EUR/USD testing lows near 1.0520 ahead of IFO
The demand for the single currency remains subdued on Thursday, with EUR/USD challenging daily lows in the 1.0530/25 band.The pair stays under heavy pressure and vulnerable to extra downside as the greenback not only remains firm, but it keeps pushing higher in terms of the US Dollar Index, which clinched fresh 13-year tops near the 102.00 handle in early trade.In the meantime, spot is on its way to close its third week with losses, so far including a new YTD low and with the likeliness of deeper pullbacks in the near to medium term.USD appears well supported by expectations of a rate hike by the Federal Reserve at its meeting next month already priced in by market participants – particularly after yesterday’s FOMC minutes, which have once again reiterated the solid performance of the labour market.Later in the session, November’s IFO Survey in Germany is expected to come in in line with the previous month’s readings, whereas markets across the pond will be closed due to the Thanksgiving Day holiday. The pair is now losing 0.27% at 1.0524 and a break below 1.0519 (low Apr.13 2015) would open the door for 1.0457 (2015 low Mar.16) and then 1.0332 (monthly low January 2003). On the other hand, the initial resistance aligns at 1.0660 (high Nov.22) followed by 1.0763 (high Nov.16) and finally 1.0826 (high Nov.14).
GBP/USD further consolidation lies ahead UOB
In view of FX Strategists at UOB Group, Cable could face more consolidation in the near-term, likely between 1.23 and 1.26.“The strong support indicated at 1.2355 yesterday held as GBP rebounded quickly after touching a low of 1.2360. While lacking in momentum, the rebound appears to have room to extend higher but any up-move is expected to face stiff resistance at 1.2485 (followed by 1.2510/15 high seen earlier this week)”.“As highlighted yesterday, despite the strong rebound from the Monday’s low of 1.2313, it is too early to expect to a sustained up-move. The strong pull-back yesterday reinforces our current neutral view and we continue to expect GBP to trade choppily, likely within a broad 1.2300/1.2600 range”.
USD/JPY aiming to retest Wednesday multi-month high
The USD/JPY pair was seen building on to overnight strong gains and is now inching closer to yesterday's eight-month highs.Currently trading around 112.80 region, the pair on Thursday gained traction from disappointing Japanese manufacturing PMI print. The preliminary release of Nikkei Manufacturing PMI for November remained in expansion territory and came-in at 51.1, but fell short of consensus estimates anticipating a reading of 51.7. The reading was also lower-than 51.4 recorded in October. Meanwhile, the US Dollar extended Wednesday's upbeat US durable goods orders-led up-move, which was further supported by FOMC meeting minutes that reinforced market expectations for a December Fed rate-hike action. With a scheduled holiday in the US, on the back of Thanksgiving Day, traders are likely to remain on the sideline amid thin liquidity conditions. Hence, the broader market risk-sentiment surrounding equity market will derive the safe-haven demand and might provide some impetus for the major. From current levels, 113.00 round figure mark is likely to act as immediate resistance above which the pair is likely to extended the up-move further towards 113.70-80 (late March highs). On the flip side, weakness below 112.40 region (session low) might trigger a corrective slide, even below 112.00 round figure mark, towards testing 5-day SMA support near 111.65-60 region.
USD/CHF sits at 9-month highs, 1.02 a whisker away
Despite a minor-retreat in the US dollar against its major peers, USD/CHF is seen clinching new nine-month highs, as markets digest latest comments from SNB Chairman Jordan.Currently, the USD/CHF pair edges 0.27% higher to trade near the highest levels since February this year, reached at 1.0190. The bulls remains in command, as broad based US dollar strength remains a key theme so far this Thursday, and now look to regain 1.02 handle, as SNB Chairman Jordan’s jawboning attempts provide extra legs to the rally in USD/CHF.SNB’s Jordan reiterated the rhetoric that the Swiss franc remains significantly overvalued and that the central bank is prepared to intervene in currency markets whenever necessary. Meanwhile, the US dollar index advances +0.14% to 101.87, moving-off lows struck at 101.78 in the last hour.To the upside, the next resistance is located at 1.0200 (zero figure) and above which it could extend gains to 1.0254 (Feb 2016 high) and 1.0311 (Dec 2015 high) next. To the downside, immediate support might be located at 1.0132 (5-DMA) and below that 1.0000 (parity) and from there to 0.9938 (20-DMA).
USD/CAD flirting with highs near 1.3520
The greenback is extending its upbeat mood into the second half of the week, with USD/CAD now looking to keep business above the 1.3500 handle.Spot is advancing for the third consecutive session so far, sticking to levels around the 1.3500 handle after climbing as high as 1.3520 during overnight trade.The demand for the greenback has pushed the US Dollar Index to fresh 13-year tops in levels just shy of the key 102.00 barrier, albeit receding some ground after the Asian trading hours.Somewhat limiting the downside, prices for the West Texas Intermediate are posting small gains so far today, retreating from recent peaks and finding some buyers around the $48.00 mark.Nothing scheduled in the data space in Canada, whereas US markets remain closed due to the Thanksgiving Day holiday.As of writing the pair is advancing 0.17% at 1.3514 and a break above 1.3566 (high Nov.18) would expose 1.3575 (50% Fibo of the 2016 drop) and finally 1.3590 (high Nov.14). On the other hand, the immediate support lines up at 1.3374 (low Nov.22) followed by 1.3311 (38.2% Fibo of the 2016 drop) and finally 1.3260 (low Nov.9).
NZD/USD well-offered near 4-month lows
Having dropped to four-month low near 0.6970 region, the NZD/USD pair has managed to bounce-off session low but was seen struggling to recover back above 0.70 psychological mark.Currently trading around 0.6980 level, the pair remained well-offered for the second straight session amid broad based greenback strength led by Wednesday's strong US durable goods orders data and hawkish FOMC meeting minutes. The minutes revealed that policymakers agreed to raise rates "relatively soon" against the backdrop of improving labor market conditions and expected inflation trajectory and reaffirmed market expectations of December Fed rate-hike action, which continues to underpin the greenback and weigh on higher-yielding currencies - like Kiwi.Meanwhile, the pair seems to have found some support at lower levels as traders seemed reluctant to build fresh short-positions amid holiday thinned liquidity conditions, which might limit any sharp moves on Thursday. Immediate downside support is pegged at 0.6955-50 region (July lows) below which a fresh leg of weakness might drag the pair below 0.6900 handle towards its next major support near 0.6870-65 area. On the upside, any recovery back above 0.70 psychological mark might now confront resistance at the very important 200-day SMA near 0.7030 region, which if cleared might trigger a short-covering bounce back towards weekly highs resistance near 0.7080-85 region.
Gold hits fresh nine-month low at $1180
Gold held on to Wednesday's steep losses and dropped to hit a fresh multi-month lows during early European session on Thursday. Currently trading around $1182 region, the yellow metal's early attempted tepid recovery bounce to $1190 got sold into amid broad based US Dollar strength as market now seemed convinced that the Fed on December Fed rate-hike expectations and is weighing on dollar-denominated commodities. On Wednesday, the metal came under intense selling pressure after strong US durable goods orders provided an additional boost to the prevalent bullish sentiment surrounding the greenback. Adding to this, hawkish FOMC meeting minutes fueled faster Fed rate-tightening cycle and further dented demand for non-yielding precious metal. Subsequently, the metal tumbled below $1200 psychological mark and dropped to its lowest level since Feb. Going forward, the commodity remains dependent on USD dynamics, while broader market risk-sentiment might also contribute to the metal's price-action on Thursday amid thin liquidity conditions on the back of Thanksgiving holiday in the US. A follow through selling pressure below $1180 immediate support, the downslide is likely to get extended immediately towards $1169-68 support area before the metal eventually drops to test $1156-55 support area. Meanwhile on the upside, any recovery beyond session peak level of $1191 now seems to confront strong resistance at $1200 handle above which a bout of short-covering could boost the commodity further towards $1210 strong resistance.
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. We assume no liability for any loss arising from any investment made based on the information provided in this communication.