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Greece Retail Sales (YoY): 10.1% (October)
193064 December 31, 2021 18:17 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
GBP/USD Price Analysis: Bulls retain control near monthly high, above 1.3500 mark
193063 December 31, 2021 18:17 FXStreet Market News
- GBP/USD regained positive traction on Friday and climbed back closer to the monthly high.
- The set-up supports prospects for a move towards testing the 1.3565 confluence resistance.
- Only a sustained break below the 1.3400 mark will negate the near-term positive outlook.
The GBP/USD pair edged during the early part of the European session and shot closer to the highest level since November 10, around the 1.3520 area touched in the previous day.
From a technical perspective, a move back above the 50% Fibonacci level of the 1.3834-1.3161 downfall could be seen as a fresh trigger for bullish traders. This, along with bullish technical indicators on the daily chart, supports prospects for a further near-term appreciating move.
Hence, a subsequent move toward testing the next relevant hurdle, around the 1.3565 confluence region, now looks like a distinct possibility. The mentioned hurdle comprises 61.8% Fibo. level and the 100-day SMA, which if cleared decisively should pave the way for additional gains.
On the flip side, the overnight swing low, around the 1.3455-50 area, now seems to protect the immediate downside. Any further decline could be seen as a buying opportunity near the 38.2% Fibo. level/50-DMA confluence resistance breakpoint, around the 1.3420-15 region.
This, in turn, should help limit the downside near the 1.3400 round-figure mark. Some follow-through selling below the 1.3385-75 region might shift the bias in favour of bearish traders. The GBP/USD pair could then accelerate the fall towards the 23.6% Fibo. level, around the 1.3320 area.
GBP/USD daily chart
Technical levels to watch
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Turkey’s Erdogan: The lira will stabilise next week
193061 December 31, 2021 17:02 Forexlive Latest News Market News
In case you missed the happenings in the past week:
He goes on to say that they have reined in the “meaningless” volatility in the lira and that they are taking action to prevent lira volatility. I’m sure that has been the case throughout the year so what makes this time different is beyond me. USD/TRY is back up above 13.00 on the day and looking to push higher again as market players are unconvinced by Erdogan’s latest ploy.
EUR/GBP drops to the lowest level since February 2020, around 0.8370-65 area
193060 December 31, 2021 16:56 FXStreet Market News
- EUR/GBP prolonged its bearish trend witnessed over the past four weeks or so.
- Easing Omicron fears turned out to be a key factor that underpinned the sterling.
The EUR/GBP cross edged lower through the early European session and dropped to the lowest level since February 2020, around the 0.8370-65 region in the last hour.
Following an early uptick to the 0.8400 neighbourhood, the EUR/GBP cross met with a fresh supply on Friday and prolonged its recent bearish trend witnessed over the past four weeks or so. The British pound has been outperforming against its European counterpart amid easing concerns about the potential economic fallout from the continuous surge in new COVID-19 cases.
In fact, Britain reported a record 189,213 new COVID-19 cases on Thursday amid an alarming spread of the Omicron variant. Investors, however, remain optimistic over signs the new strain might be less severe than the Delta variant and is unlikely to derail the economic recovery. Moreover, a UK study indicated that Omicron infections are less likely to lead to hospitalization.
This comes on the back of a surprise rate hike by the Bank of England on December 16, which turned out to be a key factor that continued underpinning the sterling. Conversely, the shared currency, so far, has struggled to gain any meaningful traction and remained at the mercy of the US dollar price dynamics. This was seen as another factor exerting pressure on the EUR/GBP cross.
With the latest leg down, the EUR/GBP cross has now dropped over 200 pips from the vicinity of the 0.8600 mark, or the monthly swing high, which coincided with a multi-month-old descending trend-line resistance. Given that technical indicators on the daily chart are still far from being in the oversold territory, the stage seems all set for a further near-term depreciating move.
Technical levels to watch
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Dollar smile to prevail in 1H 2022?
193059 December 31, 2021 16:49 Forexlive Latest News Market News
If we look at some of the key themes going into 2022, it’s tough to find one that might dent the dollar outlook in general.
The first on the list is major central banks tightening. And in that regard, the Fed is among the frontrunners and perhaps arguably going to be the most aggressive. Roughly three rate hikes are penciled in for next year and the first of which should come by June at least.
The Fed has moved quite quickly from “this is transitory” to “we need rate hikes asap” and that has gotten the market stirred up. The long-end of the yield curve is still not too worried but we’ll have to see how aggressive the Fed decides to go next year and where do they see the current cycle stopping.
If 2% is the upper limit, it will be tough to get yields excited in my view. But this may be an argument that will only take shape in the latter half of next year.
For the time being, it’s all about how much can the Fed stick to its word. And if all does go according to plan, the dollar should at least be able to stay resilient on the back of the Fed’s policy outlook.
The other key theme to note next year is China’s battle against the pandemic. If that leads to more supply bottlenecks, that will contribute further to the above argument. And if it leads to a pronounced global slowdown and we do see risk trades correct, that will also be a scenario where the dollar can shine i.e. flight to safety.
As such, one can argue that the dollar smile theory is one that should work in the currency’s favour in the early parts of next year. Or at least it should provide some material support for the dollar and keep it more resilient.
The big caveat is that if the Fed fails to stick to the script, which may be rather unlikely. It will depend on a myriad of factors, including China and the pandemic, but otherwise, the dollar should at least hold up.
As for which trades I would prefer in this instance? I would say EUR/USD, USD/CHF, and USD/JPY are ones that may be more straightforward. The case for the former two relies on policy divergence while the latter is mostly if Treasury yields also push higher on the back of a more robust inflation outlook.
And in the event of any risk rout, then it is best to lean on the dollar against the commodity currencies bloc.
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EUR/USD Forecast: Investors await technical breakout of well-defined levels
193057 December 31, 2021 16:05 FXStreet Market News
- EUR/USD has gone into a consolidation phase around 1.1300.
- ECB’s Knot sees possibility of bond-buying program ending earlier than planned.
- Investors are likely to remain on the sidelines while waiting for volumes to return to normal levels.
For the second straight day on Thursday, EUR/USD climbed above 1.1350 but failed to preserve its bullish momentum. The pair seems to have gone into a consolidation phase around 1.1300 on Friday and market participants will eye a breakout of well-defined technical levels when the market action normalizes after the New Year holiday.
On Thursday, European Central Bank Governing Council member Klaas Knot noted that the ECB could end its bond-buying program earlier than planned if inflation continues to surprise to the upside. Knot further argued that it was appropriate for the ECB to prepare for gradual monetary policy normalization. Although these remarks helped the shared currency find some demand, the dollar’s resilience limited EUR/USD’s upside.
With the benchmark 10-year US Treasury bond yield holding above the key 1.5% mark heading into the new year, the US Dollar Index, which tracks the greenback’s performance against a basket of six major currencies, is staying afloat above 96.00.
US bond markets will close early in observance of the New Year’s Eve and the market action is expected to remain subdued in the remainder of the day.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the four-hour chart has retreated to 50, confirming the view that buyers show no interest in the common currency following the rejection at 1.1360. On the upside, 1.1340 (static level) aligns as interim resistance ahead of 1.1360 (static level, post-ECB high) and 1.1400 (psychological level).
The 100-period and the 200-period SMAs on the same chart seem to have formed a strong support area at 1.1290/1.1300. In case a four-hour candle closes below that level, additional losses toward 1.1270 (static level) could be witnessed.
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USD/CHF clings to modest recovery gains near daily high, just below mid-0.9100s
193056 December 31, 2021 16:05 FXStreet Market News
- USD/CHF gained traction on Friday and reversed the overnight losses back closer to the monthly low.
- The underlying bullish tone weighed on the safe-haven CHF and extended some support to the major.
- A modest USD strength remains supportive, though any meaningful recovery move still seems elusive.
The USD/CHF pair traded with a positive bias through the early European session and was last seen hovering near the daily top, just below mid-0.9100s.
A combination of factors assisted the USD/CHF pair to attract some buying near the 0.9130 area on Friday and rebound from the vicinity of the monthly low touched earlier this week. The underlying bullish tone in the financial markets weighed on the safe-haven Swiss franc. This, along with a modest US dollar strength provided a modest lift to the USD/CHF pair.
Investors remain optimistic over signs that the Omicron variant might be less severe than feared and is unlikely to derail the economic recovery. This, to a larger extent, helped offset worries about the continuous surge in new COVID-19 cases and continued boosting investors’ sentiment. This was evident from the recent runup in the global equity markets.
On the other hand, the USD edged higher for the second successive day and was supported by Thursday’s upbeat US macro data. In fact, the US Initial Weekly Jobless Claims fell to the lowest level since 1969 in the week ended December 24. Separately, the Chicago PMI beat expectations and rose to 63.1 for the current month from 61.8 in November.
It, however, remains to be seen if the USD/CHF pair is able to capitalize on the recovery amid absent relevant fundamental catalyst and thin end-of-year trading volumes. From a technical perspective, the overnight sharp intraday fall of around 50 pips validated the recent break below the 200-day SMA and supports prospects for a further depreciating move.
Hence, any subsequent recovery move might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly. The USD/CHF pair seems vulnerable to prolong its recent sharp decline from the 0.9375 region, or a multi-month high touched in November and slide further towards challenging the 0.91000 round-figure mark.
Technical levels to watch
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Decentraland starts bull rally ahead of New Year’s eve celebration at Times Square
193055 December 31, 2021 15:33 FXStreet Market News
NZD/USD consolidates in a range, holds comfortably above 0.6800 amid thin trading volumes
193054 December 31, 2021 15:09 FXStreet Market News
- Easing Omicron fears continued lending some support to the perceived riskier kiwi.
- A modest USD strength held back bulls from placing fresh bets and capped NZD/USD.
The NZD/USD pair lacked any firm directional bias on Friday and remained confined in a range, around the 0.6825-30 region through the early European session.
A combination of diverging forces failed to provide any meaningful impetus to the NZD/USD pair and led to subdued/range-bound price action on the last trading day of the year. The underlying bullish sentiment in the financial markets continued acting as a tailwind for the perceived riskier kiwi. That said, a modest US dollar strength acted as a headwind and kept a lid on any meaningful gains.
The global risk sentiment remained well supported by the latest optimism over signs that the Omicron variant might be less severe than feared and is unlikely to derail the economic recovery. This, to a larger extent, helped offset concerns about the continuous surge in new COVID-19 cases and boosted investors’ sentiment, which was evident from the recent runup in the global equity markets.
Meanwhile, the greenback gained some traction for the second successive day and was underpinned by Thursday’s upbeat US macro data. In fact, the US Initial Jobless Claims fell more than anticipated, to 198k in the week ended December 24 – marking the lowest level since 1969. Separately, the Chicago PMI also surpassed expectations and rose to 63.1 for the current month from 61.8 in November.
This, in turn, held back traders from placing aggressive bullish bets around the NZD/USD pair and capped the upside. The mixed fundamental backdrop warrants some caution before positioning for the near-term direction amid absent relevant market-moving economic data and thin trading volumes on New Year’s Eve.
Technical levels to watch
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Forex Today: Major pairs stuck in tight ranges on last day of 2021
193053 December 31, 2021 15:09 FXStreet Market News
Here is what you need to know on Friday, December 31:
Following Thursday’s choppy market action, major pairs stay quiet as we head into 2022. There won’t be any macroeconomic data releases on New Year’s Eve but US stock markets will be open. The US bond markets will close early.
Earlier in the day, the data from China showed that the business activity in the private sector expanded at a modest pace in December. The NBS Manufacturing PMI inched higher to 50.3 from 50.1 in November and the Non-Manufacturing PMI rose to 52.7 from 52.3.
The S&P 500 and the Dow Jones Industrial Average both registered small losses on Thursday and US stocks futures are down between 0.15% and 0.12% in the early European session on Friday. The 10-year US Treasury bond yield is holding above 1.5% following Thursday’s steep correction.
The number of confirmed coronavirus cases continues to rise at an unprecedented pace but the hospitalization rate remains relatively low, easing concerns over the potential negative impact on global economic activity.
EUR/USD gained traction in the early American session on Thursday but lost its momentum after rising above 1.1350 and closed in the negative territory. The pair is moving sideways slightly above 1.1300.
GBP/USD touched its highest level since late November at 1.3522 on Thursday and seems to have gone into a consolidation phase around 1.3500 on Friday.
USD/JPY lost its bullish momentum amid retreating US Treasury bond yield and trades in a tight range near 115.00 on Friday.
Gold registered strong daily gains after reclaiming $1,800 and looks to end the year on a firm footing. As of writing, XAU/USD was up modestly on the day at $1,818.
Bitcoin is moving up and down in a narrow range after dropping below $50,000 earlier in the week. Ethereum extends its sideways grind near $3,700 but it’s losing 8% on a weekly basis.
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Turkey Trade Balance: -5.4B (November) vs previous -1.44B
193052 December 31, 2021 15:05 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
GBP/JPY Price Analysis: Stays firmer above 155.00 inside weekly ascending channel
193050 December 31, 2021 15:05 FXStreet Market News
- GBP/JPY rises for the third consecutive day, mildly bid near two-month top.
- Overbought RSI, Doji at multi-day high challenges further upside.
- 100/200 SMA confluence appears a tough nut to crack for bears.
GBP/JPY grinds higher inside a bullish chart pattern during an inactive Asian session on Friday. That said, the cross-currency pair picks up bids to 155.45, up 0.08% intraday, by the press time.
Although a one-week-old ascending trend channel formation keeps GBP/JPY buyers hopeful, Thursday’s Doji candlestick near the highest level in two months joins overbought RSI conditions to challenge the pair’s further upside.
Even if the quote rises past the recently flashed multi-day top of 155.67 and rejects the bearish candlestick, the upper line of the stated channel near 155.85 will act as an extra filter to the north.
In a case where GBP/JPY remains firmer beyond 155.85, tops marked during May and November, around 156.10 and 156.25, will be in focus.
Alternatively, a downside break of the channel’s lower line, near 155.05, will need validation from the 155.00 threshold before directing the GBP/JPY bears towards a join of the 100 and 200 SMAs, near 152.00. During the fall, December 23 swing low near 153.00 may act as a buffer.
GBP/JPY: Four-hour chart
Trend: Pullback expected
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