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25 November Forex daily review

Sergiy Zlyvko
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On Tuesday news background was meager. ECB members were major newsmakers representatives. ECB Governing Council member Ardo Hansson said that the ECB has scopes for further interest rate cuts. Christian Noyer also did not rule out that at lower levels of inflation the ECB will again cut interest rates.

Because on Monday the trading volume was low, speculative shorts were increased. The euro/dollar from 1.3560 high dropped to 1.3490 in Asia today is trading at 1.3530. The British pound has lost about 100 points. Rate decreased from a high of 1.6240 to 1.6035.

Parliamentary debates on the inflation rate for the 3rd quarter and the speech of the Bank of England’s Mark Carney are scheduled at 10.00 GMT. The pound on the four time frame broke the trend line (sell signal). Today the pound will set the tone for trading on the Forex market. In the U.S. session at 13.30 GMT in the United States the number of housing starts in September will be issued. U.S. consumer confidence index for November will be published at 15.00 GMT.

The dollar index fell back to 81 and was trading at 80.85. The situation is ambiguous. Representatives of the ECB put pressure on the euro by their comments. If the pound slips down, then the index will go up to 81.20.

Euro/dollar fell back to 1.3500. EURUSD even dropped a bit 1.35 level. From 1.3490 the pair returned to 1.3540. By the main scenario we consider decline to 1.3470. We’re worried about a pound, which yesterday dropped to 1.6145 and struck H4 trend line. Today M. Carney acts so we think that today the traders will be guided by the dynamics of the pound. After the breakdown of 1.3515 to accelerate forward 1.3470.

GBPUSD upward movement from 1.6070 is quenching. On Monday, the bulls lost their positions in the area of 1.6175. Falling stopped closer to the closing of the European session on 1.6145. Given that H4 trend line struck then the main scenario of the pound is falling forward to 1.6085 level. We think there’s even a support on 1.6100 will not help. M. Carney stands at 10.00 GMT at this time the activity in the foreign exchange market by the pound and other currency pairs is expected.

After falling to 0.9120 AUDUSD exchange rate rebounded to 0.9200. AUDUSD trend is downward, but due to the crosses correction, the fall can be restrained. Perhaps it was the turn of other currencies weakened against the dollar. The main scenario for Tuesday considers the movement near 0.9140 level.

Swiss franc stayed on 0.9105, but the final stop it made on 0.9130 level. So USDCHF rate strayed from 0.9130 and is now trading near the support line at 0.9110. Let’s follow the dynamics of the pound. If the pound/dollar will go lower, USDCHF rate will pierce the level of 0.9130.

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