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21 November Forex daily review

Sergiy Zlyvko
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On Thursday, the dollar strengthened against the Australian dollar and Japanese yen and closed lower against the euro, the British pound and the Swiss franc.

In European trading EURUSD pair went under the 1.34 mark after weak French PMI indices and then recovered by the German PMI index to 1.3445. British pound before closing the Asian session was trading in a narrow range 1.6070-1.6105 and escaped with the euro/dollar after the speech of M.Dragi.

ECB President Mario Draghi said on Thursday that after a decline in interest rates at the last meeting, the market for those negative interest rates on deposits made wrong conclusions. Draghi confirmed that at the meeting negative deposit rates were discussed, but no more. Nobody is going to enter them, it is considered one of scenarios. Letting the rumors, the ECB check the reaction of the market to know what to expect from the markets in the event of such a decision.

British pound even ignored the statistics from the United States and to the end of the trading session added 75 points against American dollar. The GBPUSD climbed to 1.6200. The strengthening of the pound was contributed by the data from the UK and the drop of EUR/GBP. According to the economic survey of the British Confederation of Industrialists, the balance of production orders in the UK in November was 11 (prediction 1, the previous value – 4).

The index of business activity in the manufacturing sector in the U.S. in November exceeded the forecast. The number of initial claims for unemployment benefits last week fell more than expected. For dollar this data is fine in details. U.S. Senate Banking Committee supported the candidacy of Janet Yellen as chairman of the Fed. The solution adopted by 14 votes “for”, 8 senators voted against.

So it turns out, there have been improvements in the U.S. Europe shows good data. According to British statistics, it was published better than expected. We think if euro will be at 1.3485, it will go to 1.3575 and as long as the euro is trading near 1.3485 we are waiting for the fall of EURUSD.

The euro/dollar at the end of the day restored to 1.3485. At present, this will be the critical level for the bulls, as if they able to consolidate above 1.3480, we should expect a similar scenario to yesterday’s GBPUSD trend. According to the AC there is a divergence in the market now, Stochastic pointing down, AO is in the positive zone turned down. In this regard, we are considering the fall in the main scenario.

European statistics, which will come out during the day, we are not going to take into account.

Yesterday the AUDUSD after Stevens speech flew into the zone of pinning. We thought that from the 0.9240 there will be a roll back, but at the next decrease the pair failed to 0.9165. Scenarios canceled.

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