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Brexit (ICYMI) – EU and UK negotiators will meet in London this weekend … but there’s a but

November 27, 2020 07:40   Forexlive Latest News   Market News  

In-person EU/UK talks were suspended when the EU’s chief negotiator Michel Barnier had to self isolate after a colleague tested positive for Covid last week.

The BBC report that unnamed EU sources have told the BBC face-to-face Brexit trade talks are to resume in London this weekend. And, further:

  • There had been reports that Mr Barnier would not travel to London unless the UK changed its negotiating stance.
  • One senior EU figure suggested the talks could be brief.

I posted yesterday on the three key sticking points. 

Adam posted this Thursday:

Stay tuned for plenty of Brexit headline ping pong.

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USD/TRY Price Analysis: Short-term falling channel keeps sellers hopeful

November 27, 2020 07:40   FXStreet   Market News  

  • USD/TRY seesaws in a choppy range below 100-HMA.
  • MACD teases recovery moves inside a bearish chart pattern.
  • One-week-old horizontal support pops-up on the bears’ radar.

USD/TRY recently eased from the intraday high of 7.886 to 7.8750 amid early Friday’s Asian session. Even so, the quote keeps the previous day’s bounce off 7.8517 to regain the 100-HMA.

Even if the pair manages to cross 100-HMA immediate resistance, at 7.8930 now, based on the MACD signals, a two-day-long descending channel formation keeps the USD/TRY buyers away until witnessing a break of 7.9245/50.

Also likely to challenge the upside momentum is the weekly high near 8.0510 and November 11 top close to 8.2000.

During the USD/TRY downside, the stated channel’s support near 7.8220 and a horizontal line including November 19 high and November 23 low, around 7.7360, will be the key to watch.

If at all the USD/TRY sellers manage to keep the reins past-7.7360, the monthly low of 7.5059 will be on their radars.

USD/TRY hourly chart

Trend: Further weakness expected

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Japan Tokyo CPI ex Fresh Food (YoY) meets expectations (-0.7%) in November

November 27, 2020 07:40   FXStreet   Market News  

AUD/USD eases after refreshing the three-month top the previous day, downside have recently been confined though. Chatters surrounding US-China relations, virus woes probe risk-on but absence of the US traders, light calendar elsewhere, limits the moves.

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Japan Tokyo CPI ex Food, Energy (YoY) came in at -0.2%, below expectations (-0.1%) in November

November 27, 2020 07:40   FXStreet   Market News  

AUD/USD eases after refreshing the three-month top the previous day, downside have recently been confined though. Chatters surrounding US-China relations, virus woes probe risk-on but absence of the US traders, light calendar elsewhere, limits the moves.

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Japan Tokyo Consumer Price Index (YoY) came in at -0.7%, below expectations (-0.6%) in November

November 27, 2020 07:40   FXStreet   Market News  

AUD/USD eases after refreshing the three-month top the previous day, downside have recently been confined though. Chatters surrounding US-China relations, virus woes probe risk-on but absence of the US traders, light calendar elsewhere, limits the moves.

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Tokyo inflation data for November – Headline CPI -0.7% y/y (expected -0.5%)

November 27, 2020 07:33   Forexlive Latest News   Market News  

This is the Tokyo area CPI. National level CPI for the month follows in three weeks.

Tokyo CPI -0.7% y/y
Tokyo CPI excluding Fresh Food -0.7% y/y
Tokyo CPI excluding Food, Energy -0.2% y/y

The Bank of Japan target for inflation is 2%, and they have missed that for many, many years. A little later after this data, we’ll be getting Japanese authorities, often the economy or finance minister, trying to apply lipstick to this CPI release pig. 

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WTI regains $45.00 even as choppy session limits the moves

November 27, 2020 07:26   FXStreet   Market News  

  • WTI fades pullback moves from the highest in nine months.
  • Trump announces vaccine delivery to take place next week, US-China, Washington Tehran tensions escalate.
  • US holidays restricts the market activity, a light calendar ahead may extend the lack of momentum.

WTI awaits clear signals to extend the latest pullback from $44.79, currently around $45.00, during Friday’s Asian session. The energy benchmark eased from the multi-day high the previous day as global optimism, mainly fuelled through the coronavirus (COVID-19) vaccine hopes, fizzled. Also challenging the oil bulls was the US holiday due to Thanksgiving Day.

Recently, US President Donald Trump mentioned that the covid vaccine delivery will begin the next week, which in turn defied the earlier market pessimism triggered thought AstraZeneca’s announcement of additional trials.

Also on the positive side could be the latest US-Iran tussle, over Tehran’s missile program, which also takes clues from the tussle between Saudi Arabia and Houthis.

Meanwhile, disagreements between the world’s top two economies, namely the US and China, also grew after Beijing warned US President-elect Joe Biden over comments for Taiwan. The news citing only half of the Sino-American trades promised in the deal despite passing 10 months of agreement join the chatters over Hong Kong to cite the tension among the key oil users.

Against this backdrop, expectations that the OPEC+ group may inch towards the further extension of the production cut agreement joins the latest covid vaccine hopes to keep the energy buyers hopeful. Though, a lack of major data/events restricts the uptrend off-late.

Technical analysis

Unless declining back below the August month’s high of $43.86, WTI buyers are less likely to relinquish the controls.

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80 ships and counting – Australian coal ships refused entry to China ports

November 27, 2020 07:02   Forexlive Latest News   Market News  

This has been simmering away for more than a month: 

The local press here in Australia now report the number of ships loaded with Australian coal sitting off ports in China is 80 or more.

Prime Minister Scott Morrison spoke yesterday on relations with China:

  • “We just work the process through with the Chinese government to get the best possible outcome that we can” 
  • “These are not easy issues … it’s incredibly complicated what we’re dealing with here.” 

 Morrison and his lump of coal in parliament.

This has been simmering away for more than a month: 

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EURUSD stabilises above 1.1900 awaiting further drivers

November 27, 2020 07:02   FXStreet   Market News  

  • EUR/USD was at the whim of US dollar flows on Thursday, but ultimately ended the day flat at just above 1.1800.
  • ECB rhetoric, as well as the minutes of the November meeting, serve as a reminder of the stimulus dilemma faced by the ECB in December.

EUR/USD was at the whim of US dollar flows on Thursday, undulating between fresh three-month highs at 1.1941 and lows of 1.1885, before settling around the midpoint of the day’s price action just above 1.1910 in recent trade.

The ECB’s dilemma…

ECB commentary in the form of rhetoric from Chief Economist Philip Lane and Governing Council Members Robert Holzmann and Gabriel Makhlouf, as well as the release of the minutes of the most recent ECB policy meeting, did have much of a lasting impact on the euro on Thursday.

Lane reiterated his support for the bank’s PEPP and TLTRO programmes, calling them the cornerstones of the EBC’s monetary response to the pandemic. Holzmann noted indications that there should be a more stable recovery from mid-2021 (seemingly a nod to growing expectations for mass vaccination programmes to have taken place by then) and pushed back against the notion of another rate cut, saying it “wouldn’t have an effect”. However, he did say that he cannot rule out the ECB implementing news monetary policy tools. Meanwhile, Macklouf noted that there may be factors pulling in “slightly different directions”.

In sum, though comments made by ECB members on Thursday did not reveal anything new, they do demonstrate the dilemma being faced by the bank ahead of its December monetary policy decision;

The ECB’s November monetary policy meeting statement and the comments made by ECB President Christine Lagarde in the post-meeting press conference clearly showed an ECB in favour of a significant expansion of stimulus measures in December. Back at the time of the November meeting, European nations were heading back into lockdown 2.0 to tackle a second Covid-19 wave and financial markets were feeling the strain. The minutes from this meeting were released on Thursday and served as a reminder of the pessimism being felt at the time.

Fast forward four weeks and while the immediate Covid-19 situation in Europe has not improved that much (most of Europe is still under some form of lockdown restriction and new infections are still at elevated levels), financial markets have been buoyed by 1) the prospect of the faster than expected development of more effective than expected Covid-19 vaccines and 2) Joe Biden’s US Presidential election victory over US President Donald Trump. These combined factors materially improve the global (and Eurozone) economic outlook for 2021 and beyond. Vaccine optimism in particular seems to already have given business a boost given the immediate reduction in long-term pandemic-related uncertainty.

Recent optimism clearly undermines the case for drastic stimulus measures in December. A deposit rate cut to -0.6%, already seen as unlikely back in November, is now almost certainly off the table. But markets still expect big things from the ECB regarding an expansion of the PEPP and TLTROs.

Does an ECB trying to balance a bleak near-term economic outlook with a more promising long-term outlook want to risk under-delivering on market expectations and risk sending EUR/USD even higher than it already is? The bank has already noted that a higher EUR/USD negatively impacts inflation in the Eurozone and the bloc has already been in deflation for the last few months.

On the topic of inflation in the Eurozone; French preliminary November inflation numbers are released on Friday morning at 07:45GMT and will, as ever, make for interesting reading. Elsewhere, there is also the ECB’s very own business and consumer sentiment survey for November, set to be released at 10:00GMT.

Friday also sees more ECB speak with governing council members Panetta, Weidmann and Visco speaking at a payments conference at 09:30GMT. As with recent ECB speak, they are likely to try to strike a balance between pessimism over the short-term outlook with improvements in the longer-term outlook.

EUR/USD carving out new range above last week’s range

EUR/USD appears to be carving out a new intra-day range, within which it is likely to continue to trade over the coming days, given the expected lack of volume with many US participants away on Friday and the coming Monday for a long Thanksgiving weekend.

The top of the range that was in play from the 16-24 November, that kept price action mostly confined between the 1.1800 and 1.1900 levels, seems to now be offering EUR/USD support. Buyers came in to buy the dip when EUR/USD dropped into the 1.1880s on Thursday, indicative that this area that had been acting as resistance has now turned to support. Going forward then, Thursday’s lows and the surrounding area are likely to continue to see buying interest.

To the upside, EUR/USD is now less constrained by resistance; Thursday’s highs (incidentally, the highest levels since early September) at 1.1941 will be the key level to watch to the upside. Beyond that, the 18 August high at 1.1961 is the next are to watch and above that the psychological 1.2000 mark and year-to-date high at 1.2010 just above it.

EUR/USD six-hour chart

eurusd

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Silver Price Analysis: Treads water inside immediate triangle above $23.00

November 27, 2020 07:02   FXStreet   Market News  

  • Silver lacks momentum despite trading on the back foot off-late.
  • Receding RSI conditions favor bears, bulls have multiple hurdles to tackle before entry.

Silver seesaws around $23.30 while keeping a two-day-old symmetrical triangle during Friday’s Asian session. The white metal has been depressed so far in the current week but the downside momentum lacks courage.

As a result, further selling awaits a clear break below the stated triangle’s support, at $23.23 now, which in turn will eye the monthly low near $22.90.

While the metal’s declines past-$22.90 will depend upon the RSI conditions at that time, lows marked in October and September, respectively around $22.60 and $21.65, can lure the silver bears afterward.

Alternatively, an upside clearance of the triangle’s resistance, near $23.46, needs to cross a horizontal line around $23.63 comprising November 19 low and November 23 high.

Also acting as an upside filter is a nine-day-old descending trend line that presently probes the silver bulls close to $24.05.

Silver hourly chart

Trend: Sideways

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AUD/NZD treading on thin ice as attentions turn to RBNZ

November 27, 2020 06:56   FXStreet   Market News  

  • AUD/NZD consolidates at a key support level as markets eye the RBNZ.
  • The divergence between the RBA and RBNZ should be supportive for the bird. 

AUD/NZD is in consolidation during the Thanksgiving celebrations in the US which have seen volumes in markets dwindle to practically non-existant in the forex space.

Overnight, the cross stuck to a 1.0521 and 1.0491 range. 

In early Asia on Friday, the cross is sitting at 1.0507 and its on thin ice, balancing the late November support.

”We think the NZD eventually softens against the AUD, but can’t see a near-term catalyst,” analysts at ANZ bank explained. 

There is little for the cross to go on at this juncture with the US elections out of the way and a vaccine on the horizon.

Risk sentiment has been favourable to both the Aussie and the kiwi but markets have taken a liking to the bird considering that divergence between the two nation’s central banks. 

RBA vs RBNZ

The Reserve Bank of Australia recently shifted its stance in a more dovish direction, cutting the key policy rates and significantly expanding its QE programme.

In contrast, analysts at Westpac argued that ”the Reserve Bank of New Zealand Monetary Policy Statement this week will need to acknowledge the economy (especially housing) has been stronger than forecast, and while it will announce a cheap bank funding scheme (FLP), we expect signalling about a negative OCR to either remain unchanged or be softened.”

”Yields spreads near term should thus favour the NZD over the AUD,” the analysts argued.

”Longer term, though, the opposite could be true, if the RBNZ cuts the OCR to -0.50% by August 2021 (our current forecast). That should push the cross to 1.10 by March 2021.”

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Yearn.Finance Price Prediction: YFI looks ready to regain lost ground, bulls target $25,000

November 27, 2020 06:49   FXStreet   Market News  

  • Technical indicators show that YFI’s price seems to be gearing for a rebound.
  • On-chain metrics give credence to the bullish narrative as the market appears to have found stable support.

Following a significant retracement that has sent the price of Yearn.Finance below $21,000, it would seem that it is on the cusp of an upward trend. After trading in treacherous zones for a while, technical indicators show that the digital asset might not remain there for long.

Yearn.Finance price poised to rebound

The TD Sequential indicator provided a buy signal on Yearn.Finance’s 6-hour chart. The bullish formation came as a red nine candlestick, indicating a potential upswing on the DeFI token’s sight.

Although YFI sits at $22,500 at the time of writing, a spike in buying pressure could see prices soar towards $25,000.

YFI/USD 6-Hour chart

YFI/USD 6-Hour chart

IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model adds credence to the bullish outlook. Based on this on-chain metric, the only significant resistance level ahead of Yearn.Finance sits at $25,000. Here, more than 250 addresses bought over 5,000 YFI. 

In/Out of the Money Around Price for YFI

In/Out of the Money Around Price for YFI

On the flip side, transaction history suggests that the $19,000 level plays a significant role in Yearn.Finance’s trend. The IOMAP cohorts show that this is the strongest support zone underneath this cryptocurrency because over 350 addresses had scooped up nearly 2,800 YFI tokens around this price.

It is very likely that this area would be strong enough to subdue some of the selling pressure and prevent a further decline. Failing to do so may open the pandora box since the IOMAP indicates that the next important support wall sits around $17,700 and $18,100.

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