Brad Alexander
FX Large Limited
After the Republican win in the US elections last week, we saw USD strength.
That was followed by weakness after the lowering of Interest Rates.
What next?
Well, after the lowering of Interest Rates, USD continued stronger.
We can see price action on the EURUSD chart as EUR is the weakest currency.
Price action reversed after the Interest rate decision with this hanging man candlestick pattern and a turn of the stochastic oscillator from overbought.
We have to move to the weekly chart to see that we are at a level of support from April and an oversold stochastic oscillator.
We had even more dramatic movements with AUDUSD but we are close to recent support.
The weekly chart on AUDUSD tells a bearish story as well with price action at the lower trend line and at least one technical signal.
We see a similar story on GBPUSD and I encourage you to check all the USD pairs.
Gold as well, had similar price action.
While we are looking at weekly charts, WTI is close to the magical level of support of $66.
Apparently, this bearish move was caused by a selloff based on negative sentiment of Donald Trump’s foreign policies.
That’s all for now.
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Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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