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December 07, 2017
The usual analysis of the beginning of the month starts with the main exchange rates in a very interesting month for many reasons.
The seasonal situation, the liquidity (which comes to be lower during the Christmas period and at the end of the year)) and the appointment with central banks. As seen last week, the mid-month meetings of the Fed and the Bce (on December 13th and 14th) could make the difference in the balance of EurUsd. Obviously also the geopolitical tensions with North Korea could weigh on the market that always looks with a mixture of diffidence and euphoria to the extraordinary performances of the Bitcoin crypto currency.
Let's go now into details for the main exchange rates.
Two weeks ago, EurUsd surpassed the right shoulder of the head and shoulder figure that has been formalized by the market since August. That resistance of 1.1880 was exceeded for a couple of days with an excursion above 1.19 before bending again under the previous resistance. Was it a false signal? We do not exclude it also because the same trap, not for bulls but for bears, started at the end of October when EurUsd dropped below the neckline of 1.1680 for some sessions.
Therefore, the formulation of directional ideas in the trading range scenario is not possible at the moment. For what concern us, the target of 1.14 is still open within the next three months, a technical threshold where we also could find the 38.2% of retracement of the whole rise started in January 2017.
There has been an evolution during the last few weeks in the background of the Pound. The Bank of England has raised interest rates and the British government seems to have surrendered to the idea of paying an account between 40 and 60 billion euros to the European Union as a compensation for the Brexit. The removal of these uncertainty elements (mostly the second one) has helped the Pound to go from 0.90 to 0.875 versus the Euro.
Few doubts about the fact that 0.8750 is the technical watershed. The fall down to this level should generate an increase in long positions in the Pound with the direction to be drawn towards the support zone of 0.83.
UsdJpy feels the previous resistance dictated by the bearish trend line and is now rebounding trying to come back into the bearish channel. We will soon get to know if this reaction will allow the Dollar to restart its upward trend but it is not excluded that this movement already represents the initial part of wave 5 which could bring the exchange rate back to the top of 118.70 reached in December 2016. Vice versa, the return below 110.85 would fuel a downward trend towards 107 at the end of 2017 and in the first few months of 2018.
A delicate moment for AudUsd as the supports of area 0.75 are under pressure. The divergence that has been created in recent times compared to commodities is increasingly evident and this leaves us perplexed about who, between commodities and Aussie, is not telling the truth. The exchange rate since the beginning of September has only fallen downward and now it is undermining the trend line that drives the rise since January 2016. A downward breakthrough could represent a negative event not only for the Aussie (that would fall down to 0.72) but also for commodities.
February 03, 2019
The GBPUSD pair has seen a strong rise in 2019 so far. The technical picture on the daily chart even suggests that there's more upside ahead.
May 15, 2018
This month is once again particularly eventful for the emerging world.
May 04, 2018
The dollar is the protagonist again thanks to the combined effect of 10-year US yields at 3% and a less aggressive ECB pressing on the need to normalize the monetary policy in Europe.
April 22, 2018
Bitcoin has been in a falling trend since the start of the year, but the cryptocurrency is currently attempting to break above resistance.
April 19, 2018
The month of April is proving to be full of events for emerging currencies which have suffered from the intensification of trading tensions between United States and China concerning duties, but also from the renewed political tensions between United States and Russia over the Syrian issue.
April 05, 2018
After the month of March we are now entering the month of April, in which the seasonality produces its effects.
March 22, 2018
The emerging currency market is waiting for the evident rise in rates in the United States from the Federal Reserve.
March 08, 2018
A more “hawkins” Powell than expected gave a nice boost to the US dollar with the 2-year interest rates back to 2.25%.
February 21, 2018
February has been quite a volatile month so far for the emerging currencies market together with some interesting strengthening stories (South African Rand) and others not so much (see Brazilian Real and Russian Ruble).
February 08, 2018
The month of February started with a weak Dollar against all the major world currencies, a situation that, in a slightly disordered way, Draghi first and then Trump tried to contain with the usual declaration of the need for a strong Dollar.
January 24, 2018
The month of January was quiet with some currencies that emerged against the US dollar.
December 21, 2017
December has not been volatile so far on emerging currencies as in other years when movements on exotic currencies tended to be more important.
November 24, 2017
The month of November is proving to be very tormented for emerging currencies, but there is much more than this.
November 07, 2017
November started with a somewhat anonymous Federal Reserve meeting that still does not dismantle the market expectations of a new rate hike in sight for the latest 2017 meeting in December.
October 25, 2017
A negative September for emerging currencies that lost 3% against the Dollar from the peak of the ninth month of the year.
October 13, 2017
In the month of October a lot of attention will be focused on Europe for political reasons as well as for economic reasons.
September 27, 2017
In September, the two major banks in the world have shown how the normalization of the monetary policy will continue, but at the same time will be accompanied by a long period of low rates.
September 24, 2017
When Charles Dow invented swing trading in the late 1908, he could not imagine such a great diffusion of this simple global yet very effective technique.
September 13, 2017
The ECB meeting of last Thursday officially reopened the final part of 2017 for financial markets.
September 07, 2017
September is usually a particularly interesting month for every financial market because it follows August miserable macroeconomic data and appointments with major central banks.
August 18, 2017
August is usually a volatile month for emerging currencies but it is also useful in estimating possible entry points for any tactical trade in the last part of the year.
August 03, 2017
In the month of July the Dollar has been the negative protagonist and the Euro the positive one, with other currencies more commodity-oriented and capable of earning different positions.
July 31, 2017
August is traditionally a volatile month for the currency and financial world in general and therefore the economic data that could represent a market mover must be kept under close observation.
July 05, 2017
The emerging world starts the month of July under unfavourable conditions. June has been a difficult month for some currencies, first of all the Russian Ruble and then the Brazilian Real, due to rising rates in the US, but also to the continued deterioration in oil prices.