Currency Highlights | November
17.11.2018
US President Donald Trump's tweet was the main driver of stocks USD/JPY.

CURRENCY HIGHLIGHTS – November 2018

 

EUR/USD

Currency pair EUR/USD continues the downtrend and is testing 1.1300 level and settles around it now, and as long as the daily was below this level, the bearish trend scenario will remain valid until now, waiting to rebound bearishly to target 1.1181 level as a next main station. 

We should note that confirming breaching 1.1300 level will stop the negative scenario and lead the price to test 1.1443 level initially.

Expected trading range is between 1.1180 support and 1.1370 resistance.

It is expected to rise again after Brexit negotiation will show clear way of how Brexit will be implemented.

 

GBP/USD

GBP/USD traded up on rumors that a Brexit deal is imminent and down on worries that it could all break up. What’s next? Apart from Brexit, the UK releases three top-tier figures. Here are the key events and an updated technical analysis for GBP/USD.

Rumors of a decisive cabinet meeting to approve a Brexit deal proved premature. The question of the Irish backstop is negotiated within the government, between the government and the supporting DUP part, and also with the European Union. Comments by British, Irish and EU officials can be summed up by Michel Barnier’s “we’re not there yet.” However, with 95% of the deal sealed, a breakthrough could come at any moment. In the US, the Mid-Terms resulted in a split government as expected while the Fed maintained an open door to hiking in December.

 

USD/JPY

USD/JPY moved higher in a week that was not that great for safe-haven currencies. Stocks rose, mostly on optimism for a deal between China and the US, and the US Dollar came out on top. The upcoming week features the Mid-Term Elections and also a Fed decision.

Global equity markets had a terrible October and things seemed to change at the turn of the month. The Japanese yen was doing quite well up to that point, and its fate turned around afterward.

US President Donald Trump tweeted about a successful conversation with XI Jinping, China’s President. This was followed by a report about Trump instructing his cabinet to prepare a trade deal, later denied. This was the main driver of stocks.

The greenback had reasons to rise on its own. Data was mostly upbeat. The Non-Farm Payrolls beat expectations with 250K and wages finally topped 3% annual growth. Other data remained promising.

And the yen had reasons of its own to lose ground. The Bank of Japan left its policy unchanged, but lowered inflation forecast, basically acknowledging reality: prices are not picking up. The BOJ’s loose monetary policy may continue running for a very long time.

 

AUD/USD

The Australian dollar enjoyed a second consecutive week, but the rally met its limits. What’s next? Australia’s jobs report and wage data stand out. Here are the highlights of the week and an updated technical analysis for AUD/USD.

The Reserve Bank of Australia left the interest rate unchanged as expected. The rate statement and the quarterly inflation report did not shed new light on any change in interest rates, but it seems that the RBA is content with the current economic situation. The US Mid-Term elections resulted in a split government as expected. The greenback initially dropped but then recovered.