Olivia

EUR/USD broke above vital 1.1055 and 1.1057 to trade 1.1139 and just prior to the 5 year average at 1.1159. EUR/USD then traded lows to 1.1033. EUR/USD remains overbought from lower averages and despite overbought, EUR/USD cross pairs across the board trade deeply oversold. Oversold cross pairs applies to EUR/JPY, EUR/CHF, EUR/NZD, EUR/AUD. For the week, EUR/USD targets 1.0980 on a break of 1.1007. The target at 1.0980 trades just before big lines at 1.0953 and 1.0931. For January, shorts are located at any price around the 5 year average at 1.1159. EUR/USD line up as follows: 1.0899, 1.0891, 1.1061, 1.1159, 1.1275, 1.1522. Similiar to EUR/USD, GBP/USD traded to the 5 year average at 1.2832 then reversed. GBP/USD trades overbought while GBP cross pairs begin the week oversold. Oversold GBP cross pairs include GBP/CHF, GBP/JPY, GBP/NZD, GBP/AUD. GBP/USD’s lower target is located just prior to 1.2653 on a break at 1.2710. GBP/USD’s big lines below at 1.2500’s are many and solid nor expected to break anytime soon. GBP/USD current range trades from 1.2584, 1.2596, 1.2785, 1.2832, 1.3154, 1.3557. EUR/USD and GBP/USD trade dead center to historic ranges yet overbought. Both overbought EUR/USD and GBP/USD trade contradictionary to oversold cross pairs.… Read More »FX weekly — DXY and 14 currency pair levels and targets

NFP report and Eurozone CPI will be the week’s focal point on Friday. FOMC minutes and ISM PMIs will also be crucial for the US Dollar. Canadian employment and Chinese PMIs might attract attention too. Rate cut bets in overdrive It’s been one big rollercoaster ride for the US dollar in 2023, as hopes of a Fed pivot were repeatedly dented by surprisingly strong economic data, which more often than not, has come from the robust performance of the American labour market. But traders seem surer this time that a pivot is just around the corner, as Fed chief Powell himself has dropped subtle hints about it. Thus, despite a powerful rebound during the summer and autumn, the greenback looks set to finish the year with losses of almost 3% against a basket of currencies. That rally was driven by a surge in Treasury yields, which have since been tarnished by heightened expectations of aggressive rate cuts over the coming year. Cumulative rate cut odds for 2024 are fast approaching 160 basis points. This seems excessive when considering that the US economy is not in recession and Fed officials are only predicting about three 25-bps cuts. The minutes of the… Read More »Week ahead – US jobs report and Eurozone inflation to kickstart the new year

The Canadian Dollar put in a lot of miles just to end the year down two pennies. BoC, Fed rate policy lockstep at risk of rapid divergence in the first half of 2024. A breakdown of the Loonie-Oil correlation poised for a rough correction. It was a back-and-forth year for the Canadian Dollar (CAD), kicking off 2023 with opening bids near 1.3550 against the US Dollar (USD), and the USD/CAD spent most of the year rattling between 1.3000 and 1.3900. The pair is set to wrap up December’s trading within sight of 2023’s opening bids, down around one and three-quarters of a percent on the year following a fourth-quarter breakout in the Canadian Dollar that surged over 4% from 12-month lows against the Greenback. The USD/CAD will see diverging central bank policy as a key driver through 2024, and the correlation between the Canadian Dollar and Crude Oil is likely to hold firm through the upcoming trading year. Despite musings in recent years about a shakeout in the Loonie-Crude connection, 2023 saw USD/CAD and West Texas Intermediate (WTI) US Crude Oil moving around the charts in lockstep.  The Canadian economy is expected to run into headwinds through the second half… Read More »USD/CAD Price Annual Forecast: Development in rates policy divergence loom in 2024

EUR/USD stabilized below 1.1100 following Thursday’s downward correction. Euro is up more than 3% against the US Dollar this year. ECB-Fed monetary policy divergence could drive the pair’s action in the new year. EUR/USD reversed its direction and registered daily losses after touching its highest level since late July at 1.1140 on Thursday. The pair trades in a tight channel below 1.1100 early Friday and it might have a difficult time finding direction, with trading conditions thinning out on the last trading day of the year. The modest recovery seen in the US Treasury bond yields helped the US Dollar (USD) stay resilient against its rivals on Thursday and caused EUR/USD to stretch lower during the American trading hours. Nevertheless, EUR/USD remains on track to post gains for the third straight week and it’s up more than 1.5% in December.

Warmest thanks to all our Morning Briefing readers for being with us on this market journey through the year. We wish you all a Happy New Year in advance and may our new year be filled with financial success and delightful surprises! We will resume our Morning Briefing edition on 2nd January 2024. Till then we can keep the markets aside and keep the holiday mood on! Profit taking across all markets could be seen today being the last trading day of the year before we go on a weekend holiday mood for the New year. The Dollar Index has bounced back from 100.80 suggesting a false break was seen yesterday below 101 while Euro has seen profit taking near 1.1139, not allowing a rise towards our expected 1.12. EURJPY continues to fall within 159–156 region, while USDJPY appears to be stable above 140-141 and may see a short rise to 142/143 soon. The resistance in Aussie at 0.69 seems to be holding well. Pound could not sustain its rise past 1.28 and has also seen some profit taking. USDCNY is near our mentioned target of 7.09. Need to see if it reverses from here of falls lower towards 7.05.… Read More »Morning briefing: Euro has seen profit taking near 1.1139

AUD/USD Current Price: 0.6832 US Dollar Index rebounds from monthly lows, rises above 101.00. Higher Treasury yields boost the Dollar’s rebound. The bullish momentum in AUD/USD is fading, but the overall trend is still upward. The AUD/USD hit a fresh five-month high at 0.6871 but lost momentum. During the American session, the pair turned negative, falling below 0.6850 amid a recovery of the US Dollar, which was boosted by higher Treasury yields. Market participants largely ignored the US data releases on Thursday, which showed an increase in Initial Jobless Claims above expectations to 218,000 in the week ended December 23. Another report indicated that Pending Home Sales remained flat in November instead of the expected 1% increase. On Friday, no data is scheduled from Australia, while the Chicago PMI will be released in the US.  Attention is now focused on next week’s US employment data, which includes ADP, JOLTS, jobless claims, and Nonfarm payrolls. The US Dollar dynamics continue to be the critical driver in AUD/USD. However, current market conditions with low volume could trigger unexpected moves without catalysts. Given these circumstances and wider spreads, there may be reduced incentives to trade towards the end of 2023. AUD/USD short-term technical… Read More »AUD/USD Forecast: Bearish correction with further potential for continuation

EUR/USD climbed to fresh multi-month highs above 1.1100. Near-term technical outlook suggests that the pair is overbought. US economic docket will feature weekly Initial Jobless Claims. EUR/USD gathered bullish momentum and advanced to its highest level since late July above 1.1100. The pair seems to have gone into a consolidation phase on Thursday as investors await macroeconomic data releases from the US.

Markets seem to be placing bets on 6-rate cuts by FED in 2024 as the sentiment for the first rate cut in March intensifies, dragging down the Dollar Index to levels below 101. Euro has risen to 1.11+ which if sustains can rise to 1.12 before falling from there. EURJPY fell from 158.56 and could be headed towards 157/156 now while USDJPY is falling towards 141 as expected. Aussie is bullish towards 0.69 from where a rejection is possible. Pound continues to slowly inch higher breaking above 1.28 and could test weekly resistance near 1.29 before coming off. USDCNY fell towards 7.10/09. An immediate range of 7.09-7.15 may hold. USDRUB is fluctuating within the 94-89 region as expected. USDINR may appreciate within the 83.00-83.40 region. EURINR trades above 92 on higher Euro. It may rise higher for some more time before falling back to 92 or lower. The US Treasury yields continue to fall. Bearish view is intact and more fall is on the cards. German yields have declined sharply and are coming down in line with our expectation. View remains bearish. The 10Yr GoI is on a corrective rise. Resistance can cap the upside and keep the downtrend intact.… Read More »Morning briefing: Euro has risen to 1.1100

Gold price extends a five-day uptrend to hit a new three-week high above $2,085 early Thursday. The US Dollar keeps the red amid risk appetite, shrugs off a rebound in the US Treasury bond yields. Gold price looks to take out $2,100 as the daily technical setup remains in favor of buyers. Gold price is sitting at its highest level in three weeks above $2,085 early Thursday, extending its winning momentum into the fifth day in a row. Attention turns toward the mid-tier US Jobless Claims data and the bond auction for further upside in Gold price. Gold price keeps pushing higher, as dovish Fed bets support Gold price is finding additional support, as the US Dollar meets fresh supply from a risk-on rally in the Asian stock markets. Investors cheer expectations of aggressive interest rate cuts by the US Federal Reserve (Fed) next year and pile up on global stocks. Further, China’s pledge to promote stable growth by expanding domestic demand combined with the People’s Bank of China’s (PBOC) liquidity injections boost risk appetite at the expense of the US Dollar. Therefore. Gold price continues its upward trajectory toward the $2,100 barrier in Asian trading on Thursday, ignoring the… Read More »Gold Price Forecast: XAU/USD remains poised to clear $2,100 amid bullish technicals

Markets In a session marked by signs of year-end investor fatigue, U.S. stocks managed to eke out slight gains on Wednesday, with subdued trading and a lack of significant market-moving news. The S&P 500 ended 0.3% below its record closing high of 4,796.56 on Jan. 3, 2022. The Dow notched a new record closing high. The three primary U.S. stock indexes experienced fluctuations, alternating between modest gains and losses before closing in positive territory. Despite the day’s mixed performance, all three U.S. indices are poised for monthly, quarterly, and annual gains. The proximate market driver was a steep fall in the pivotal benchmark 10-year U.S. yield. Following a positive reception for Tuesday’s two-year sale, the auction of $58 billion in five-year notes on Wednesday received favourable attention, considering the prevailing market holiday condition and setting the week up for a clean sweep if all goes well with Thursday’s 7-year note auction. The period between Christmas and New Year’s is not typically known for a significant influx of market-moving news; however, the Treasury rally on Wednesday, supported by the success of the five-year stop-through, carried notable weight and saw 10s richer by almost 10 bps, with yields slipping below 3.80%, the… Read More »Asia open insights: Navigating languid markets that still break fresh higher ground