The Forex Week In Review

The Week That Was…

Markets end the week digesting the upside surprise in the US Nonfarm Payrolls data which blew away consensus estimates to print a very robust 321k in November.

The continuation of strong data out of the US is in stark contrast to the more subdued news out of Europe. The ECB’s Draghi disappointed markets yesterday when he failed to announce and significant expansion to stimulus measures from the ECB. Instead pointing towards and early 2015 move.

Wires have been busy this morning covering source comments suggesting a significant package is being prepared but no firm details have emerged yet.

A much lighter data calendar next week with Key focus points being AUD Unemployment data and then USD Retail sales at the end of the week.

  • USD  broadly stronger as all fundamental and technical evidence supports the building USD rally. COT data continues to register new 52 week highs in USD long positions.
  • EUR ECB lowered its economic growth and inflation forecasts. President’s remarks on easing policy did not bring surprises to the market. EURUSD rebounded from the low to a high of 1.2456. EURUSD’s short term resistance is at 1.2570, and support is at 1.2242.
  • GBP BoE kept its interest rate and asset purchase target unchanged in Dec, in line with expectation. UK’s Nov Halifax House Prices Index rose 0.4% MoM, higher than expected. GBPUSD in a month long range of 1.5644-1.5726. GBPUSD’s short-term resistance is at 1.5920, and support is at 1.5530 .
  • JPY Japanese media reported that polls indicated Prime Minister’s coalition may win two third of the places in the Lower House election. USDJPY tests 121 on the back of robust US data . USDJPY’s short-term support level at 117.90 and resistance at 121.50 .
  • CAD  USDCAD rotating in a range of 1.1340-1.1397. Domestic unemployment rate data matched market expectations and the CAD continues to take the brunt of the USD bid, short term support level is at 1.1355 and resistance level is at 1.15
  • AUD Australia’s Oct retail sales rose 0.4% MoM, better than expected. However, the upward momentum brought by the data could not sustain. AUDUSD’s
    short-term support is at 0.8316, and resistance is at 0.8585 .

Key Views

  • EURUSD Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks) Bearish
  • GBPUSD: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks) Bearish
  • USDJPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bullish
  • USDCAD: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks) Bullish
  • AUDUSD: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish

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