Nick Batsford, CEO of Tip TV, was alongside Zak Mir, technical analyst for Zak’s Traders Café, and Mike Ingram, Strategist for BGC Partners, when he opened the Tip TV Finance Show to discuss the EUR/USD, negative interest rates, plus whether we will see a Santa rally, as well as brief looks at Gold, the FTSE 100 and the USD Index.
EUR/USD – Eyes trend line resistance after bullish break
Batsford highlighted FX Street, who noted that the pair witnesses a bullish break from a flag on the hourly chart and is now moving up in a rising trend channel. They continued that the target for the EUR/USD is the trend line resistance on the daily chart at 1.0990-1.10, meanwhile, a break below 1.0890 could be bearish for the pair.
Negative rates becoming the norm
Batsford commented on Elliott, who outlined that in a planned speech yesterday Bank of Canada governor Poloz said he now sees the effective lower boundary for their policy rate a minus 0.50%, that should the need arise for unconventional monetary policy they’ll be ready, and that the Canadian financial markets can function in a negative rate environment.
Will a Santa rally materialise?
Ingram questioned whether we will see a Santa rally, as we approach the last two weeks before Christmas, and he expressed how we have not begun the rally yet. Mir added that with mining stocks the way they are, a rally on the FTSE 100 will only reach 6450.
Gold and the USD Index
In terms of Gold, Batsford believed that it is headed for a test of support at $1000/oz after breaching $1100. A weaker USD would increase support for gold, but there is no sign of it yet, he urged.
He continued to the USD Index where Batsford noted that a weaker dollar would boost US exports and accelerate domestic growth. He concluded a breach of support at 98 would indicate a test of primary support at 93.
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