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No relief for battered USDJPY USDJPY tumbled to nearly two-month lows below the 112.00 handle on Thursday, continuing to march south for a fifth day in a row. The dollar struggled to get a relief from the Fed’s unexpectedly ‘hawkish’ tone as the safe-haven demand has surged after the central bank meeting. Such a behavior in the market shows that the risk trends set the tone for investors rather than the signals from FOMC that turned out to be rather optimistic as the Federal Reserve now expects two hikes instead of three next year, while markets have nearly prices out even a single hike, citing stress in global financial markets, heightened volatility, slowing global growth, a plunge in the oil market and the lingering risks from the US-China trade war, despite the recent progress in talks. In the short term charts, the oversold conditions warrant some corrective recovery or at least a consolidation. The next major driver for the pair is the US NFP employment report due tomorrow. Should the numbers disap-point, the dollar could extend the decline. A break below the 111.70 support will open the way to the 111.35 area. Once below this level, the greenback will target September lows marginally above the 111.00 threshold.
by HelenRush
Gold is shining again The recovery in gold prices from August lows is gaining momentum. On Wednesday, the precious metal has extended weekly gains to fresh mid-July highs marginally above $1,251 and holds in the positive territory, ex-pecting fresh short-term drivers. It looks like gold is shining again, after a break of the aggressive bearish trend. The bullion’s appeal is rising due to a sell-off in the greenback as the American currency is on the defensive across the board amid the grow-ing doubts in the Fed’s ability to proceed with monetary tightening in 2019. In this context, today’s FOMC meet-ing will define further direction for the greenback, gold and global financial markets in general. A potentially ‘dovish’ hike will depress the dollar even further. In this scenario, the precious metal could attract a more robust demand. However, the possible upside impetus will likely be limited against the backdrop of a positive reaction in stock markets. As such, the bullion may not make a clear break above the mentioned $1,250 barrier but in the longer term, it could further regain its attractiveness amid the increasing signs of slowing glob-al growth.
TVC:GOLD
by HelenRush
Oil market can’t stop bleeding After several failed attempts to settle above the $60 figure, Brent crude has accelerated its decline and made fresh 14-month lows marginally above $57 on Tuesday. The current environment in the markets confirms that not only oil remains attractive for selling on rallies, but traders tend to open short positions and don’t believe in the efficiency of a new OPEC+ deal. Apart from that, the crude oil prices are getting more sensitive to global risks. Investors are getting more wor-ried about the potential slowdown in the global growth, which fuels concerns over a weaker demand in 2019 amid the ongoing rise in the US shale oil production. By the way, as US Energy Information Agency reported on Monday, the oil production in the country is expected to rise to 8.166 million next year. Should the market remains under pressure in the short term, the next downside target is expected at $55, where October 2017 lows lie. Brent needs to get back above the $61 barrier shift to a recovery mode, but there are no signs that the bullish drivers will come to the rescue, at least, so far. On the other hand, further sell-off could make major OPEC exporters come out with verbal interventions.
TVC:UKOIL
by HelenRush
FOMC meeting is a major test for USD The dollar turned negative on Monday following a widespread rally at the end of last week. The USD demand ebbs even as the risk sentiment remains subdued as investors still prefer a cautious approach due to the linger-ing global risks. The EURUSD pair has switched to a recovery mode and trades around the 1.1350 area. Interestingly, the euro is rising despite the latest data confirmed that the euro zone economy is slowing. In particular, the final November CPI came in at 1.9% YoY versus the flash estimate of 2.0%. On a monthly basis, the consumer price index de-clined by 0.2% versus +0.2% previously. Moreover, the core CPI came in at -0.3% from +0.1% in October. Such a behavior in the market shows that traders are shifting focus to the upcoming FOMC meeting, and the expectations ahead of the key event of the week are driving the markets. As there are expectations that the Federal Reserve will turn more ‘dovish’ the dollar feels uncomfortable, and further profit-taking could be ex-pected in the near term even as the central bank is to deliver the forth rate hike. Technically, the EURUSD may challenge the 1.1350 region but the upside potential is limited as long as the is-sues with Italy’s budget remain unresolved. The immediate support levels come at 1.13 and 1.1270.
by HelenRush
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USDJPY: longer term outlook is negative The Japanese yen is trading marginally higher on Friday as risk sentiment turned sour after two days of rising market optimism. USDJPY still struggles to regain the 114.00 hurdle as investor sentiment is unstable and the greenback lacks the upside impetus. In the weekly charts however the pair is firmly in the positive territory after a deep slide during the previous week.  In the longer term, the safe-haven yen demand could rise due to increasing concerns over the slowing global growth. The Chinese economic reports have disappointed today as retail sales and industrial production data came in lower than expected. The figures stoke worries about the potential global slowdown next year. As such, should the incoming data from major economies continue to send bearish signals, global financial markets could face a more profound downside pressure which in turn will play into safe-haven assets’ hands.  This week the yen demand was low due to some progress in US-China trade talks and fresh positive developments on this front will likely cap the bullish potential in the Japanese currency so far. But the longer term outlook points to upside risks for the yen. 
LSE:LAND
by HelenRush
Gold depends on the Fed In the weekly charts, gold prices are trading in the negative territory but the overall dynamics continues to im-prove. Earlier this week, the bullion reached the $1,250 handle for the first time since July, which is another con-firmation of reaching a bottom at $1,160 in August. Further dynamics in the yellow metal will depend on the fate of the dollar’s bullish trend. In the short term, the American currency looks rather robust despite the mounting doubts that the Fed will proceed with its monetary tightening next year. In this context, the next week’s FOMC meeting – the last one this year – will be crucial both for the greenback and for gold prices. The probability of a rate hike in December is high, while market expectations surrounding further tightening will depend on the central bank’s rhetoric. Any ‘dovish’ hints could send the buck lower. In this scenario, the bullion could derail the $1,250 resistance and target the next important area $1,255. In the short term, the precious metal will likely continue to swing between gains and losses as the dollar trading still looks mixed. On Friday, the US retail sales data could support the bullion should the figures disappoint USD bulls.
TVC:GOLD
by HelenRush
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Euro shifts focus to ECB Ahead of tomorrow’s ECB meeting, EURUSD has settled marginally above the 1.13 threshold and doesn’t dare to challenge the 1.14 barrier since the start of the week. After two days of declines, the euro makes some recovery attempts on Wednesday but the overall demand looks very limited due to growing concerns over the spreading political crisis across the EU. On Thursday, the European central bank will end itsasset purchasing program and leave rates unchanged. This is priced in already so won’t have a significant impact on the euro and markets in general. Investors will pay more attention to Draghi’s tone as traders are trying to determine, when the regulator start hiking rates. Against the backdrop of developments in Italy, and now also in France, the central bank could push back market expectations, citing growing political risks in the region as well as signs of slowing economic growth. Should the ‘dovish’ notes prevail in the ECB rhetoric, the euro could slip and derail the 1.13 figure. In the short term however, the EURUSD pair may gain support from the potential dollar weakness, if the US CPI disappoints. Technically, the price needs to overcome the 1.14 hurdle to target 1.15 again. The longer the pair stays below this important resistance, the more aggressive bearish risks could become.
TVC:GOLD
by HelenRush
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Gold is yet to restore investor confidence Gold prices have been in a recovery mode since August, when the metal found a bottom at $1,160. Despite the corrective rebound is bumpy and uneasy, the technical picture has improved significantly, especially after last week’s rally that was the most aggressive since March. Yesterday, the precious metal has reached a mid-July high above $1,250, where it was rejected amid profit-taking and dollar demand. After a brief retreat, the prices have resumed the ascent and could challenge the above mentioned high once again in the short-term as the dollar attractiveness is getting lower. In the longer term, the bullish outlook for gold looks quite sensible as well, considering the declining US Treasury yields. Another important source of the potential dollar weakness in 2019 is the expected pause in the Fed rate hikes due to the rising economic risks and uncertainty both in the US and globally. As such, should the greenback derail its current upside trend at some point in the future, the yellow metal will regain its safe-haven appeal, though further way north will likely be bumpy and uneasy anyway as gold is yet to restore investor confidence after a plunge earlier this year. Technically, the prices need to get above $1,250 in the short term, while the key support now comes at $1,234. This level could prevent a more aggressive correction should profit-taking resume in the days to come.
TVC:GOLD
by HelenRush
OPEC+ deal fails to inspire oil bulls After a short-term positive reaction to the OPEC+ deal on Friday, crude oil prices struggle to show a sustained recovery as the exporters agreed to curb output by 1.2 million barrels a day. Despite a consensus was finally reached, investors refrain from aggressive buying as there are some doubts that all the members of the group will fulfill their obligations honestly. Traders also fear that the agreed cuts won’t be enough to balance the global market. In other news, Libya’s state oil company NOC declared a shutdown of its biggest oilfield. This could lead to an output loss of over 300,000 barrels per day. Traditionally, supply disruptions have only a short –term effect on crude oil prices, but this coupled with the OPEC+ deal could at least help Brent to remain afloat for the time being. Meanwhile, the US shale activity remains a downside risk for the market, as well as doubts surrounding the deal between the OPEC exporters and their allies. As such, we don’t see a high probability of prices rising back to-wards the $70 barrier. However, the overall market picture looks better now. In the short term, Brent needs to firmly get back above $62 to avoid profit-taking.
TVC:UKOIL
by HelenRush
Dollar’s path hinges on Fed rate hike bets The greenback is mixed on Friday as traders take a cautious tone ahead of the key US NFP employment report. The release could bring back short-term volatility in the dollar pairs but the broader picture will still depend on the Federal Reserve rate hike bet. The US-China trade war, prospects of slower global growth, and a more cautious tone by the Fed make inves-tors worry about the potential pause in rate hikes at some point in 2019. The base-case scenario now implies that after a hike in December, the central bank will stop monetary policy normalization should the effect from fiscal stimulus start to ebb, and the trade war consequences affect the economy. However, as long as the US GDP and CPI growth rate stays robust, the Fed will unlikely send the markets a clear ‘dovish’ signal. In this context, there is no eminent threat to the dollar’s bullish trend in the short- to medi-um term. However, should the yield curve stay inverted, and the 10-year Treasury yields continue to decline, re-cession worries could come to the fore. In this case, the greenback will have to turn to defensive.
NSE:DOLLAR
by HelenRush
Huawei incident could play into yen’s hands Global markets are trading in a risk-off mode on Thursday amid a potential escalation of US-China trade tensions despite the two countries reached a 90-daycease-fire a few days ago. The Huawei Technologies executive was arrested in Canada at the request of the United States. The arrest is related to the supposed violation of US sanctions on Iran and now Meng Wanzhou is facing extradition to the United States. Meanwhile, China demands her release. The incident has spooked investors that are starting to price in another spike in US-China tensions. As a result, the European currencies came under pressure, while the safe-haven yen demand has spiked, dragging the USDJPY pair below 113.00 again. Should the episode with the Huawei executive evolve into a major dispute between Washington and Beijing, the fragile hopes for resolving the existing trade issues will dissolve. Consequently, the unnerved investors could rush for safe assets with renewed vigour, which will play into yen’s hands even as the greenback shows a relative resilience to the declining US Treasury yields. So the USDJPY pair could challenge the intermediate support at 112.30, a break of which will open the way to the 112.00 threshold.
U
by HelenRush
Oil market on edge ahead of OPEC+ meeting Crude oil prices show a mixed dynamics this week amid the contradictory signals ahead of the crucial OPEC+ summit in Vienna. After the Monday’s rally, Brent dipped yesterday but managed to hold above the $61 thresh-old that is standing on the way to the key psychologically important support at $60. On Wednesday, the prices quickly derailed the $61 level but met buyers on a dip and turned positive on the day. Despite the current bullish bias, the downside risks are still there. OPEC members send ambivalent signals to the market, which doesn’t give confidence ahead of the meeting starting tomorrow. The cartel producers and their allies seem to be unable to find common ground, so the ex-pectations are mixed and uncertain. Russia and Saudi Arabia have agreed on the need to cut output but Mos-cow still opposes to cut by more than 1 million bpd. Meanwhile, Kuwait said OPEC+ nations haven’t yet even discussed proposals to cut production. Considering a high degree of uncertainty, the path of least resistance for Brent is on the downside in the short term as traders could proceed with profit taking to trim risks. Generally, the market will face a heightened volatil-ity in the days to come, and traders will be disappointed if the group fails to meet their expectations for cuts around 1.3-1.4 million bpd.
TVC:UKOIL
by HelenRush
Five reasons behind dollar weakness There is no reprieve for the greenback on Tuesday as all the major factors point to further waning of its attrac-tiveness. The US currency struggles to regain strength after the recent change in the Fed’s tone on tightening prospects. Recent investor optimism over the US-China trade negotiations added to the bearishness as well. Today, the PBOC has strengthened the yuan by the most since June 2017, which put the USD under further pressure. Also, we see a strong recovery in the European currencies as euro rises on hopes that Italy’s govern-ment will make enough budget concessions to satisfy the European Commission. Meanwhile, the cable jumped as the EU court aide hinted at leaving open option to revoke Article 50 unilaterally. Strong UK PMI construction and euro zone PPI data also help to lift sentiment surrounding the European currencies and add to the selling pressure on the buck. A more notable bearish driver for the dollar is further fall in Treasury yields. The 10-year yields broke below the 3.00% figure, down to three-month lows. Even more alarming is the fact that the spread between the 3-year note and the 5-year note have inverted for the first time since 2007, which is a sign of a recession in the US. This fac-tor should be closely followed down the road as further bearish signals from this front could derail Fed’s tight-ening plan and make the greenback break the ongoing bullish trend.
NSE:DOLLAR
by HelenRush
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GBPUSD: upside potential is limited After a meeting between Donald Trump and Chinese leader Xi Jinping at the Group of 20 summit, the two lead-ers reached a 90-day cease-fire in their trade dispute. Global investors are cheering the breakthrough that as-sumes that the US will hold off on his plan to raise tariffs on $200 billion in Chinese goods early next year. Against this backdrop, high-yield currencies resumed their ascent against the dollar, including the British pound. Cable is testing the 1.28 barrier on Monday, trying to get out of a bearish channel after four weeks of losses. However, despite the current recovery, the general upside potential in the GBPUSD pair looks limited. The UK Parliament will vote on Brexit deal on December 11. If the Prime Minister fails to win this vote, the op-position Labour Party would call a no-confidence vote. If May’s government survives a vote of no confidence, Labour could launch a campaign for a second referendum on remaining in the European Union. In other words, there are still significant political risks in the context of the ‘divorce process’ that will likely prevent the GBP bulls from more aggressive steps at least until the vote next week. Technically, the upside potential is limited either – as long as the cable trades below the 1.30 barrier, the down-side risks persist, even if the risk-on sentiment remains and the greenback continues to trade on the defensive.
by HelenRush
Brent remains on the defensive After a brief relief, crude oil prices extend loses Friday. Brent keeps bleeding for an eights week in a row as demand-supply concerns still persist in the market ahead of the crucial OPEC+ meeting due next week. The prices failed to regain the $60 threshold and turned negative on the day, still threatening long-term lows below $58. Over the weekend, the G20 Summit will take place in Argentina. Oil traders will focus on the widely expected dialog between the Russian and Saudi Arabia’s leaders in the context of potential production cuts. Should the presidents agree on the strategic issues, Brent will breathe a sigh of relief on rising chances for resuming quo-tas by the OPEC+ group. However, some other producers could be reluctant to limit output unless prices de-cline further dramatically. This uncertainty will prevail in the markets in the days to come, which should cap the recovery potential. And the fact that buyers refrain from opening long positions, confirms the instability and discomfort in the oil market. Brent will likely finish this week on the defensive, with the downside risks are prevailing, while the bullish poten-tial is very sluggish despite the oversold conditions. Once below $59, Brent could retest October 2017 lows.
TVC:UKOIL
by HelenRush
Dollar digests Powell’s ‘dovish’ message The greenback continues to bleed nearly across the board, digesting the unexpectedly “dovish” tone from Pow-ell. The Fed Governor stated that rates were just below neutral range and didn’t mention a future 'gradual path of rate hikes for next year. Such rhetoric made traders worry about the potential pausing hikes in 2019. As a result, the dollar came under aggressive selling pressure which has partially abated in mid-morning trading on Thurs-day. The message from Powell implies that the buck could lose a strong bullish driver – the monetary policy diver-gence. At the same time, a more measured approach by the Federal Reserve bodes well for riskier assets. But in the short term only. By changing its tone, the Fed admits that the global economy is really cooling and a more substantial slowdown could be in the cards. In this environment, other major central banks may not find solid grounds for hiking rates as well. So, in the longer term, a more cautious stance by the US regulator won’t have a dramatic impact on the buck. For now, USD will likely remain under some pressure until the dust settles. By the way, negative Brexit devel-opments could help the dollar to recover. After the recent rally, cable clipped below 1.28 as sterling failed to keep the upside momentum ahead of meaningful vote. Further selling pressure from this front may ease the negative sentiment surrounding the greenback.
NSE:DOLLAR
by HelenRush
Euro could revisit 2018 lows After yesterday’s decline, EURUSD tried to stage a recovery but failed to attract buyers and resumed the downside move even as the dollar demand seems to be losing steam following the recent rally. The pair was rejected from the 1.13 handle and refreshed two-week lows below 1.1270. Despite the talks of Trump’s auto tariffs were denied today, the speculations were enough to fuel concerns about escalation of EU-US trade issues. Anyway, Italy remains the key bearish factor for the single currency as, according to the European officials, Italy’s budget deficit target must be closer to 2% for the EU to consider approval of the plan, and a cut of 0.2% is not enough to prevent opening the so-called EDP measures against Italy. Should the threat of negative developments on this front rise further, the euro could revisit this year’s lows mar-ginally above the 1.12 barrier. In this context, traders will closely monitor bond yields dynamics in the region. Another risk factor for the EURUSD pair is the potential USD rally. Trump’s hostile rhetoric coupled with poten-tially strong US GDP data and falling oil prices could fuel the greenback demand across the board. In the short term, Fed Powell’s testament will be in focus. A neutral or cautious tone could put the dollar under some pres-sure and cap the selling pressure on the euro.
by HelenRush
Dollar could receive further boost The greenback continues its ascent on Tuesday, with the major currencies are on the defensive ahead of this week’s G 20 Summit in Argentina. The pound is broadly lower as Brexit deal hopes continue to fade. GBPUSD slipped to mid-November lows around 1.2733, which helps to lift the buck. Interestingly, the EURUSD pair is also edging lower even as the Italian government has signaled that the country could adjust the deficit target from 2.4% to 2.2%. The price is threatening the 1.13 figure as traders ignore the potentially positive developments in the Italy’s drama. Such a behavior shows that investors are focused on the general dollar tone in the context of risk sentiment. In other words, traders prefer to buy USD ahead of the cru-cial Summit in Argentina, where trade and oil prices will likely be in focus. Another potential source of further dollar strength are the upcoming comments by the Fed officials. Investors now doubt that the Federal Reserve will continue its tightening path in accordance with previously announced plans. So fresh statements could dispel those doubts if the politicians confirm the outlined plan. In this regard, the greenback could strengthen further. So, EURUSD may lose the 1.13 handle, while the pound could chal-lenge the 1.27 support for the first time since late-October.
by HelenRush
EURUSD: too early to call a bottom The euro recovery is gaining traction on Monday after a steep decline late last week. EURUSD is extending gains above 1.13 but lacks momentum to challenge the 1.14 handle so far. The local demand growth is due to some positive developments in Italy. In particular, Italy's deputy prime minister Luigi Di Maio hinted at a possible budget deficit reduction. As being reported, the country’s government is discussing reducing the budget deficit to 2.0% - 2.1% from the current goal set at 2.4%. The officials will likely meet later today to discuss the reduction. In this context, the single currency could receive a relief should the government really decide to make concessions to the EU. In a wider picture however the euro’s attractiveness is still at risk against the backdrop of increasing signs of slowing growth in the region. This in turn may weaken the prospects of rising rates by the ECB in 2019. As such, it’s still too early to call a bottom and the downside risks still persist for the euro. The upcoming ECB President Mario Draghi's testimony before the European Parliament Economic and Monetary Affairs Committee will be the key event for the currency today. Any signs of “dovishness” on the economic or political developments in the region could undermine the current recovery. Technically, the pair needs to stay afloat above the 1.13 threshold which is the major pivotal point for EURUSD in the short term.
by HelenRush
Oil needs signals from OPEC Crude oil prices resumed the decline after some shallow recovery attempts earlier this week. On Friday, Brent has challenged the $62 support and slipped to fresh February lows around $61.80. The selling pressure has eased a bit since then but downside risks remain as the barrel struggles to get back above $62. The market has shifted focus to the upcoming OPEC+ meeting in early December. But after the Saudis an-nounces a possible production cut by 1.4 m barrels, there are no any further signals from the exporters. This silence makes oil traders nervous, and the uncertainty ahead of a critical meeting fuels further profit taking, even at the current low levels as market participants tend to reduce exposure to oil risks. Relentless rise in US shale activity adds to the negative pressure on prices. In addition, Brent is affected by risk aversion that prevails in the global financial markets against the backdrop of US-China trade war and signs of slowing global growth. In this context, the market will closely follow the incoming economic data from China and monitor the dialog between Washington and Beijing. In current circumstances, Brent will hardly be able to stage a consistent corrective rebound without some sup-porting factors. First of all, the market will be waiting for positive signals from OPEC. A better risk sentiment could also help. Otherwise, prices could target the $60 handle in the days ahead.
TVC:UKOIL
by HelenRush
USDJPY: the path of least resistance remains to the downside Unstable investor sentiment prevents the USDJPY pair from a more robust recovery. The financial markets fail to show a steady rise due to a number of risk factors, from US-China trade war to Brexit and global growth. Against this backdrop, safe haven demand prevails and helps the Japanese yen to stay afloat even as the Bank of Japan continues to adhere to its ultra-loose monetary policy. Another hurdle for the greenback is the growing market fear of a pause on rate hike cycle by the Federal Reserve. In this context, the December Fed meeting will be the key event for the pair. Despite the lingering doubts, the central bank will likely hike for the fourth time this year. But much will depend on the Powell’s tone, as a cautious or even somehow “dovish” rhetoric could dump the dollar across the board. USDJPY struggles to stay above the 113.00 hurdle this week. The dollar needs some impetus, including higher Treasury yields, to make a clear break above this level. Otherwise, the risk of a slide to 112.30 will grow. The pair will turn bearish on a break below the 112.00 support. As the risk aversion still prevails, the path of least resistance remains to the downside.
by HelenRush
EURUSD: bears remain in control The positive sentiment in risk appetite underpins the euro on Wednesday. Yesterday, EURUSD was rejected from daily highs still below 1.15 and slipped under 1.1360. Now, the pair is trading positive on the day but still struggles to regain the 1.14 figure which confirms a cautious tone amid the Italy’s budget woes. The reports that Italy may make cuts to the amounts on citizens' income have supported the single currency ear-lier in the day. But the European Commission will anyway disapprove of the revised budget. So the risks from this front persist. Moreover, the dollar looks stable after the recent rally, which caps the euro’s upside potential as well. Meanwhile, Italy's statistics bureau cut its 2018 GDP growth forecast to 1.1% from 1.4%. It’s not sur-prising but doesn’t bode well for the European currency either. In the short-term, the bearish risks for the EURUSD pair persist. Further Italy-German yields spread widening could fuel another sell-off in the euro. In a wider picture, traders will likely continue to sell the currency on rallies until the Italian dust settles, and it may take a long time. As long as the pair is trading below 1.15, the bears will remain in control.
by HelenRush
Gold benefits from weaker dollar The yellow metal continues its recovery on Tuesday amid a widespread risk aversion, declining yields and weaker dollar. Gold prices are regaining ground for a sixth day in a row but still fail to make a decisive break above the $1,225 immediate resistance. Investors refrain from risk taking against the backdrop of ongoing Brexit concerns, Italy’s budget issues, un-certainty over the trade war, and the global growth concerns. Additionally, the greenback is on the back-foot after some dovish comments by Fed officials. These two factors support the metal’s attractiveness for buyers. However, the current pressure on the buck is not enough to fuel a more sustainable ascent in gold prices. Inves-tors are still cautious after a prolonged drop that lasted for over six months. Gold bulls need more impetus and drivers to push the prices substantially higher from here. As such, the precious metal will continue to closely watch the signals from dollar and from the Fed, while the incoming US economic data will be assessed by traders even more thoroughly after the recent signals from the Federal Reserve. The bullion needs to get back above the $1,230 threshold in order to pave the way to further ascent.
TVC:GOLD
by HelenRush