790 or $1780 in the next few days ahead. MACD remains bearish and 20EMA is hinting of a bearish price trend ahead. Stochastic has a bearish crossover and is moving lower, hinting of a bearish price trend. A move above $1828 would negate our bearish view.
| Support | 1803.05 | 1790.30 | 1780.00 |
| Resistance | 1812.20 | 1828.90 | 1840.20 |
USD/SGD – Price broke below 1.3400 and has declined to a low of 1.3380. MACD is warning with a divergence and Stochastic is into the oversold extreme. However, 20EMA is pointing lower with a steep slope, hinting of a strong bearish trend. However, we think price could be near to a low and a possible corrective rally could be ahead. A move above 1.3400 would confirm the low and a rally ahead.
| Support | 1..3370 | 1..3340 | 1..3310 |
| Resistance | 1.3400 | 1.3435 | 1.3465 |
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