Healing against all major rivals, except for the British pound, the US dollar concluded the week in green territory, edging up 1.20% according to the US dollar index, or DXY. Last week, the greenback began its ascent on Tuesday, strengthened in the wake of firm CPI data and positive developments on the US/China trade front.
Economic Events to Watch Today
Let’s took at these fundamentals…
DXY – Dollar Index – Daily Analysis
The U.S. Trade Representative Lighthizer declared that further tariffs on some Chinese imports will be postponed until December 15. The US President Trump later said the decision was taken to avert any impact on the Christmas shopping period. The further upside movement came in the wake of strong retail sales and upbeat housing data.
On the technical front, the DXY reclaimed weekly resistance at 97.72 (now acting support), exposing the 98.92 July 29 high as the first port of resistance, closely shadowed by weekly resistance at 99.62.
EUR/USD – Daily Analysis
The EUR/USD currency pair has dropped & all eyes still on German bond yields. Today in the early Asian market, the EUR/USD currency pair hit the bearish track for the 4th straight session on Friday, and currently trading at 1.1090, due to increasing dovish European Central Bank expectation and the discussion of German fiscal boost.
Moreover, the EUR/USD currency pair could increase if the German Treasury yields chart recovery due to fiscal stimulus expectation.
Meanwhile, the treasury yield on the German ten-year bond yield still under burden continuously from the last week due to all investors gathered into safe-haven assets on anxieties and tensions of the Europan slowdown.
As of writing, the treasury yields, found in loss and hit a new low record of -0.726% on Friday before ending the day with moderate gains to -0.684%.
According to the forecast, we may say German benchmark yields could increase during this week in the EUR-positive manner due to fiscal stimulus expectation. Besides, the upside, if any, will probably b capped near the previous support level of 1.1162, due to all investors remain betting on a raft of fiscal stimulus expectations from the European Central Bank.
Whereas, the Central Bank is prepared to easing further into the negative territory in the coming month. At present, the Europan Central Bank deposit rate stands at -0.4%.
Lately, the EUR/USD has violated the horizontal support level of 1.1169 as this level was extended by descending triangle pattern on the 3-hour timeframe. EUR/USD has formed bearish engulfing candle right below 1.1165 support become resistance area, signalling strong bearish sentiment of investors.
Daily Support and Resistance
Pivot Point 1.1088
EUR/USD – Trading Tips
Consider staying bearish below 1.1095 to target 1.1065 and 1.1030.
GBP/USD – Daily Analysis
The British pound also witnessed a sharp change in the mood last week vs the buck, concluding the session up 0.99%. Better-than-expected UK retail sales helped boost confidence on Thursday, though most of GBP’s profits caught headlines that Labour Leader Corbyn stepped up his efforts to avoid a no-deal Brexit.
For now, all of the focus shifts on the UK PM Boris Johnson’s EU survey after a yellowhammer leak. At the starting of the day, the GBP/USD currency pair continues to hitting the bullish track, and trading near the 1.2150, due to United Kingdom lawmaker steps forward to protect the Yellowhammer news leak. Behind the price momentum, there is some additional reason. The first one is the recovery in risk sentiment and reducing tensions between the United Kingdom and Iran, following the UK recently released Inranins oil tanker, which is seized from Gibraltar.
As a result, the ten-year U.S. Treasury yields increased around 4-basis point to 1.583%. Whereas the United States President Donal Trump’s latest statement has a slight impact on the GBP/USD currency pair, the decline of economic data and event on the calendar will keep alert to traders for seeking any fresh hint regarding trade an political.
Technically speaking, the GBP/USD exhibits scope to explore higher ground beyond 1.22 this week, targeting 1.23, followed by the 2017 yearly opening level at 1.2329 and then H4 resistance at 1.2346.
Daily Support and Resistance
Pivot Point 1.2136
GBP/USD – Trading Tips
On Friday, consider staying bullish above 1.2130 in GBP/USD with a target of 1.2180 and 1.2195. All the best!