CURRENCY HIGHLIGHTS – November 2019
The European currency remains under pressure with limited upside moves unable to follow through as buyers keep their hands in their pockets. The daily chart shows a pattern of sell-off, mild pull-back followed by another sell-off and until there is a fiscal boost plan agreed by member states, then inflation and growth – and the Euro - will remain lowly.
Next week there are little market moving economic releases and events until Thursday when there is a notable double. The latest OECD Economic Outlook is released at 10:00 GMT and is likely to highlight weaker growth and further uncertainty in the Euro-Zone. The September OECD interim report reduced Euro area growth expectations down to 1.1% in 2020 and 1.0% in 2021, with global downside risks continuing to mount. Later Thursday the latest minutes of the ECB MPC meeting will be released, and again these will highlight ongoing weakness. On early Friday, a raft of preliminary Euro area PMIs will be released, just minutes after new ECB President Christine Lagarde has spoken in Frankfurt. Friday morning has the potential for increased volatility. Expected price range is 1.0980 – 1.1075.
Hopes that the United States and China may soon end their trade war after a pair of high-ranking White House officials drove down demand for the safe-haven Japanese Yen on Friday. This move could continue this week if the optimism prevails. Mixed comments about the status of trade talks between the United States and China encouraged some investors to seek shelter in the safe-haven Japanese Yen although U.S. stock market investors seemed to read the developments as bullish. This should be the focus for investors this week if last Friday’s price action is any indication. Last week, the USD/JPY settled at 108.785, down 0.458 or -0.42%.
The British pound has rallied a bit during the week, reaching towards the top of the flag that is currently being built. It should be noted that we are just above the 50 week moving average, which is a representation of support.
The GBP is continuening to find bullish pressure to send the market higher. At this point in time, is very likely that the market will continue to see buyers on dips, as it looks like we are trying to build up enough momentum to finally go out to the upside and break above the 1.30 level. If we do, then it opens up the door to the 1.33 handle, and then eventually the 1.38 level. The flag of course is something that almost everybody is paying attention to, and quite frankly it only needs some type of catalyst to kick off.
Gold prices eased slightly on Friday, despite a weakening US dollar. Short term resistance is seen near the 10-day moving average at 1,472, and then the 100-day moving average at 1,478. Support on the yellow metal is seen near the November lows at 1,445 and then the October lows at 1,426. The 10-day moving average crossed below the 100-day moving average which would show that a short-term downtrend is in place. Short term momentum has turned positive. The fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 30 accelerating from below the oversold trigger level, which points to higher prices. Medium-term momentum is negative to neutral as the MACD histogram is printing in the red with a rising trajectory which points to consolidation.
BITCOIN and ALTCOINS
In last month Bitcoin price gained and is cruising in a range between $8.400 and $8.900. Most of altcoins dropped slightly against Bitcoin who remains the absolute king of digital assets in the moment. Many other players are also entering blockchain and crypto field and the future of money is digital for sure. Institutional investors are investing 200-500 million dollars weekly. Daily volume of trading with cryptocurrencies has surpassed 50 billion dollars. The general sentiment in the crypto market is very positive and as said many times already, we expect a huge breakout of cryptocurrency.
The blockchain industry is developing extremely fast. Various projects are coming to life, more and more big merchants are starting to accept cryptocurrencies, first Smart Cities designed on blockchain solutions are being built, even some countries are considering establishing national government-backed cryptocurrencies.