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Contents
- Currency Pair Performance
- 10 Big Stories Last Week
- Chart of the Week
- Economic Calendar Highlights
- 5 Things to Watch this Week
- Technical Analysis: EUR/USD | GBP/USD | USD/JPY | AUD/USD | Gold | Oil | S&P 500
Currency Pair Performance
5-day performance as of November 18, 2021. 21:00 GMT
Source: finviz.comÂ
10 Big Stories Last Week
In case you missed it….
Euro oops – EUR/USD dropped to a 16-month low, while EUR/JPY is down 450 pips in a month and EUR/GBP is at pre-pandemic lows.
Pound rebound – Sterling bounced off its lows on renewed hopes for a Bank of England rate hike this year following higher than expected UK inflation data.
Don’t even TRY – The lira fell to a record low near 11 to the US dollar following the decisions to lower Turkish interest rates by 100 basis points.
British inflation – UK CPI rose 4.2% y/y in October, the fastest pace since 2011
Strategic Reserves – The price of oil sunk to a 6-week low on the possibility of a coordinated release of strategic petroleum reserves (SPRs) among large countries.
Xi-Biden summit – Chinese Leader Xi Xingpeng referred to US President Joe Biden as ‘old friend’ in their virtual meeting that yielded no clear result on tariffs.
Tech records – The two largest companies by market cap, Apple and Microsoft hit record highs this week.
Shell shocked – Oil giant Royal Dutch Shell will exit the Netherlands to become a UK-only company and drop ‘Royal Dutch’ from its name.
Retail earnings – Top US retailers including Walmart, Macy’s and Kohl’s topped Q3 earnings expectations
2022 forecasts – Goldman Sachs has just announced its 2022 forecast for the S&P 500 to reach 5,100.
Chart of the Week
Source: Bank of America / The Daily Shot
What, if anything, can derail the bullish sentiment that has catapulted US and European stock indices to record highs? Respondents to the BofA Global Fund Manager Survey list inflation as the biggest tail risk with central bank rate hikes / tapering and China coming in at second and third respectively. Notably inflation fears have dipped and central bank fears have picked up from October through to November.
Economic Calendar Highlights
Source: FX Street
5 Things to Watch This Week
1)Â Â Â Â Fed minutes
The Federal Reserve took its latest monetary policy decisions without the knowledge of booming US consumer price inflation in October. That makes them a bit stale but the discussion about how the decision was reached to begin tapering is note-worthy – especially as relates to what it means for the timing of future rate hikes.
2)Â Â Â Â Â PMIs
Rising inflation and supply chain issues have gotten some economists rattled but purchasing managers have remained confident. Could that change when information on new orders comes through ahead of the holiday sales period?
3)Â Â Â Â RBNZ
New Zealand is expected to opt for higher interest rates this week – there’s even the off chance of a 50 basis point move to show the RBNZ’s inflation-fighting credentials. Rumours of a larger hike came in after a widely watched survey showed NZ inflation expectations at the highest in 10 years (nealy 3% in 2 years)
4)Â Â Â Â PBOC
The meeting between the Chinese and US leaders this week caused little interest for markets to react to and the same will likely be said for the decision on Chinese benchmark interest rates. Still, given the fractious situation around Evergrande, a move from the PBOC is possible.
5)Â Â Â Â SPR release
Oil traders are taking seriously the possibility of a Biden administration- coordinated release of strategic oil reserves (SDRs) among major nations. The intent would be to bring the price of oil lower by increasing supply.
Technical Analysis
Here you can find analysis of the major asset classes including the major forex pairs, gold, oil, and the S&P 500.
EUR/USD (H4 Candlestick Chart)
EUR/USD continued its downtrend, falling below 1.13 before snapping higher to a supply-zone near 1.137. A bigger rebound looks overdue.
GBP/USD (H4 Candlestick Chart)
GBP/USD broke above a downtrend line and rose back over 1.35 in a sign the bearish trend is losing momentum.
USD/JPY (H4 Candlestick Chart)
USD/JPY has broken and re-tested the broken channel but the heavy sell-off from 115 was a false breakout and sign of a posible top.
AUD/USD (H4 Candlestick Chart)
AUD/USD made a lower low this week but downwards momentum is slowing before major support near 0.72
USD/CAD (H4 Candlestick Chart)
USD/CAD dropped back to 1.25 where it found support and is now challenging 1.26 as well as resistance from the October 5 peak.
Gold (H4 Candlestick Chart)
XAU/USD has stalled above 1850 into a small rising channel. 1830 is major support to the uptrend.
Brent Oil (H4 Candlestick Chart)
BRENT dropped under the 80 level in a further sign of weakness as the remains sideways with a downwards bias.
US 500 (D1 Candlestick Chart)
US500 is steady under record highs around 4700, supported by a rising trendline.
Thank you very much for reading – and have a great week trading!
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