EUR/USD in a bearish consolidation phase just below 1.0400
The EUR/USD pair is seen moving back and forth in a narrow range just below 1.04 handle, closely tracking the upside consolidation phase seen in the US dollar against its major peers.Currently, EUR/USD drops -0.15% to 1.0387, having struck session lows at 1.0375 in early trading. The main currency pair is stuck in a tight range and keeps the offered tone intact, as the bears gather pace before the next leg lower amid persistent broad based US dollar strength, in wake of fresh buying interest seen around the US treasury yields.Moreover, a slightly upbeat tone seen around the European equities also continue to exert downward pressure on the euro, keeping any recovery capped in EUR/USD. However, the downside appears cushioned for now, as better-than expected German PPI and Eurozone current account data offer some support to the EUR bulls.Amid a data-dry calendar and thin liquidity conditions the moves in the major be exaggerated, while USD strength continues to dominate markets.In terms of technicals, the pair finds the immediate resistance 1.0418/20 (daily high/ 5-DMA). A break beyond the last, doors will open for a test of 1.0458 (daily R1) and from there to 1.0500 (round figure). On the flip side, the immediate support is placed at 1.0366 (yearly/ 14-yr lows) below which 1.0335 (daily S2) and 1.0300 (key support) could be tested.
GBP/USD hits fresh session lows in tandem with FTSE
The pound came under renewed selling pressure against its American rival as we step into mid-Europe, knocking-off GBP/USD to fresh daily lows of 1.2370 levels.The cable is seen on a gradual decent and looks to test four-week lows reached yesterday at 1.2355 levels, as the London stocks trade with moderate losses and hit the sentiment around the higher-yielding currency GBP.Moreover, a broadly stronger US dollar and rising treasury yields also collaborate to the downslide in GBP/USD. The immediate focus for the major remains on the UK CBI realized sales data due to be reported shortly, while the US calendar remains data-empty today.In terms of technical levels, upside barriers are lined up at 1.2409 (daily high), 1.2438 (5-DMA) and 1.2485 (daily R1). While supports are seen at 1.2355 (monthly low) and 1.2334 (daily S1) and below that at 1.2308 (Nov 21 low).
USD/JPY trims gains, still well bid around 117.90
Having posted a session high at 118.24, the USD/JPY pair trimmed some of its post-BOJ strong gains and has now dropped back below 118.00 handle, albeit maintained strong bid tone. Currently trading around 117.90 level, the prevalent cautious sentiment around European equity market is lending some support to the Japanese Yen's safe-haven appeal and hindered the pair's strong up-move beyond 118.00 handle after BoJ maintained status-quo monetary policy stance. Meanwhile, the US Dollar was also seen making a move back towards last week's 14-year high, supported by Monday's optimistic comments from the Fed Chair Janet Yellen on the US labor market conditions. Moreover, market participants remain convinced that the incoming Trump administration's aggressive fiscal policies will further boost US economic growth and lift inflationary pressure, eventually forcing the central bank to opt for tigher monetary policy stance. Hence, the incoming US macro data, including the final print of US GDP growth, will remain on investors' radar and would help determine the pair's near-term trajectory.The pair is reversing from 118.20-25 immediate hurdle, and hence a follow through selling pressure has the potential to drag the pair back towards 117.20 support area, en-route 117.00 handle before eventually dropping to 116.70 support area. On the upside, 118.20-25 remains immediate resistance, which if conquered should lift the pair beyond last week's 10-month high resistance near 118.66 level, towards testing 119.00 round figure mark.
EUR/GBP cross has been fairly stable Danske Bank
EUR/GBP cross has been fairly stable around the 0.84 figure recently and as such, analysts at Danske Bank think the political risk currently priced on the GBP is at the low end and DB still expect the GBP to come under renewed pressure in the run-up to when Article 50 will be triggered.“We still expect this to happen in March next year. We target EUR/GBP at 0.84 in 1M and 0.87 in 3M. Moreover, we think that the market’s pricing of BoE with a full 25bp rate increase priced in by the end of 2018 is a bit on the hawkish side.”“Longer term, we expect EUR/GBP to stabilise within the 0.84-0.88 range, targeting the cross at 0.86 in 6-12M. As more clarification about the outcome of the Brexit negotiations becomes available, we see a case for GBP strengthening due to positioning and valuation as Brexit uncertainty declines. This represents a downside risk to our 6-12M forecast.”
AUD/USD dumped on DXY recovery & copper sell-off
The offered tone behind the US dollar weakens in mid-Europe, fuelling a fresh selling spiral in the AUD/USD pair towards daily troughs.Currently, the AUD/USD pair drops -0.41% to fresh session lows of 0.7377, having faced heavy supply at 0.73 handle. The Aussie is the weakest amongst the commodities-currencies, having faced double whammy from renewed strength in the US dollar and heavy losses seen in copper prices.Moreover, a retreat in oil prices coupled with softer European equities; also collaborate to a fresh selling-wave seen around the higher-yielding AUD. Meanwhile, the USD index recovers almost entire losses to now trade around 102.85 levels, up from 102.50 lows, while Comex copper futures slump -1.30% to $ 2.53/ pound.Markets also looked past the optimism triggered by upbeat Australian Government's Mid-year Economic and Fiscal Outlook (MYEFO) and narrowing budget deficits, as AUD/USD price action is centered on the USD moves and RO-RO trends amid a data-light trading session today.The pair finds the immediate resistance at 0.7301 (daily tops) above which gains could be extended to the next hurdle located 0.7328 (5-DMA) and 0.7400 (10-DMA). On the flip side, the immediate support located 0.7263 (daily S2). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7250 (psychological levels) and below that at 0.7200 (zero figure).
WTI flat-lined near $ 53 ahead of API data, holiday season
Oil futures on NYMEX recovered from lows, although remains stuck in an extremely narrow as low volumes and thin liquidity persists heading into year-end holiday season.Currently WTI advances +0.26% to $ 53.20, taking on a minor-recovery from $ 52.85 region. Oil prices is trading lack-luster, although remains on the upper bound of the trading range seen so far this week, as markets begin to price-in positive effects of the output cut deal agreed between OPEC and non-OPEC producers earlier this month.However, the upside is likely to remain limited as the US dollar keeps its ongoing bullish momentum intact across the board, especially in wake of optimistic remarks by the Fed Chair Yellen on the US labor market and wage price growth. A stronger US dollar makes USD denominated more expensive for holders in foreign currencies.The cautious behavior in the black gold is also in anticipation of the weekly supply reports from the US due today and tomorrow, the last ones for this year, which will provide fresh impetus to the oil markets.A breach of support at $52.59 (daily R1) would expose the 10-DMA support of $52.35. While a break above $53.60 (daily R3) could yield a test of Dec 12 high at 54.51.
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